When President Obama came to power, he carried with him the promise to extend health care coverage to all, regardless of a person’s income or medical history. He also promised to improve Medicare by cutting costs, increasing quality and stemming fraud and abuse.

The Patient Protection and Affordable Care Act (ACA), a controversial piece of health care reform legislation and the signature legislative victory of Obama’s first term, was his solution. It extended the solvency of the Medicare Hospital Insurance (Part A) trust fund from 2016 to 2024 and created new programs to test new payment and delivery models in an effort to improve care and lower costs.

Even with a major health care reform bill under his belt, Obama’s legacy on health care, and Medicare in particular, isn’t set. As his second term begins, he faces a combative Republican-controlled House calling for spending cuts. Obama said he is open to making “modest adjustments” to Medicare at a White House press conference on Jan. 14.

A week later, at his second inaugural address, he reiterated his belief that U.S. entitlement programs are fundamental to what the country stands for, saying “The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us. They do not make us a nation of takers; they free us to take risks that make this country great.”

Experts say the outcome of deficit reduction negotiations as they relate to health care, particularly Medicare and Medicaid, will, in part, shape his presidential legacy.

“The only real criticism that really stung in the 2012 election was the fact that spending had increased so much under his presidency,” said David B. Cohen, a professor of political science at The University of Akron’s Bliss Institute.

“The Obama campaign’s argument was, we came into a horrible economic situation, we needed the large stimulus bill to keep the economy going, and look, the economy is starting to improve,” he said. “If, after eight years, the budget deficit is still increasing and the national debt is still increasing at an alarming rate, that will definitely have a negative impact on his legacy.”

Cohen said Obama will have to take on entitlement reform during the 113th Congress, whether he likes it or not.

Obama said he is committed to cutting $4 trillion from the deficit over 10 years, which would keep the U.S. debt-to-Gross Domestic Product ratio below 75 percent for a decade or more. Of that amount, Congress has already enacted about $2.5 trillion in spending cuts and tax increases so far. Obama has said that he is willing to work with Speaker of the House John Boehner and House Republicans to draft another $1.5 trillion.

In an interview with ABC News’ Barbara Walters, Obama didn’t rule out increasing the Medicare eligibility age, and in July 2011, during the fight to raise the debt ceiling, he clearly supported charging higher-income beneficiaries more for their benefits. And his fiscal year 2013 budget, which was never voted on, included nearly $500 billion in Medicare savings.

This would not be the first time Obama looked to alter Medicare in order to find savings. The ACA shaved $716 billion from Medicare, mostly from cutting payments to hospitals and Medicare Advantage Plan (Part C) subsidies.

 “The ACA is the most important cost-containment we have had in Medicare, arguably, since the early 1980s,” said Jonathan Oberlander, professor of social medicine at the University of North Carolina School of Medicine and author of “The Political Life of Medicare.”

Oberlander said the cuts in the ACA won’t make Medicare finances perfect, but it will put the program on sounder economic footing. He said he thinks it’s odd that we’ve forgotten we just adopted billions of dollars of projected savings in the ACA.

According to a Kaiser Family Foundation report, in 2012, Medicare spending accounted for 15 percent of the federal budget and about 21 percent of total national health care spending. The size of Medicare spending as part of the budget makes it a regular target for deficit hawks.

“There’s no question that when you look at projected future deficit, federal health spending is the largest variable responsible for that, so when policymakers look to strike a deal on the debt and the deficit they are going to look to get money out of the health care system and out of federal spending on health care,” Oberlander said.

“The upcoming debate over the debt limit and the deficit is going to involve Medicare and so a lot of his legacy on Medicare is not yet written,” he said.

The major challenge facing Obama that his predecessors didn’t face is a federal government that is more divided along political lines than any other in modern times.

Cohen said a big question is whether the Speaker Boehner will be able to get his caucus in line to strike a deal.

 “Reagan achieved many successes, Clinton achieved many successes, even with a divided government, but I think politics is nastier now in the 21st century, and I think the president faces a much more difficult task in getting—not his own party—but the Republican Party to actually come to the table and to negotiate a compromise that is really in the middle of the political spectrum,” Cohen said.

Oberlander agreed, “The way political scientists measure it, the two parties are more polarized in Congress right now that at any point since the 1870s…and we had just fought a civil war.”

“A lot of the Medicare reform in the (19)80s was bipartisan and it’s just so much harder to do that now. Not impossible but harder,” he said.

Obama the Centrist

To draft the ACA, the Obama administration and other policymakers managed to bring the health care lobby into the fold. The American Medical Association, which for much of the 20th century opposed government involvement in health insurance, supported a majority of the law. Insurers and hospitals were also coaxed to the table with the promise that if they accept Medicare reimbursement cuts, they would see an influx of newly insured consumers. 

Also, considering the Medicare cuts in the ACA and his suggestion that he is willing to look at additional changes to Medicare, Obama has shown a willingness to work with Republicans to reduce the deficit.

Oberlander said the fact that Obama has reportedly considered raising the Medicare eligibility age “says less about his Medicare philosophy and more about his pragmatism and willingness to compromise in the name of deficit reduction, and whether you think that is a good thing or bad thing depends on your views, not just on Medicare, also on getting a deal to reduce the deficit.”

Some critics see his pragmatism as a flaw.

Joseph White, professor of public policy at Case Western Reserve University, said, “He’s very much within the establishment beltway conversation and he is temperamentally a moderate, meaning he always feels there is a middle way.”

“There is no such thing as a middle-way cut to Medicare,” he continued. “Medicare is an inadequate program that requires supplemental insurance already.”

White suspects that Obama’s temperamentally moderate nature will lead to more significant cuts to Medicare in his second term.

Colin Gordon, author of “Dead on Arrival: The Politics of Health in Twentieth Century America,” said that Obama’s position on health care reform doesn’t represent a distinct philosophy.

“I think the Affordable Care Act reflects a fairly broad consensus among what I would characterize as middle-of-the-road reformers as to what is possible,” he said. “It’s a range of things that people have been talking about for a number of years, bundled together in a large, unwieldy piece of legislation.”

Great Unknowns

The outcome of the deficit reduction discussion is one unknown. There are many others.

The Supreme Court decision on the ACA, for example, allowed states to opt out of the Medicaid expansion, which will lead to fewer insured Americans and, therefore, less business for hospitals and other providers who were anticipating a great influx of paid patients. This possible decrease in Medicaid beneficiaries clearly offsets the possible increase in Medicare patients.

The expansion would have forced states to offer Medicaid to Americans living at up to 138 percent of the federal poverty line. The Congressional Budget Office has estimated that the Supreme Court decision will lead to six million fewer people having Medicaid coverage, and of those the poorest three million will remain uninsured.  (The other three million will be enrolled in state exchanges.)

So far, according to a study by the Harvard School of Public Health, fewer than half of the states have signed up for the expansion.

Another mystery is the outcome of the payment and delivery experiments and programs, such as Accountable Care Organizations (ACOs), the Patient-Centered Outcomes Research Institute and the Center for Medicare and Medicaid Innovation. These were ushered in by the ACA and will be implemented by the Department of Health and Human Services and the Centers for Medicare & Medicaid Services. What remains to be seen is, will these programs save money in the long-run, and at the same time, deliver high-quality health care?

The ACO Shared Savings Program, one of the most ambitious experiments, launched in April 2012 and has created 259 such organizations so far. But it’s unknown if this approach, which is aimed at making providers more accountable for the care they provide, will save money or be copied widely in the private insurance industry.

Oberlander characterized ACOs as “faith-based cost control” because he said there’s no evidence that these organizations will save money.

Still, he conceded that they could ultimately affect Obama’s legacy.

 “Now, if they turn out to be revolutionary and they really do all of the things advocates hope, then certainly his legacy in health care policy is going to look all that much more stellar and all that much more extraordinary,” he said.

Ultimately, Oberlander said, it’s hard to predict Obama’s legacy because so much of it is outside his control.

“There is so much that could happen in the next 20 years that could change what he did,” Oberlander said. “What if Marco Rubio is president in 2017 and goes in a completely different direction?”

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