Why 'Mediscare' may not work this time for Democrats
E. Thomas McClanahanThe other day I was watching former Vermont Gov. Howard Dean on CNBC do his best to bash the Medicare reform plan authored by Paul Ryan and endorsed, with a key change, by presumptive Republican nominee Mitt Romney.
Dean botched it and the other panelists called him on it. He simply didn’t know the details.
You can almost smell the panic. Dean and many Democrats try to dismiss the Romney-Ryan plan as a “voucher,” suggesting it would send checks to seniors with a note saying, “This is for your health insurance. Good luck.”
Well, no. Today’s seniors wouldn’t be affected at all; the plan wouldn’t be implemented for 10 years. And the money wouldn’t go to individuals, it would go to providers (see below).
Last week President Barack Obama joined other Democrats in recycling the “end Medicare as we know it” line, which the left-leaning PolitiFact site labeled the “2011 lie of the year.” The original version of Ryan’s idea would have offered only private-sector policies, but the latest iteration includes traditional Medicare as one of the choices. How would that “end Medicare”?
As Yuval Levin wrote at National Review, it is only now dawning on Democrats that it is Obama — not Romney — who would cut Medicare for current seniors. The Congressional Budget Office recently estimated that Obamacare will yank $716 billion from Medicare’s planned spending over the next 10 years.
Under Romney, Medicare wouldn’t change at all during that time. Ryan’s version, adopted by the House, called for the same amount of Medicare savings as Obama, but without endorsing specific cuts — such as Obama’s planned $260 billion reduction in payments to hospitals built into the 2013-2022 budget baseline.
Medicare actuary Richard Foster has estimated that those reductions will cause one in six U.S. hospitals to become unprofitable. Democrats say they’re committed to saving Medicare, but what good is this “entitlement” if more doctors and hospitals close their doors to new Medicare patients?
Here’s how the Romney-Ryan plan would work.
Seniors would receive “premium support” they could use to purchase insurance, or choose Medicare. The money would flow to government-approved providers. Each policy choice would have to cover the full range of Medicare services.
How much would each person get in premium support? It would be based on annual competitive bidding by participating insurance companies, with the amount based on the cost of the second-least-expensive plan. Seniors who choose the cheapest plan would get a cash rebate. Those who choose the pricier plans would pay more out of pocket. Sick and low-income people would receive more support. Wealthier recipients would get less.
Suddenly, you would have something new in health care — system-wide pressure to offer more cost-effective deals. Insurance companies, eager to offer the most competitive plan under premium support, would push providers to reorganize, become more efficient and combine services. This competitive element would offer a way around Medicare’s innovation-killing, fee-for-service model that pays lousy hospitals the same as good ones.
Historically, politicians proposing entitlement reform lose in the face of hysterical attacks from the programs’ defenders. Two things are different this year. The Obama administration, not Romney, approved cuts in Medicare’s growth for today’s seniors; that means the usual “Mediscare” campaign will have diminished credibility.
And a long-running movie has been playing in Europe, showing what happens when countries refuse to get their fiscal house in order. There’s a good chance Americans don’t want to be in that movie.
To reach E. Thomas McClanahan, call 816-234-4480 or send email to mcclanahan@kcstar.com.
Mark Hastert
9 months agoHere is a succinct explanation of the difference between Obama and Romney’s plans for Medicare from the LA Times 8/17:
“To recap: As part of the Obama health reform law, Congress voted to reduce payments to certain hospitals, insurance companies and other healthcare providers by about $716 billion over the next 10 years. The law directed the money to help pay for expanded prescription drug coverage for seniors – eliminating the so-called doughnut hole – and to help cover younger Americans who do not have insurance at their jobs. When Rep. Paul D. Ryan, Romney’s choice as his running mate, drafted his budget plan, he included repeal of Obama’s health law. The move would mean Medicare’s main trust fund would run out of money in just four years, rather than 12 under Obama’s plan. And because Romney did not offer any new revenue to cover the $716 billion cost, nor any offsetting reductions, the price tag would simply be added to the national credit card”
Ry-omney cuts the same $716billion amount from Medicare and uses it for tax cuts without making up the difference for the existing beneficiaries. This looks bad for both current Medicare recipients who could be in trouble in as soon as four years and those of us who are currently paying our taxes and needing the system in the future. So when Ry-omney says they won’t touch Medicare for people over 55 it just ain’t so.
The choice is pretty clear. Do we use the money for health care or tax cuts?
George Hunsucker
Northland
9 months agoThank you ET….
I posted the link to Levin’s article. The donkeys will continue to push this and grandma off the cliff, but the THINKING older people realize today’s structure is unsustainable. We realize there must be changes, probably current receipents included.
Ryan’s upcoming week in Florida will be well spent as he gets more FACTS in front of people versus the donkeys demagouging. The donkeys know they cannot run on the big 0’s “performance”, so fear is their tactic. It won’t work this time, people are too smart for the donkey poop….
Mark Hastert
9 months agoI’d say to my conservative friends that they’d better plan on what to do about their health care in a few as four years. Yes Romney won’t touch your Medicare, tt’s going to go broke all by itself. E. Thomas isn’t lying, he’s omitting certain things prejudicial to his cause.
The LA Times has a more detailed explanation in today’s paper (8/18) that can be found on their website. Read it for yourselves
George Hunsucker
Northland
9 months agoThe Levin article again…
http://www.nationalreview.com/articles/313757/grasping-medicare-distortion-yuval-levin?pg=1
George Hunsucker
Northland
9 months agoMore on the lefties…. poor dudes, they have no leader, no plan, only the scare tactics…
http://www.nationalreview.com/articles/314347/man-no-plan-mark-steyn
George Hunsucker
Northland
9 months agoNow the winning of Florida seniors can begin!!!
http://www.foxnews.com/politics/2012/08/18/ryan-in-florida-details-campaign-medicare-plan/
Mark Hastert
9 months agoGH The Levin article doesn’t change the facts that the LA Times article outlines even one iota. You’re gonna be on empty in as little as four years. It also glosses over that fact that Medicare needs more revenues, that the Ry-omneys aren’t going to provide them and thus there will be an increasing gap between the cost of the insurance and the subsidy. Their underlying assumption that competition will close the gap is wishful thinking. The only way it works is to get more revenues or less health care. What we’ll be stuck with is more expensive, worse insurance. But that won’t matter to you and the other current recipients, you’ll be busted by then.
Levin wants to give Ry-omney credit for fixing Medicare but this plan it won’t fix anything at all, it just breaks Medicare in a different way.
George Harris
Kansas City
9 months agoI’ve read (most) of the links, and I may be too slow to get this, but here’s my concern: If the “premium support” or voucher doesn’t keep up with the cost of a policy, how will the government guarantee that seniors will pay the difference and have health insurance. Yes, yes, I get the competition thing, but insurance companies simply won’t offer policies if the money available doesn’t cover the costs. Well, you say, they’d be guaranteed traditional Medicare. OK, but if traditional Medicare is the default choice, then how does any money get saved when private insurance doesn’t work. The only way private insurance can compete with Medicare is if the sickest people are shunted off to Medicare, and I have no doubt that’s what they would try to do. Private insurance companies don’t want sick people, especially sick people near the end of life. And here’s the key point: If the “premium support” is such a great idea, why wait to do it. Do it now for everyone and make Medicare available to everyone as well at the actual cost of Medicare. Make Medicare the “public option” and see if private insurance can compete. The answer is: It can’t (unless they’re intensely regulated and prevented from sending their sick patients to the public option.) It’s just too cute by half for Ryan to delay implementation of the plan to people 55 and under. Make it happen now and watch what those at or near retirement say about the plan. By the time private insurers pay salesmen and administrative costs that Medicare doesn’t have, they can’t compete. That’s why Medicare Advantage failed, even though I’m willing to bet that, on the whole, Medicare advantage customers are less sick than the average Medicare patient. (BTW, eliminating the subsidy for Medicare Advantage is the source of a chunk of the savings in Obamacare.)
George Hunsucker
Northland
9 months agoThe reasons for not doing it now George are at least two I can think of…
One, your side would demagouge that we were “getting rid of Medicare as we know it”(you have to admit you would do EXACTLY THAT) and two, the need to get insurance companies geared-up for the competitive quoting process and the huge increase in enrollees.
I know the lefties don’t think private enterprise can do anything, as evidenced with your leader’s notable quote, “you didn’t create anything”, but what has your side delivered in terms of meaningful cost savings? All you know is to supposedly cut the reimbursement rate and then pass waivers to it year after year. I am sorry, but that hasn’t done a damm thing George.
Why aren’t you willing to take a chance on this? If as you say, insurance companies aren’t competitive, then we are left with traditional Medicare without any money to pay for it…
Again, I think more and more people realize the great society’s Medicare entitlement needs a drastic change, why isn’t your side willing to take a drastic step???????
I know you think private companies will just game the system, but how if they have to take all comers at their quoted prices George????
Mark Hastert
9 months ago“The reasons for not doing it now George are at least two I can think of…”
GH doesn’t want anyone screwing around with his Medicare
Neither do the other seniors.
This plan stinks and everybody knows it. The Ry-omney plan as it currently exists will bankrupt the existing system in as little as four years and it will increase the deficit. All these alleged fiscal conservatives are hypocrites.