GOP VP Pick Paul Ryan's Medicare Plan Back in Spotlight

Paul Ryan
By RICARDO ALONSO-ZALDIVAR

WASHINGTON -- Republican Paul Ryan's blueprint for Medicare could prove as polarizing in the campaign as President Barack Obama's health care overhaul has been. Even Mitt Romney may not want to go there.

Romney's new running mate has built a strong reputation on Capitol Hill for bold ideas to restrain health care costs and federal spending overall. His centerpiece idea is to steer future retirees into private insurance plans, with a fixed payment from the government that may or may not cover as much of a retiree's costs as does the current program.

Ryan, a conservative Wisconsin congressman and chairman of the House Budget Committee, calls his idea "premium support." Democrats call it a voucher plan. In theory, Ryan's plan could work, some economists say. But the devil's in the details. Lots of them, and yet to be ironed out.

Ryan would also turn Medicaid over to the states, and sharply limit the growth of future spending on that safety net program. Between them, Medicare and Medicaid cover about 100 million people, touching nearly every American family in some way.

While expressing support broadly, Romney has yet to spell out where he stands on specifics of his running mate's proposals. And that could get tricky.

Mindful of the risks, Romney put gentle but unmistakable distance between his agenda and Ryan's hot-potato budget proposals on Sunday, a day after announcing his running mate's selection. The presidential candidate singled out Ryan's work "to make sure we can save Medicare." But Romney never said whether he embraced that plan himself. During the Republican primary, Romney had called Ryan's budget a "bold and exciting effort" that was "very much needed."

Democrats wouldn't let them off the hook, criticizing the "Ryan-Romney" Medicare plan at every turn.

"From the standpoint of public understanding, the Romney-Ryan ticket has a hill to climb," said health economist Joe Antos of the business-oriented American Enterprise Institute. "I think they can do it, but it's going to require some explaining. I think there are a lot of independents who are going to be nervous."

Seniors vote at higher rates than younger voters, and Medicare matters to them. Concern about Medicare cuts in Obama's health care law helped drive older voters into the Republican camp in the 2010 congressional elections, delivering control of the House to the GOP.

"This puts Medicare in play as a central issue in the campaign," said John Rother, president of the National Coalition on Health Care, a nonpartisan group representing a broad swath of players in the health care system.

The political sensitivities are clear. Polls find that Americans lean heavily on Medicare to help keep them secure after retirement and are suspicious of proposed alternatives, such as Ryan's plan. Surveys also give Democrats an edge over Republicans when people are asked which party people most trust to handle Medicare. Democrats held a 48 percent-39 percent advantage on that issue in a June 2011 AP-GfK poll.

In an interview Sunday on CBS' 60 Minutes, Romney and Ryan both offered words meant to reassure the elderly.

America is about more choices, Romney said, and "that's how we make Medicare work down the road." He said the program won't change for seniors currently counting on the program. Ryan pitched in that his mother is a "Medicare senior in Florida."

For the most part, Ryan's plan would not directly affect people now in Medicare. One exception: In repealing Obama's health care law, Ryan would re-open the Medicare prescription coverage gap called the doughnut hole.

Under his plan, people now 54 and younger would go into a very different sort of Medicare. Upon becoming eligible, they would receive a government payment that they could use to pick a private insurance plan or a government-run program like traditional Medicare. The payment would be indexed to account for inflation, and that could be a problem if health care costs race ahead of the inflation rate.

The private plans would be regulated by the government, and low-income people, as well as those with severe health problems, would get additional assistance. People who pick plans with relatively generous benefits would pay more out of their own pockets.

The transformation would mirror the shift in workplace pension plans taking place over the last 20 years. Medicare would start looking more like a 401(k) plan,instead of being a plan that provides open-ended coverage for a set of benefits.

Ryan would also gradually raise the Medicare eligibility age from the current 65 to 67. In more general terms, Romney has also spoken of providing "generous" but undetermined subsidies to help future retirees buy private insurance, or let them have the option of traditional Medicare. He's also endorsed a gradually increasing age to qualify for benefits.

Some prominent Democrats have supported Ryan's general approach, even teaming up with him on different versions of his proposal. The GOP-led House has passed budgets written by Ryan two years in a row.

Backers say the result of his Medicare plan would be a more affordable and sustainable program, both for taxpayers and beneficiaries. Currently, Medicare's giant trust fund for inpatient care is projected to run out of money in 2024.

But critics see a massive cost shift to beneficiaries.

"The only way to drive real savings is to set a lid on the growth in the voucher," said Democratic economist Judy Feder. "That most likely means shifting costs to beneficiaries, not controlling costs."

Antos, however, called the latest version of Ryan's proposal a "reasonable plan" that "provides a decent benefit for people."

In an analysis earlier this year, the nonpartisan Congressional Budget Office said some of the effects of Ryan's plan "would of necessity be a great deal stronger" than current law, which includes Medicare cuts in Obama's health care law yet to take place.

Under the most likely current budget scenario, Medicare spending for the typical 66-year-old would rise to $9,600 in 2030, or about 75 percent more than now, the CBO projected.

But under Ryan's plan, spending would rise more slowly to $7,400, or about 35 percent more than current levels.

That difference would result in a cost shift of thousands of dollars to individual retirees, critics say.

Under the previous version of Ryan's plan, a typical 65-year-old retiree would have been responsible for about two-thirds of his or her health care costs in 2030.

Ryan's proposal for turning Medicaid into a block grant program for the states would also have far-reaching consequences. It sharply reduces the future size of the program relative to the overall economy, the CBO said.

Even if states can run Medicaid more efficiently, they'd still face the difficult choice between cutting the program or pouring more of their own money into it, the CBO said.

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roxx

Ryans plan is pretty simple actually when you boil it down. Rather than setting up a board of bureaucrats to ration care, thats what Sarah Palin called the Death Panel and which might actually become one if the costs go high enough, Ryan lets seniors buy their own major medicals. Thats illegal under ObamaCare. So, you have to ask yourself, do you want to pay for protection that the govt might decide you cant have or do you want to keep your money and take the risk. I am healthy and think I am going to live forever so I ll keep my money. You might want to buy extra coverage. The choice is yours under the Ryan Plan. But not under ObamaCare. There, the choice is theirs. Thats really about all there is to it. So, you decide and dont let anyone bully you.

August 15 2012 at 6:55 PM Report abuse -1 rate up rate down Reply
hgeorgech

OK, we get it that if one is now > 54 years old, Medicare benefits (in its present form) will continue when those persons reach Medicare eligibility age - unchanged. Those now younger than 55 will go on some sort of voucher system - get healthcare thru the free market insurance companies where competition may reduce costs ...

Since Medicare (along with SS) has been on a pay-as-you-go basis for decades with those currently working - and contributing via FICA/Medicare withholding - are supporting people who now are receiving Medicare benefits, what happens to those withholding $$$s when people < 55 go on the voucher system ... who pays in to the traditional Medicare kitty to support the 20+ million people on traditional Medicare?

Is this part of the "new math" that is being taught in schoold these days?

America needs to know !

August 14 2012 at 5:09 PM Report abuse rate up rate down Reply
1 reply to hgeorgech's comment
Setanta

what you need to know to BEGIN WITH IS that mediCARE is broke/flat broke the same as social security and that's why EVENTUALLY it will all be SOLVED as in no money-- no nothing.

August 14 2012 at 7:20 PM Report abuse rate up rate down Reply
1 reply to Setanta's comment
lv2xplore

Not true its good til 2036 ..The GOP has been trying to end Medicare and SS since it started

August 15 2012 at 12:29 AM Report abuse +2 rate up rate down
democracks0

Obamites are out in full force today with their Nancy Pelosi handbooks on fear mongering close at hand.

August 14 2012 at 12:43 PM Report abuse rate up rate down Reply
jhrooney

Do you hear that? Does not apply to anyone under the age of 54? For all of you that say keep Medicare the way it is, What are your alternaives? It will take a lot more than the top 1% paying more so forget that refrain. How about you are start paying 20% medicare tax including the people who don't pay any federal income tax today? Can't pay it fine, then you better figure out how to pay it. Is this harsh, yes it is, but the problem is harsh also, Entitlements make up almost 50% of goverment costs and we borrow 40cents of every dollar we spend. Stop crying and face relatity.

August 14 2012 at 12:03 PM Report abuse rate up rate down Reply
2 replies to jhrooney's comment
theycallmeroy3

Depends if 70% of people who want to keep Medicare exactly the way it is, are willing to face a spinning reality. That % has not changed.

August 14 2012 at 1:45 PM Report abuse +1 rate up rate down Reply
lv2xplore

So lets give the top 1 % a free ride on taxees that will help NOT ...

Medicare is fine and is being fixed and will be sustaiable for years ...

Under Ryan you better hope you dont get really sick cause he has a cap on how much the insurance will cover ,,,,

August 15 2012 at 12:31 AM Report abuse +1 rate up rate down Reply
yurday6

Does anyone want their Medicare plan to look like a 401K this plan is not a plan.

August 14 2012 at 8:24 AM Report abuse +1 rate up rate down Reply
ha6ai

The co-sponsor of the Romney plan is the most liberal Senator, Ron Wyden of Oregon.

While Obama has refused to lead, and is gutting Medicare of over $700 Billion, and limiting treatment for seniors through a 15 member "independent board", refusing them treatment chosen by their doctors and them, and slashing payments to doctors, Romney and Ryan have an overall good plan to save Medicare.

While Obama seeks to cut Medicare and "redistribute wealth" to the inner cities, Romney will save it for generations to come.

August 14 2012 at 6:24 AM Report abuse -1 rate up rate down Reply
3 replies to ha6ai's comment
Taina

The only thing for sure about Medicare is that if nothing is done, it will go bankrupt in a little over 5 years.

August 14 2012 at 1:22 AM Report abuse -1 rate up rate down Reply
1 reply to Taina's comment
lv2xplore

Thats NOT true ..go to factcheck.org

August 15 2012 at 12:34 AM Report abuse rate up rate down Reply
kafienkarl

Many republicans won't admit they weren't liking Romney until he became the candidate. He bought the candidacy. Where's the tax returns Romney?

August 14 2012 at 12:59 AM Report abuse -2 rate up rate down Reply
2 replies to kafienkarl's comment
ha6ai

Stop the Obama fascist lies!

August 14 2012 at 6:25 AM Report abuse rate up rate down Reply
1 reply to ha6ai's comment
Somey

Boo Hoo Hoo

August 14 2012 at 7:27 AM Report abuse rate up rate down
Setanta

c'mon kafi==you can't do better that that ? he bought it ?
so WHO SENT obummer ?

August 14 2012 at 7:24 PM Report abuse rate up rate down Reply
kafienkarl

I looked up Romney's past thinking he surely went to Vietnam War to serve his country. Nope he went to France instead. Now that's American

August 14 2012 at 12:33 AM Report abuse +1 rate up rate down Reply
democracks0

I'm too tired to keep posting to all Evans different screen names. later Evan. Got to get up early for work to help fund all your welfare benefits.

August 14 2012 at 12:27 AM Report abuse rate up rate down Reply
1 reply to democracks0's comment
kafienkarl

I'll be here tomorrow.

August 14 2012 at 12:32 AM Report abuse -1 rate up rate down Reply
1 reply to kafienkarl's comment
democracks0

later evan

August 14 2012 at 12:33 AM Report abuse +2 rate up rate down