06/28/2011 05:28 pm ET Updated Aug 28, 2011

Joe Lieberman, Tom Coburn Plan To Slash Medicare Gets Cold Reception

WASHINGTON -- A new plan unveiled by Sens. Joe Lieberman and Tom Coburn to slash costs in Medicare is getting a cold reception on Capitol Hill.

The new effort aimed at bridging the partisan divide over debt reduction aims to cut more than $640 billion from Medicare over the next 10 years, largely by raising deductibles and other costs for beneficiaries.

It would require wealthier Americans to pay the full cost of their Medicare premiums, raise the eligibility age to from 65 to 67, create a minimum out-of-pocket deductible of $550 and raise premiums, among other changes.

In return for paying more and giving up benefits, seniors would get a cap on out-of-pocket expenses at $7,500 to ensure bankruptcy was less of a threat.

Democrats dismissed the ideas out of hand.

"It is unfair to ask seniors to get less in benefits and wait longer to get onto Medicare -- all while Republicans back tax breaks for Big Oil and corporations that ship American jobs overseas," said House Minority Leader Nancy Pelosi (D-Calif.) "Just like the Republican plan to end Medicare, this proposal is unacceptable, especially for struggling middle-class Americans."

Republicans did not exactly flock to the idea either. Senate Minority Leader Mitch McConnell merely said the work by the Connecticut independent Lieberman and Oklahoma Republican Coburn underscores "the necessity of doing something serious about entitlement reform."

"We can put our heads in the sand and ignore that, and keep on kicking the can down the road, or we can come together as Sen. Coburn and Sen. Lieberman have with their particular proposal and try to do something about it," McConnell added.

Although the plan met such a chilly reception, reports out of the White House Tuesday suggested President Obama is hunting for a fresh option to trim Medicare costs -- a key part of the debt talks -- and thinking a lot larger than Democrats have been willing talk about so far.

If Republicans agree to revenue hikes President Obama wants, the Lieberman-Coburn plan could offer a bipartisan refuge.

But there are political realities that would make it a hard proposition for either side to embrace.

For one, Democrats likely would have to give up their relentless hammering of the Republican plans to cut Medicare -- which the Democrat-aligned Protect Your Care signled Tuesday it was not about to do.

"A plan that slashes Medicare for vulnerable seniors is a plan that slashes Medicare for vulnerable seniors no matter what co-sponsors you put on it," said Protect Your Care spokesman Eddie Vale. "This so called 'plan' is just as dangerous for seniors as the Republican budget that ends Medicare."

For Republicans, accepting the plan would also be difficult because a huge portion of the savings depend on maintaining the health reform law that they have vowed to repeal.

"It's miraculous in a way, because this legislation gets a Republican to embrace ACA [the Affordable Care Act]," one health care lobbyist told The Huffington Post.

If the heath reform were repealed, the Lieberman-Coburn measure requires keeping the eligibility age at 65 -- costing $124 billion.

The ideas are also not likely to go over well with older Americans, who would have to pay 35 percent of the cost of the premiums, instead of 25 percent. Plus, the plan aims to discourage people from going to doctors by raising deductibles.

While the plan would also raise money by making wealthier Americans pay 100 percent of their premium costs -- and by denying some payments to hospitals -- the vast majority of savings come from the pockets of beneficiaries.

The bill contains few of the popular cost-saving ideas that many advocates for reform have embraced, such as improving efficiency, allowing Medicare to negotiate drug prices and using generics.

AARP, the influential lobby for older Americans, estimated that 95 percent of the savings come from seniors. And while the group liked capping the maximum out-of-pocket expenses, and an effort to stabilize payments to doctors, they opposed it overall.

"We believe the right way to strengthen Medicare is to improve the quality and lower the cost of care throughout the health care system," said AARP's Nancy LeaMond. "Simply shifting the bill to seniors does nothing to improve health care quality or combat the real problem of rising costs."