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Washington • He'll never turn Medicare into a voucher, but if you are lucky enough to be financially comfortable in retirement, odds are you'll pay higher premiums under President Barack Obama's plan. It's not just the 1 percent who'll feel the pinch.
And take note, baby boomers: The Medicare you get won't be quite as generous as what your parents' generation enjoys. A higher deductible here, a new co-payment there, and the tweaks add up.
With the future of Medicare on the line in the presidential election, The Associated Press asked the Obama campaign five questions about how his plans for seniors' health care would affect critical issues of costs and benefits. (The AP also sent Republican Mitt Romney a set of questions, and the responses are the subject of a companion report.)
Unlike Romney, Obama is not calling for a major Medicare remake. Most of the president's cost-cutting ideas are incorporated in his health care law, and will phase in unless Romney wins and makes good on his pledge to repeal it. Other Obama proposals are drawn from government advisory groups or bipartisan commissions seeking consensus on how to reduce deficits.
It doesn't mean they're pain-free. AARP gave a thumbs-down to this year's Obama budget, citing Medicare cost shifts.
If Obama is re-elected and plunges into deficit negotiations with congressional Republicans, he will be pushed for greater Medicare savings, by cutting payments to service providers or squeezing more from recipients.
"Neither one of (the candidates) is going to basically lay his cards on the table before the election," said former AARP CEO Bill Novelli, now at Georgetown University in Washington. "Obama is going to have to raise the price of benefits, whether by hundreds or thousands, I don't know. Where else is the money going to come from, besides printing it?"
Some Medicare questions for consumers to watch, along with answers from the Obama campaign and the views of several experts:
Q: What new costs can seniors expect under Obama's plan for Medicare?
A: You may need a CPA degree to understand the complicated details of changes proposed by the president.
Broadly speaking, Obama would raise monthly premiums for retirees making $85,000 or more ($170,000 for married couples). He also would hit newly joining baby boomers with a series of fees.
Currently only about 5 percent of beneficiaries pay higher, income-based monthly premiums for outpatient coverage under Medicare Part B and even fewer pay higher premiums for prescription drug coverage.
Under Obama's proposal, a growing share of seniors would pay the higher premiums over time. He'd also bump up the premiums paid by higher-income beneficiaries by 15 percent.
After about 20 years, the top 25 percent of Medicare recipients would be paying higher, income-based premiums.
An analysis by the nonpartisan Kaiser Family Foundation estimates that in 2017, a single retiree with income of $86,000 would pay $447 more in premiums for Medicare's outpatient and prescription drug coverage. A married couple with income of $175,000 would pay about $894 more in that year.
As for the fees on newly joining baby boomers, they'd face a $25 increase in their annual outpatient deductible (initially for a few years only), some limits on the use of 'Medigap' insurance to fill in gaps left by Medicare, and a new home health co-payment in certain cases.
Think of these proposals as the president's opening bid in budget talks.
Q: Hasn't Obama also hinted he might be willing to increase the eligibility age for Medicare?
A: In budget negotiations with Republicans last year, Obama indicated a willingness to consider gradually raising the eligibility age to 67, from 65 now. Romney supports the idea. But the president has since walked it back.
"President Obama has always been willing to make hard choices to confront big challenges, and sometimes that means listening to other ideas," said campaign spokesman Adam Fetcher. "But (Obama) believes we can strengthen the future of Medicare without raising the eligibility age."
Translation: The idea is not quite off the table, and Obama, if re-elected, will again face the choice in budget negotiations.
"I think it will continue to be analyzed," said Don Berwick, Obama's first Medicare chief. Berwick believes there is a downside to postponing Medicare eligibility, because a sizable number of future retirees would join the program in weaker health.
"As an administration official, I was not impressed that it would save money for the (Medicare) trust fund," said Berwick. "But I would say it will continue to be studied."
Q: Medicare's in-house economic analysts have warned that cuts in Obama's health care law could eventually drive some hospitals into the red. The health care industry is pushing for repeal of a Medicare cost-control board in the law, saying more cuts will reduce access for seniors. What will Obama do if seniors start having problems getting the care they need?
A: The administration says that's unlikely to happen. Cuts are being introduced gradually, and dozens of pilot programs are testing ways to provide better care for less money. Health care costs are in a lull, buying time to make changes. Studies indicate there is plenty of waste to be cut.
"The president will continue to make sure that seniors have access to the benefits they have earned," Fetcher.
But if Obama's advisers are wrong and the system starts to seize up, most experts believe Congress would intervene. "Congress is always going to step in if there is a real perception that quality and access for Medicare beneficiaries would suffer broadly," said Mark McClellan, who ran Medicare for President George W. Bush.
Q: Obama's health care law already increases the Medicare payroll tax for individuals making over $200,000. What's to rule out a broader tax increase?
A: McClellan says that's always a risk, particularly because Obama's health care law funnels the higher Medicare payroll tax into providing coverage for working-age uninsured people.
"Because those revenues are dedicated to the coverage expansion, everything else being equal, the government is going to need more revenue to cover the cost of the (Medicare) program," he said. "If that money had been used for deficit reduction, or to increase the life of the trust fund, the government would have more existing resources."
The White House says there are no plans to propose higher Medicare taxes.
Q: The administration pulled the plug on a new long-term care insurance program because of financing problems. How does Obama plan to address this unmet national need in his second term?
A: The campaign says Obama is willing to work with anyone who has good ideas about long-term care, and that Medicaid and Medicare will continue working to help seniors who want to stay in their own homes, instead of going into nursing facilities.
But Novelli said paying for long-term care remains a huge problem for middle-class elders and their families.
Obama "may have to punt, they may not want to go there," said Novelli. "But, yes, as a society we've got to go there."