As a greater number of the population is growing older thanks to the aging baby boomers, and life expectancy continues to get better for the majority of Americans, one of the most contentious issues in the federal budget is the expanding cost of Medicare.† Earlier this year, the Republicans released a plan to “save” the program by turning it into a voucher program that most seniors would then need to supplement with their own income.
The proposal, written by Wisconsin Rep. Paul Ryan, was a dismal flop, and so unpopular it was believed to be one of the key elements of a special election win in a Republican New York district by Democrat Kathy Hochul.
Now, Ryan is proposing a new Medicare plan, and this time, he is doing it in conjunction with Democratic Sen. Ron Wyden of Oregon.† The Ryan/Wyden Medicare proposal would combine Ryan’s plan to offer vouchers so that seniors can purchase their own private insurance with their own additional finances with the already existing Medicare system, allowing seniors to chose between the two plans.† But it would also put a cap on Medicare spending, a dangerous path that could mean cutting services or access down the line.
Perhaps what is most interesting about the proposal is that, according to Ezra Klein, it actually is set up to act much as President Barack Obama’s Affordable Care Act does.† “[T]he secret of these types of premium-support platforms is that they are, in essence, a vindication of the Affordable Care Act. The cost containment is supposed to come through competition between plans….In other words, the competition is driven by tying the subsidy to the second-least expensive plan in the market. That way, the system gives beneficiaries a financial incentive to choose the cheaper plan. That is exactly– exactly! — how the Affordable Care Act works. The difference here is that the system will include a massive public option in Medicare, which is something conservatives refused to allow in the Affordable Care Act.”
In essence, there would be a public option (traditional Medicare) and a private option (private insurance) just as when health care reform is implemented fully there is the public exchange that can be used if you cannot afford or access private insurance.† Some are concerned that the same problem could face Medicare as could potentially face health care reform — that there will be a two tier health care system with the sickest on the lowest tier.† But at the very least, unlike Ryan’s original proposal, this version doesn’t phase out Medicare all together.
Still, just because it’s bipartisan doesn’t make it a “compromise.” Klein writes “The real gen≠esis of this proposal, I suspect, is that Wyden just believes this is the right direction for Medicare. Wyden believes in choice and competition. This isnít a trade. Itís not a compromise policy. Itís just a policy that both Ryan and Wyden support as a next step for Medicare.”
One thing it definitely does do?† Provide political cover for GOP presidential hopefuls Newt Gingrich and Mitt Romney, both of whom have been criticized for supporting plans that had elements much like “Obamacare” does.† No matter who comes out the winner, both will be able to count this as one issue that will hopefully be a non-starter.
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