In a move that could hurt Democrats’ ability to campaign against Republicans on Medicare in next fall’s elections, Democratic Sen. Ron Wyden is teaming up with Republican Rep. Paul Ryan on a Medicare overhaul plan that would give beneficiaries a set amount to use toward buying private coverage or to pay for a traditional fee-for-service plan.
I took a quick look at the Wyden-Ryan proposal on Medicare (pdf).
Skip the first couple of pages, because those are primarily devoted to coyly extolling the virtues of Wyden and Ryan. Not those two specifically. People like them. Brave people. Honest people. In any event, once you’re past how great and brave and principled two certain members of Congress are, this is the (vague) proposal, and my initial thoughts:
For those currently enrolled or near retirement (55 or older), we propose no structural Medicare changes that will affect their benefits. For future seniors (those now 54 or younger,) we propose to strengthen Medicare by transitioning the current program toward a coverage-support plan with the choice of guaranteed coverage options – including traditional Medicare – on a Medicare exchange. The coverage-support value would be adjusted to provide additional support for the poor and sick, and reflect a reduced subsidy for the wealthy.
For future seniors (those now 54 or younger,) we propose to strengthen Medicare by transitioning the current program toward a coverage-support plan with the choice of guaranteed coverage options – including traditional Medicare – on a Medicare exchange. The coverage-support value would be adjusted to provide additional support for the poor and sick, and reflect a reduced subsidy for the wealthy
I had to read it a couple of times to find the section where they expect to save money.
This is it, I believe:
The Medicare Exchange would provide seniors with a competitive marketplace where they could choose a plan the same way Members of Congress do. All plans, including the traditional fee-for service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution seniors would use to purchase the coverage that best serves their medical needs. The second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the coverage-support amount for the plan chosen by the senior. If a senior chose a costlier plan than the benchmark, he or she would be responsible for paying the difference. Conversely, if that senior chose a plan that cost less than the benchmark, he or she would be given a rebate for the difference. Payments to plans would be risk adjusted and geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit package provided by fee-for-service Medicare.
On the rhetorical/political side, there’s mention after mention of “competition”, and a sappy love letter to Medicare Advantage that includes this gem:
Medicare Advantage is not without flaws.
The biggest flaw being that it didn’t save us any money. The whole point of Medicare Advantage was to introduce competition and save money, so I’d have to agree it’s “not without flaws”. That’s all Ryan’s input, I suppose.
Wyden, on the other hand, contributed some quotes from famous Democrats and many regulatory promises, like this:
This reformed Medicare program will include the toughest consumer protections in American government.
Ryan got the better part of the rhetorical/political collaboration, I must say, in terms of language. When re-reading the plan as a political pitch, rather than anything substantive, just looking at language choice, it’s 90% strident free market conservative and 10% vague assurances that vulnerable old people will be protected through regulation.
There’s a section on changing the rules on employer-provided health insurance, too, but I didn’t get to that.
Update, via TPM:
But to give you a sense for just how poisonous Wyden’s colleagues on the Hill find this alliance — both on policy merits and on political grounds, here’s a quote from a very senior Dem congressional aide.
“For starters, this is bad policy and a complete political loser,” this aide said. “On top of the terrible politics, they even admit that it dismantles Medicare but achieves no budgetary savings while doing so — the worst of all worlds. Thanks for nothing.”
Ryan and Wyden both contend that, when it’s finally drafted, their legislation will score as a cost saver, because it includes an enforcement mechanism: if Congress can’t find health care savings on its own, the plan automatically caps spending on the program and allows it to grow at a rate lower than medical inflation.
But setting the policy argument aside, the bigger point is that a lot of Dems feel like Wyden’s trespassing here, and hanging his colleagues out to dry on the politics as well.
That’s true, by the way. There’s no savings in the actual plan.
