The campaign conversation we're having now was accurately predicted last year by Rep. Steve Israel of New York chairman of the Democratic Congressional Campaign Committee: “Medicare, Medicare, Medicare.” With all the spin and bluster about what the candidates would do to the beloved health insurance program for seniors, here are 10 oft-distorted facts you need to know about the program and the plans.
1) President Obama’s cuts to Medicare do not affect any benefits. The Mitt Romney's campaign has been accusing the president of robbing current retirees to pay for the health care law’s coverage expansion. It is true that the Affordable Care Act made some cuts to growth in Medicare spending, but none of the cuts were to benefits for seniors. In fact, the law gives seniors more help paying for subscription drugs and eliminates co-payments for a number of preventive health services.
2) Romney’s plan would not affect Medicare beneficiaries over 55. Current seniors would keep the Medicare they have now, minus the new goodies they got from the health care law. The Romney program, which would replace the government-run program with a system that gives seniors vouchers to purchase health insurance, wouldn’t begin kicking in for 10 years.
3) Romney does not want to eliminate Medicare. The Romney proposal would preserve traditional Medicare as an option for seniors to buy with their vouchers. But it’s possible that the government program would prove more expensive than private plans once it’s forced to compete for customers—we don’t know. If so, seniors may have to pay more out-of-pocket if they want the old program.
4) Seniors will (probably) not have to pay $6,400 in annual premiums under Romney’s plan. Obama and Vice President Joe Biden have been giving seniors sticker shock with this number, but it’s based on an analysis of Rep. Paul Ryan’s 2011 Medicare reform proposal. The newest version may still shift costs to seniors, but it will almost certainly be less than $6,400 a year. Bear in mind, predicting cost growth in the program involves a lot of guesswork anyway.
5) Ryan was for Medicare cuts before he was against them. In his recent budget proposal, Ryan would have used the cost savings from the Obama health care law, and suggested further cuts to Medicare. Now that he’s on the Romney ticket, he says he would repeal all of the Obama law’s savings but has been less clear about his own proposals.
6) Obama’s health care law would empower a government board to cut Medicare payment rates, but not to reduce benefits. The law establishes an independent board tasked with keeping spending per beneficiary below the growth in gross domestic product plus 1 percentage point. But the law strictly limits how the board can do that—it can’t ration care, restrict benefits, or change eligibility rules for the program. A supermajority of Congress can veto any of the board’s recommendations. In his 2013 budget proposal, the president suggested dropping the growth rate to GDP plus half a percentage point.
7) The candidates basically agree on how fast Medicare should grow. Though the mechanisms are different, both Ryan’s budget and Obama’s want per-beneficiary spending to grow at a rate of GDP plus half a percentage point. (Romney himself has not specified a number but said recently that his plan is "close to identical" to Ryan's.)
8) Romney’s reform plan may not reduce the deficit. Because Ryan and Romney have renounced the Medicare cuts in the Obama law, their plan would save no money for 10 years and actually cost more than $700 billion compared with current law. After that, its capped growth would begin at a higher starting point. According to the Medicare trustees, eliminating the cuts will make the program’s hospital trust fund insolvent in 2016.
9) Neither plan solves Medicare’s long-term cost problem. The aging of the baby boomers means that the program’s rolls will nearly double by 2030. That’s a problem that neither candidate’s proposals will fully address.
10) The Romney proposal has a bipartisan pedigree. “Premium support,” as it’s known in health policy circles, was not invented by Ryan. It dates back to the 1990s, and has been supported by congressional Democrats as well as Republicans. More recently Alice Rivlin, a former Clinton administration official, and Sen. Ron Wyden, D-Ore., have endorsed premium-support plans, although not the Romney plan specifically.
This article appears in the August 29, 2012, edition of NJ Convention Daily.