By Ethan Rome – Executive Director, Health Care for America Now
When the Republicans release their budget next week, they’ll likely say they have a “new” Medicare proposal that will “save” Medicare instead of eliminate it. That’s not true. The Republicans still plan to end Medicare as we know it. But this time they’ll do so with the support of Democratic Senator Ron Wyden of Oregon.
Based on the draft proposal released in December by Wyden and House Republican Budget Chairman Paul Ryan, the GOP’s Medicare plan will give seniors a voucher to buy insurance coverage just like the last plan. From the start, the vouchers would be underfunded and won’t cover the costs of the insurance. Under the last proposal, seniors would pay $6,400 more on day one. Then the voucher would not keep up with rising costs of coverage. Based on the last plan, seniors would pay a staggering 68 percent of the cost of their medical care in 2030, compared to 25 percent if the law remains unchanged.
Here’s what the media say is going to be different in the new plan: Seniors could go into the private insurance market or use their voucher to purchase “traditional” Medicare. But providing vouchers instead of benefits isn’t Medicare as we have known it for 46 years. Medicare guarantees that beneficiaries get a specific set of benefits and services, and it pays doctors and hospitals when those services are provided. You get defined benefits that you can count on and your costs are predictable. This is what the Republicans want to get rid of.
The Republican plan — the brainchild of Wyden and Ryan — is the opposite. Your benefits are not guaranteed. You’re on your own in the insurance marketplace. Seniors would be given a fixed dollar amount via the voucher and they would be responsible for purchasing a plan and paying the difference between the voucher and what it really costs to get a plan with the benefits and services they need. As noted above, the difference will be huge and get larger every year. This is how seniors will be crushed by out-of-pocket health care costs. While they’ll have the option to remain in traditional “Medicare,” they’ll have to pay for it as if it were private insurance.
The new choice offered by the Republican plan is a false one because the Medicare option will go away. The entire scheme is structured so healthier people get cherry picked by private insurers because the inadequate voucher will go farther in the private market for healthier people who need less coverage, while sicker people will prefer the security of “Medicare.” Older seniors and those with chronic conditions will simply be priced out of the private market and that will eliminate one of the key points of Medicare — it spreads out the risk (and has more purchasing power). If Medicare is saddled with only the sicker people, it will whither and die, and the Republicans will achieve their goal. It will just take a little longer. And Medicare won’t be any less dead because a Democratic senator got bipartisan and agreed to preside over the interment.
Despite their rhetoric, the Republican plan isn’t about controlling health care costs, it’s about shifting health care costs from the government to seniors. Instead of cutting waste and insurance company profits, the Republicans make seniors pay more. Instead of asking the 1% to pay their fair share in taxes, the Republicans make seniors pay more. Instead of eliminating corporate tax breaks like subsidies for profit-rich oil companies, the Republicans make seniors pay more. And they do it with a scheme that would totally replace Medicare with vouchers and private insurance.
The Republicans know that their plan to eliminate Medicare is a political loser. That’s why they’re trying to dress it up with a new policy twist and lots of new rhetoric about how they’re the ones trying to save Medicare when the truth is exactly the opposite. Not surprisingly, Mitt Romney has been joining this conversation with plenty of lies of his own. See here, here and here.
The Republicans are trying to blur the lines. They’re hoping to make it harder for voters to see the difference between the two parties on Medicare.
But it’s a bright line and Democrats should make sure to keep it that way. It’s a defining issue that separates the Democrats from the Republicans. Democrats have the moral high ground and a clear electoral advantage. People like Medicare and the politicians who support it. Giving up this difference would be a policy and political disaster for the Democrats.