Paul Ryan’s plan for Medicare sets stage for campaign debate

Posted Aug. 14, 2012, at 8:47 p.m.

WASHINGTON — In selecting Paul Ryan as his running mate, Republican presidential candidate Mitt Romney has taken the unusual step of embracing a man whose deficit-reduction plan is far more detailed than his own.

When questioned on his own plans, Romney often refers reporters to his website and his multipoint plan for getting the economy back on track. Many of those plans are just an endorsement of broad concepts, however.

That’s not the case with Ryan, a seven-term Wisconsin Republican who is the chairman of the House Budget Committee. His deficit-reduction proposals include revamping Medicare, and that has made some Republicans uncomfortable, in part because anything that tinkers with benefits for seniors is often tantamount to political suicide.

Concerned about potential blowback from his pick, the Romney campaign aired a new ad Tuesday that says Romney’s plan would protect Medicare and accuses President Barack Obama of slashing Medicare spending through his health care law. That’s a misleading reference to 165 provisions of the Affordable Care Act that would spend $500 million to $700 million less over the next decade through reduced payments to providers and other provisions.

Medicare is the government insurance program for the elderly and people with disabilities. Last year it covered 48.7 million Americans and had expenditures exceeding $549 billion. As baby boomers, born from 1946 to 1964, hit retirement age, they’re expected to overwhelm Medicare.

Even before Romney selected his running mate, his website touted Medicare-restructuring ideas similar to Ryan’s. Both men support the idea of giving future retirees a fixed amount of money and letting them choose whether to spend it in traditional Medicare fee-for-service programs or use it to buy private insurance.

This private insurance would work off a Medicare exchange, much like the state health care exchanges for today’s uninsured envisioned in the law signed by Obama and derided by Republicans as Obamacare.

Where Romney and Ryan differ, and presumably must reconcile, is in important details, such as how payments for beneficiaries would grow over time as prices rise. Ryan favors capping the per-beneficiary payments to seniors at 0.5 percentage point above the growth rate of the economy. Late last year, he favored a more generous rate of 1 percentage point above economic growth.

Romney is silent on this key detail.

“Mitt continues to work on refining the details of his plan, and he is exploring different options for ensuring that future seniors receive the premium support they need while also ensuring that competitive pressures encourage providers to improve quality and control cost,” the Romney website said. “His goal is for Medicare to offer every senior affordable options that provide coverage and service at least as good as what today’s seniors receive.”

Ryan’s plan is much more detailed. With broader budget-deficit reduction as the goal, Ryan’s plan would revamp Medicare through a voucher-like program called premium support that would give seniors lump sums that they could use to buy health insurance. In addition to capping the percentage by which Medicare costs could grow, Ryan would raise the eligibility age for Medicare from 65 to 67 .

Critics of Ryan’s plan, mostly Democrats, argue that there are insufficient guarantees that caps on benefits wouldn’t simply become a way of transferring most costs to the elderly. But with Medicare’s trustees projecting in April that the program’s trust fund will go broke as early as 2024, liberals and conservatives agree that Medicare growth threatens to overwhelm all other government spending.

“Medicare cannot sustain itself as it is now, and I don’t know any nonpartisan person who believes it can,” said Steve Bell, a senior researcher at the nonprofit Bipartisan Policy Center, a group that has proposed its own deficit-reduction plan, which also includes capping the growth rate of Medicare benefits.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Politics