Obama attacks sequestration, Medicare payments in State of the Union address

White House will reach a decision on 2% cut to Medicare providers within 30 days

In a State of the Union address largely focused on jobs and the economy, President Obama challenged a divided Congress to avoid automatic funding cuts to Medicare and Medicaid, raise the minimum wage and relax immigration rules. 

The President said he is willing to trim Medicare outlays to align with those proposed by the bipartisan Simpson-Bowles fiscal commission in 2010. He said this could be accomplished by shifting provider reimbursement to a pay-for-performance model, reducing subsidies to pharmaceutical companies and raising fiscal obligations for the nation's wealthiest seniors.

"We'll bring down costs by changing the way our government pays for Medicare, because our medical bills …  should be based on the quality of care that our seniors receive," the president said.

American Health Care Association President and CEO Mark Parkinson said that while the speech did not offer specific answers to long-term care challenges, “We are ready with solutions whose first prescription is not further cuts, but rather structural changes that benefit both the taxpayer and our nation's frail elderly.” 

At times, Obama's frustration with a largely uncooperative Congress was apparent.  He ridiculed previous inaction, while urging lawmakers to do more in the year ahead. 

"The American people don't expect government to solve every problem. They don't expect those of us in this chamber to agree on every issue. But they do expect us to put the nation's interests before party," he said.

LeadingAge President and CEO Larry Minnix praised the president for taking a balanced approach to the deficit, and for targeting the minimum wage. “Support for lower-income workers reinforces the importance of direct care staff in our member organizations,” he said.

Afterward, several Republicans said the cajoling address amounted to little more than a stump speech.