By David Morgan
WASHINGTON (Reuters) - President Barack Obama could seek common ground with Republicans in the looming battle over Medicare spending by broadening the debate over entitlement reform to encompass the spiraling healthcare costs that confront a wide range of Americans.
In recent public remarks the president has identified the U.S. healthcare system's sky-high price tag - by far the highest in the world - as a driving force for Medicare reform.
The administration is expected to release a report on 2011 national healthcare expenditures on Monday that should further underline well-known trends. In 2010, health spending hovered at almost 18 percent of U.S. gross domestic product.
Healthcare experts, including former Obama advisers, say the White House appears to be considering ideas for Medicare, the popular health insurance program for the elderly and disabled, that could become models for the overall health landscape.
And in some good news for Obama, whose 2010 Affordable Care Act has been a lightning rod for Republican opposition, experts also see the political climate brightening for efforts to control the rise in healthcare costs generally.
"My expectation is that the president will offer a mix of ideas on the Medicare program that will not be about middle-income beneficiary cuts," said Neera Tanden, a former Obama healthcare adviser who heads the Center for American Progress, a think tank with strong Democratic Party ties.
"My hope is that he'll look at a variety of ideas to use this negotiation, just like we used (healthcare reform), to push forward on healthcare cost reductions," she said.
The White House declined to comment and it was not clear whether Obama plans to offer new initiatives or simply repackage existing proposals as broader cost-cutting initiatives.
Bold new steps geared to lessen the healthcare burden on all Americans could alter the tenor of the Medicare debate and help the president appeal for popular support in staving off Republican calls for deeper structural changes.
Obama's remarks have been vague so far. On December 31 he told reporters: "I'm willing to reduce our government's Medicare bills by finding new ways to reduce the cost of healthcare in this country. That's something that we all should agree on."
Analysts guess that Obama could press for more price competition among drug makers, insurers and healthcare providers within Medicare, or for an acceleration of measures adopted as part of the 2010 Act that aim to move the national care delivery system away from its current fee-for-service cost structure.
Experts also see a potential role for tax reform - specifically, a reduction of the longstanding exclusion that protects individual workers from having their employer-sponsored health coverage taxed as a benefit.
The $2.8 trillion U.S. healthcare system costs nearly $9,000 a year for every man, woman and child. Growth has long outpaced inflation by wide margins, and following the U.S. recession of 2008 and 2009 has contributed to tepid job creation, low wage expansion and a stubbornly high level of personal bankruptcies.
Medicare, long considered a program that U.S. politicians would touch at their peril, is acknowledged, along with the national Medicaid program for the poor, to be a major driver of the deficit. The aging population puts Medicare on a collision course with major financial difficulties; the so-called Medicare trust fund is on pace to run out of money in 2024.
Government forecasters say Medicare spending alone will top $1 trillion in 2021, against $590 billion today, while total U.S. healthcare spending will balloon to $4.8 trillion.
MEDICARE AS AN INCUBATOR FOR BROAD CHANGE Continued...