Congressional Republicans are now proposing that, starting in 2022, new Medicare recipients be allowed to choose from a list of guaranteed coverage options, and “be given the ability to choose a plan that works best for them.” According to Paul Ryan, the plan’s author, “This is not a voucher program, but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneﬁciary, subsidizing its cost. The premium-support model would operate similar to the way the Medicare prescription-drug beneﬁt program works today. The Medicare premium-support payment would be adjusted so that wealthier beneﬁciaries would receive a lower subsidy, the sick would receive a higher payment if their conditions worsened, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.”
According to Ryan, this budget proposal “gives seniors the freedom to choose a plan that works best for them and guarantees health security throughout their retirement years.” The plan and its details can be accessed at http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf
Physicians for National Health Care has analyzed this proposal. The physicians’ diagnosis?
“Under Republican control, the House Budget Committee proposes phasing out the traditional Medicare program and replacing it with an insurance exchange offering a variety of private plans with the government’s role limited to offering a premium support (same mechanism as a voucher) to apply toward the purchase of a plan. This converts Medicare from a defined benefit (specified benefits are covered) to a defined contribution (the premium support being a specified dollar amount contributed toward the purchase of a private plan).
This proposal treats the budget as the patient, curing the budget problems with the trade off of further burdening the Medicare beneficiaries who are already paying too much out of pocket. It shifts future increases in health care costs from the government to the beneficiaries. It is much easier for Congress to control federal spending by limiting the value of the premium support rather than trying to reduce the benefit package.
The proposal would adjust the premium support for those with greater health care needs, but that is very difficult to do in a timely manner in that an adjustment next year doesn’t help to relieve this year’s increased costs. Also risk adjusting is very difficult in that it requires having a precise assessment of each individual’s health status and anticipated needs. It is a profound change from the current Medicare program in which equitable funding through the tax system is divorced from the uniform benefit package which everyone shares.
The proposal also would reduce premium support for wealthier Medicare beneficiaries, requiring them to pay more for exchange plans. Actually this principle of progressive financing already exists. Although the current standard premium for Medicare Part B is $96.40 for most individuals ($115.40 for new beneficiaries), it is indexed to income. Those with an income of $214,000 pay $438.20 (including an added Part D premium only for higher-income individuals).
Although progressive financing is an equitable concept, it belongs over on the tax revenue side for funding of the entire Medicare risk pool. By having it as a progressive premium on the benefit side, it fractures solidarity by creating a desire for the wealthy to obtain their own coverage and care independently of Medicare, since they are paying higher premiums anyway. Once they are on their own, they would look upon Medicare as a welfare program, not unlike Medicaid except with much fewer benefits, and chronic underfunding would be inevitable.
The debate that we should be having is over an improved Medicare for everyone. The sad state of politics today is certainly exemplified by the fact that those supporting the transfer of wealth from the masses to our plutocracy have been able to reframe the debate as a need to save our federal budget by cutting back on our social programs, especially Medicare and Medicaid (while reducing the tax rate on the wealthy from 35% down to 25%). What ever happened to common decency?”
What, indeed. In the same budget proposal, the GOP advocates drastic cuts in Medicaid, which provides (limited) medical assistance to the poor and disabled–and added tax cuts for businesses and wealthy individuals. I can’t help being reminded of the question posed to infamous Senator Joseph McCarthy: “Until this moment, Senator, I think I never really gauged your cruelty or your recklessness.You have done enough. Have you no sense of decency?”
Stripping basic rights from workers and women, launching attacks on immigrants and gays, taking benefits from the poor and elderly to pay for tax breaks for the rich…I guess we know the answer to that question.