Scrutiny of Mitt Romney’s Medicare reform policies are sure to intensify with his choice of Rep. Paul Ryan, R-Wisc., as his running mate. Though he has since softened his stance, Ryan's original 2011 Medicare reform plan has remained a powerful Democratic attack target and a policy deeply unpopular among the nation's seniors.
Both Romney and Ryan now support a kinder, gentler version of Ryan’s original, polarizing plan, which would have eliminated the government-run insurance program in favor of a fixed-value voucher plan for seniors. The refined proposal would preserve traditional Medicare as a choice, but encourage seniors to shift to private plans that offer lower premiums by forcing traditional Medicare to compete on price.
That may not slow attacks—Democrats have found claims that Republicans want to “end Medicare as we know it” to be useful. Already, President Obama has been offering misleading critiques of Romney’s proposal, using calculations based on the older version of Ryan’s plan. Seniors, a group that generally lean Republican, oppose nearly any changes to Medicare, and polling suggests they are not following the policy nuances. Ryan, with his close public connection to the notion of Medicare reform, could renew such debates.
“I think what Gov. Romney wanted to do was endorse the principle,” said Robert Blendon, a professor at the Harvard School of Public Health who studies public attitudes towards health care. “Without getting into the details that would allow people to write the story about what this will mean for retirees in the future.”
The two men agree on the key points: beginning in 10 years, seniors will be able to choose between private plans and traditional Medicare; the voucher value will be based on competitive bidding between insurers; and richer seniors will pay a bigger portion of the tab than their less wealthy peers. Indeed, Romney’s website says that Ryan’s latest plan “almost precisely mirrors Mitt’s ideas.”
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Still, there are some differences between the two plans, and some unanswered questions that could determine how Medicare reform would work in a Romney administration.
-SPENDING CAPS. Both Romney and Ryan endorse the partial privatization of Medicare because they expect that competition will save the program money in the long run. But how much is an open question. Ryan’s plan, developed with Sen. Ron Wyden, D-Ore., includes a hard cap on how much spending in Medicare can grow over time. Beginning in 2023, annual increases on a per-person basis can’t exceed growth in the Gross Domestic Product plus one percent. That growth rate is less generous than historic rates of health inflation, which means that analyists (and opponents) can easily calculate the potentially growing gap between the value of a voucher and the cost of insurance. Romney’s plan spells out no such limit.
-RETIREMENT AGE. Romney supports increasing the retirement age over time, indexed to increases in life expectancy. The Ryan plan keeps the age of eligibility at 65. Polling suggests that raising the age of eligibility is one of the few Medicare savings measures that doesn’t upset seniors. A February survey from the Kaiser Family Foundation found that 63 percent would support gradually increasing the eligibility age as a way of reducing the deficit.
-THE POOREST SENIORS. The Wyden-Ryan plan has provisions to address the needs of the so-called “dual eligibles,” poor, frail seniors who are enrolled in both Medicare and Medicaid. The dual population is both vulnerable and expensive to treat. Duals would still have a choice of plans, but would get additional funding to pay for premiums, copayments, and deductibles. Romney has not yet specifically addressed the dual population, though he has indicated that poorer seniors would get more generous vouchers than seniors with higher incomes.
-RISK ADJUSTMENT. The Ryan plan indicates that premium credits will be adjusted based on which seniors choose different insurance products, a measure designed to prevent one plan’s prices from spiraling out of control just because it includes older, sicker patients. Traditional Medicare could be at particular risk. Romney has been silent on the question of risk adjustment so far. "The language sounds more like a voucher than a risk-adjusted payment, which could penalize older or sicker seniors," said former Congressional Budget Office Director Alice Rivlin, who has developed her own Medicare reform proposal, in an email.
On the whole, these are wonky distinctions, likely to be of interest to policy experts, but not the public. Public opinion on Medicare slants heavily in favor of the status quo, a fact that could make any renewed emphasis on the program a political liability.
“What Americans care about is they want to change Medicare,” said Mollyann Brodie, Kaiser’s pollster. And, she adds, they don’t much like it.