By Ron Wyden and Paul Ryan
The Wall Street Journal, December 15, 2011
Our plan would strengthen traditional Medicare by permanently maintaining it as a guaranteed and viable option for all of our nation’s retirees. At the same time, our plan would expand choice for seniors by allowing the private sector to compete with Medicare in an effort to offer seniors better-quality and more affordable health-care choices.
Under our plan, Americans currently over the age of 55 would see no changes to the Medicare system. For future retirees, starting in 2022, our plan would introduce a “premium support” system that would empower Medicare beneficiaries to choose either a traditional Medicare plan or a Medicare-approved private plan. Unlike Medicare Advantage, these private plans would compete head-to-head with traditional, fee-for-service Medicare on a federally regulated Medicare exchange.
Low-income seniors who qualify for both Medicare and Medicaid would continue to have Medicaid pay for their out-of-pocket expenses. Other lower-income seniors would receive fully funded savings accounts to help offset any increased out-of-pocket costs, while wealthier seniors would receive less help.
In the event that these efforts did not stem the rising tide of Medicare spending, there would be a cap on the program’s rate of growth. But unlike other proposals, spending that exceeds the cap would neither be addressed through bureaucratic cuts nor passed on to seniors by default as higher premiums.
Instead, Congress would be required to do its job: Determine why the costs exceeded the cap and – when the evidence merits – reduce payments to providers, drug companies, or others who may be responsible for escalating costs.
Our plan would also expand health-care options for working Americans by giving smaller businesses the opportunity to empower their employees to make their own health-care choices. Under this “free choice option,” employees take the amount that their employer was contributing toward their employer-provided health coverage and use it to purchase their own health insurance instead. The cost to the employer – and the tax-free benefit to the worker – would remain the same.
Yes, these are ambitious reforms, and while we are hopeful for the future, we are under no illusions that they will pass tomorrow. Nevertheless, we offer this plan as proof that Democrats and Republicans don’t have to spend next year making Medicare reform more difficult. Instead, our parties can work together on bipartisan reforms to save and strengthen Medicare.
(Mr. Wyden, a Democrat, is a U.S. senator from Oregon. Mr. Ryan, a Republican, is a U.S. representative from Wisconsin.)
White paper (13 pages):
By Don McCanne, MD
Although Sen. Ron Wyden (D-Oregon) and Rep. Paul Ryan (R-Wisconsin) have released their white paper on a proposal for reforming Medicare, there is no intent on their part to follow it up with legislation during this session of Congress. Their stated intent is to initiate a bipartisan discussion on Medicare reform, but it appears instead that other political considerations prompted this proposal.
Paul Ryan was stung by the response to his original proposal to end the traditional Medicare program and replace it with a premium support (voucher) program of private health plans. The Congressional Budget Office reported that his plan would cause a major shift of costs from the government to Medicare beneficiaries, and his own constituents beat up on him back home. Also, the Republicans in the House of Representatives are now on record as having voted for the Ryan premium support plan, and the Democrats have made it clear that they will make this a major issue in the coming elections.
This white paper gives the Republicans an out. They can now claim that this is better than the original Ryan proposal because it protects Medicare by leaving it as an option while providing more choices of competing private plans. Obviously this takes away the sting of the Democrats’ attack.
Why would Ron Wyden cooperate with Paul Ryan in this effort to defuse the Democrats’ strategy of using the premium support vote against the Republicans? It is because he is more supportive of his own previous proposal for health care reform than he is for the Democrats to prevail in the next election. His Healthy Americans Act that he pushed throughout the reform process called for an individual mandate to purchase private plans, shifting the tax benefit from employers to individuals (a concept included in this white paper). He has said that Democrats want universal coverage, Republicans want choice, and his plan, and now the Ryan-Wyden proposal, would enable both.
The problem for single payer supporters is that this is a digression that shoves the concept of an improved Medicare for all further into the background. The substance of the debate will be over converting the Medicare Advantage plan into a voucherized program competing on price. Single payer supporters will not be welcome participants in that debate, nor should we.
We shouldn’t waste our resources on countering premium support. That’s the wrong debate. We need to continue with a very strong message on countering private, corporate control of health care, while promoting a publicly-financed and publicly-administered Medicare for everyone. That’s the message that America needs to hear.