Romney would convert the single-payer health insurance program into a constellation of private, competing plans. Beginning in 10 years, seniors would get a voucher to buy coverage, priced according to a competitive bidding system, and could choose among private options or traditional fee-for-service Medicare. Key details about how the program would work and how the value of the vouchers would be set are unclear. The most recent plan from Romney’s running mate, House Budget Committee Chairman Paul Ryan, would index growth of the Medicare voucher to a set target; Romney’s comments leave open the possibility that costs would be determined by annual bidding, which would provide more-generous subsidies (but fewer savings) if health care costs rise. The idea is to lower costs through market competition, providing insurers an incentive to attract customers and giving individual beneficiaries an incentive to seek the cheapest policies. Romney has said that the market will control costs better than the government, although the Congressional Budget Office rejected that premise in a 2011 analysis of Ryan’s plan. Romney would gradually raise the retirement age by indexing it to life expectancy and would vary some premiums according to beneficiaries’ incomes.
The former governor would restructure the Medicaid program to give the states much more control but, potentially, much less money. The federal government now pays a percentage of all Medicaid medical claims and also sets rules about benefits and eligible populations. Romney would transform the program into a block grant that would hand over predictable cash grants to states with few policy strings attached. Grants would rise at the rate of gross domestic product growth plus 1 percent. He says that the plan would give states greater flexibility to care for their poor as they see fit and would create incentives to improve efficiency and root out abuse. Critics warn that inflexible spending increases wouldn’t keep pace with health care costs, demographic changes, or increases in the number of eligible residents that accompany economic downturns.
Like Obama, Romney has only gestured in the direction of Social Security reform, saying that the retirement age should keep rising over time and that higher-income beneficiaries should get skimpier benefits than lower-income beneficiaries.
Although Romney has said little about food stamps, he has indicated that he favors converting the program to a block grant, as he would do with Medicaid. The details are unclear, but in the Ryan budget, which Romney endorses, grants increase by fixed formulas and eligibility is tied to work or job training, not just poverty.
While governor, Romney took advantage of the federal match for Medicaid and the State Children’s Health Insurance Program to cover more Massachusetts residents. His landmark health reform plan relied on additional federal Medicaid funds, obtained through a special waiver. Romney also asked Medicaid recipients to pay more, instituting co-payments for some services.
Romney became eligible for Medicare this year when he turned 65, but his campaign said he did not enroll in the program.
As governor, Romney tried, and failed, to convert the state employee pension program from a defined-benefit system to defined-contribution plans.
Paul Ryan: The House Budget Committee chairman’s proposals for entitlement reform have formed the blueprint for Romney’s proposals. Even before his selection as Romney’s running mate, Ryan advised the campaign on budget issues and served as a powerful Romney surrogate.
Tevi Troy: The former deputy secretary in President George W. Bush’s Health and Human Services Department has overseen Medicare and Medicaid, among other health programs. He is part of Romney’s health care policy advisory group.
Lanhee Chen: The former Bush administration official has academic training in health policy. He runs the campaign’s domestic-policy shop.
Mike Leavitt: The former Utah governor and Bush administration Health and Human Services secretary has been tapped to lead Romney’s potential transition team. He is chairman of Leavitt Partners, a consultancy that is helping states implement health care reform.