Wednesday, May 25, 2011

Tacking on Medicare after voters' storm -- May 25, 2011 column


Vouchers? What vouchers?

House Budget Chairman Paul Ryan has thrown vouchers, if not Grandma, off a cliff as he tries to salvage his Medicare overhaul following Tuesday’s Democratic upset in a special election in New York’s traditionally Republican 26th congressional district.

“This isn’t a voucher program,” Ryan declared after Democrat Kathy Hochul beat Republican Jane Corwin in a three-way race with Jack Davis, a wealthy Democrat-turned-tea-party-independent.

Hochul ran against Ryan’s budget plan to restructure Medicare and won 47 percent of the vote. Corwin, who backed the Ryan Medicare plan, got 43 percent and Davis 9 percent.

His Medicare plan is actually a “premium-support program,” said Ryan, a Wisconsin Republican.

Ryan will need more than a word change to move Congress on this volatile issue.

As Ryan describes his plan, beneficiaries would choose from an approved list of Medicare plans, and Medicare would send the premium-support payment, subsidizing the cost, to the plan.

House Republicans passed the budget last month, igniting voter protests. The Democratic-controlled Senate eagerly defeated the plan Wednesday, after the NY-26 election emboldened senators.

Now what?

“Medicare is $30 trillion in the hole,” Ryan warns, and the problem isn’t going away by itself.

Whether he calls the mechanism a voucher or premium support, Ryan’s plan would change fundamentally the way future seniors get health care.

Today, Medicare’s promise is that once people reach 65, government health insurance covers their medical expenses. Under the Ryan plan, the guarantee is gone.

The government would subsidize the premium by a set amount that would grow at the rate of inflation. The subsidy amount would vary by the beneficiary’s wealth, with poorer people getting a higher subsidy. People who are sick also would get higher payment support. The beneficiary would pay the difference between the subsidy and the premium.

People now 55 or older could keep the current Medicare plan or change to the new system, but workers now 54 and younger would have only the new subsidized plan starting at retirement, in 2022.

Ryan is under fire from Republicans and Democrats, but he charged that Democrats have been “demagoguing” his plan, trying to scare seniors.

While this is hardly a new notion in the politics of Medicare and Social Security, it’s also true that perhaps the most tasteless and disgusting ad ever features a Paul Ryan-lookalike pushing “Grandma” in her wheelchair and dumping the elderly woman off a cliff while “America the Beautiful” swells in the background.

“Is America still beautiful without Medicare?” asks the ad, the product of The Agenda Project, a left-leaning group.

It’s a quick, cheap hit that you can watch in a fraction of the time it takes to listen to an explanation of the plan. And that’s a problem for anyone who might want to try to make the system solvent, rather than just make political points.

Ryan tried to ally his plan with one by Alice Rivlin, former director of the Office of Management and Budget in the Clinton years. Premium support was a major recommendation of the bipartisan Commission on Medicare Reform in the late 1990s.

Last year, Rivlin and former Sen. Pete Domenici, R-N.M., led the Bipartisan Policy Center’s Debt Reduction Task Force that proposed transitioning Medicare to a premium-support program starting in 2018.

But Rivlin wrote in Huffington Post recently that Ryan took an idea that had bipartisan support and killed it by turning it into something that neither Democrats nor Republicans could like.

One area where Ryan strays is in not allowing future recipients to choose between current Medicare and the new plan. Ryan also would cap the subsidy amount at a lower rate of growth, so that seniors would have to pay much more for their health care than they do now or would under the debt reduction task force proposal.

Former President Bill Clinton, who knows something about the pitfalls of trying to make big changes in health care, said that while the NY-26 election was about Medicare, it would be a mistake for anyone to conclude that the race means nothing can be done to solve Medicare’s escalating costs.

“I’m afraid that the Democrats will draw the conclusion that because Congressman Ryan’s proposal is, I think, not the best one, that we shouldn’t do anything – and I completely disagree with that,” Clinton said Wednesday in a speech.

Ryan was speaking at the same event, and the two met backstage. Clinton told Ryan to give him a call if he wanted to talk. It could be a start.

©2011 Marsha Mercer. All rights reserved.

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