Two senators: Raise Medicare age to 67

Two Senate rebels jumped into Congress' cut-the-deficit competition on Tuesday, proposing to raise the age of Medicare eligibility to 67 and increase monthly premiums for millions of current beneficiaries.

"We can't save Medicare as we know it," said Sen. Joseph Lieberman, I-Conn., who authored the plan with Republican Sen. Tom Coburn of Oklahoma. "We can only save Medicare if we change it," he added in an apparent jab at President Barack Obama and congressional Democrats.

Democrats reacted with criticism of the proposal, which Coburn said was designed to rescue the financially imperiled program and help the nation confront a "wall of debt." Republicans betrayed no sign of support either.

If nothing else, the response underscored the difficulty of legislative free-lancing at a time the Obama administration and congressional leaders are struggling to negotiate a compromise that cuts future deficits and clears the way for an increase in the nation's $14.3 trillion debt.

Without a debt limit increase by Aug. 2, Treasury Secretary Timothy Geithner has warned, the government could default, risking calamity for the U.S. economy and serious effects worldwide.

Republicans walked out of bipartisan talks last week but nevertheless said negotiations had been fruitful. In the days since, Obama has stepped up his personal involvement in the effort.

After meeting separately with the Senate's Republican and Democratic leaders on Monday, he invited the Democratic leadership to a White House meeting on Wednesday.

In the earlier talks, led by Vice President Joe Biden, key lawmakers had outlined a series of proposals to cut several hundred billion dollars over the next decade.

Other proposed cuts were on the table, including nearly $1 trillion from the assumed end of the wars in Iraq and Afghanistan. Officials familiar with the negotiations say Republicans are reluctant to count that money toward any agreement, saying they want more tangible cuts in domestic programs before agreeing to vote for an increased debt limit.

Also in the way of an agreement is a partisan dispute over taxes, which Republicans don't want raised, and Medicare benefits, which Democrats don't want cut.

Lieberman and Coburn were not nearly as reluctant, including both in their prescription for Medicare.

"Nobody's going to like this plan, we understand that," said Lieberman, who was the Democratic vice presidential candidate in 2000 but is now an independent who regularly picks spots to challenge his former party.

His statement that Medicare can't be saved in its current form seemed a direct rebuttal to Obama, who said earlier this year that a House Republican proposal would "end Medicare as we know it" — something he vowed would not happen while he was in the White House.

Coburn is a conservative Republican. But he challenged his party orthodoxy earlier this year when he said he was willing to include higher revenues as part of any deficit-reduction deal.

The plan the two men outlined includes a gradual increase over the next five years in the monthly premium that seniors pay for doctor and other non-hospital services. Aides said it would translate into a monthly increase of $15 to $20 initially.

The age of eligibility would rise gradually from 65 to 67.

For the first time, better-off seniors would be charged more money for Medicare Part A, which covers hospital care.

The same group already pays more for doctor visits as well as for prescription drug coverage and, under the plan, would face even higher monthly premiums.

A major source of savings would come from making sure seniors pay out of pocket for at least a portion of their care. To accomplish that, Lieberman and Coburn proposed barring insurance companies from selling Medigap policies that offer first-dollar coverage.

The plan by Lieberman and Coburn would preserve Medicare as a government program, unlike a House GOP proposal that would require millions of future beneficiaries to purchase coverage from private insurance companies.

Additionally, the plan includes a $7,500 limit on out-of-pocket costs for doctor or hospital coverage, a provision designed to protect seniors who face potentially catastrophic costs.

According to the most recent report by the Medicare trustees, the giant program's insurance fund is projected to run out of money in 2024, five years earlier than last year's estimate.