Ryan’s
radical plan
‘ would
eviscerate
the value of
Medicare.’
—health policy
expert Jonathan
Oberlander
cant [cost] reductions in the program, and
the [current] debate seems to totally ignore that fact,” says Reischauer. Similarly,
he says, the Ryan plan includes “many of
those things that the Republicans argued
against in the Affordable Care Act,” such
as health insurance exchanges.
What of Ryan’s contention that nothing in his plan would change Medicare
for people now over age 55? Not wholly
true, experts say. In repealing the health
care law, his plan would eliminate popular new Medicare benefits such as free
health screenings and would no longer
close the gap in prescription drug coverage known as the doughnut hole. And
over time, beneficiaries in traditional
Medicare would see their premiums rise
as fewer people remain in that risk pool
to share the costs of the program.
In the end, Medicare’s future inevi- tably comes down to politics rath- er than policy. Ryan’s plan “is just another battle in a 50-year war,”
says Jonathan Oberlander, professor of
social medicine and health policy at the
University of North Carolina, Chapel
Hill, and a historian of Medicare poli-
tics. “It’s déjà vu all over again.”
Ever since Medicare became law in
1965, Democrats and Republicans have
fought ideologically over its design—
with liberals favoring it as a govern-
ment-run social insurance system and
conservatives preferring a private insur-
ance alternative.
Currently three out of four beneficiaries
choose the traditional program—in which
they can receive health care from any
provider that accepts Medicare patients,
anywhere in the country—instead of the
local or regional private plans that are offered as alternatives. These other plans,
known collectively as Medicare Advantage, were promoted by Republicans during an earlier time in power in the hope
that the lower costs and extra benefits
they provided would wean beneficiaries
away from traditional Medicare—
allowing that program to “wither on the vine”
in Newt Gingrich’s famous phrase.
But the better deals were made possible only by the government paying the
plans more for each enrollee than it did
for people in the traditional program—
and the Democrats, through the new
health law, are reducing those excess
payments as another way of lowering
Medicare’s costs.
The ideological divide yawns just
as wide among think tanks that study
health care issues. While most liberal
think tanks say Ryan’s plan is too extreme, their conservative counterparts
say it doesn’t go far enough.
So the philosophical war intensifies,
but is unlikely to be resolved before the
2012 elections, if then. “My guess is that
we’re in for at least a decade of repeated clashes over Medicare,” Oberlander
says. “This isn’t a settled issue.” ;
Marsha Mercer is a freelance writer who
covers political and policy issues in Washington. Patricia Barry writes about Medicare for the Bulletin.
; What Is the Ryan Plan?
; Converts Medicare to a
voucher plan (or “premium
support” system) in 2022.
New beneficiaries would
choose a private health
insurance plan from a
government-run insurance
exchange and receive a
government subsidy paid
directly to the insurance
company toward the
premium’s cost. The first
subsidies would be based
on estimates for average
Medicare spending on
each beneficiary in 2022,
adjusted for health status,
age and income.
; Reduces government
health care costs over
time by pegging the
increases in the subsidy
paid to each enrollee to
the annual rate of inflation, which is much lower
than the current rate of
medical inflation.
; Raises health care
costs for Medicare enrollees substantially over
time because they would
pay the difference—out
of pocket—between the
subsidy and the actual
cost of the insurance
premium.
; Continues traditional
Medicare for people
55-plus and those with
disabilities covered by
Medicare before 2022—
but with reduced benefits
compared to current law.
Lets them switch to the
new voucher plan in 2022.
