Short Takes On News & Events

Wyden Joins Forces With Ryan On Medicare

By Marilyn Werber Serafini and Mary Agnes Carey

December 15th, 2011, 11:00 AM

Updated at 11:00 a.m. on Dec. 15.

A new Medicare overhaul plan touted as a serious bipartisan approach was unveiled today, but it leaves out key details about how it would avoid raising seniors’ premiums.

Photo by Talk Radio News Service via Flickr

Democratic Sen. Ron Wyden is teaming up with Republican Rep. Paul Ryan on a Medicare overhaul plan that would give beneficiaries a fixed amount to use toward buying private coverage or to pay for a traditional fee-for-service plan. Under the proposal, if Medicare spending rises beyond a certain level, and Congress does not intercede, seniors would pay more.

The effort is the latest attempt to curb spending in the giant entitlement program, which is growing faster than general inflation. The bipartisan plan could also play a role in the current campaign and might hurt Democrats’ ability to campaign against Republicans on Medicare.

The key to the plan’s success is getting Congress to step in and make changes to Medicare if spending exceeded Gross Domestic Product plus 1 percent after 2020, the two lawmakers said this morning at the event sponsored by the Bipartisan Policy Center. That could mean anything from attacking fraud and abuse in the system to cutting payments to medical providers to giving less help to wealthier seniors, they said.

The two said they were sure Congress would act to avoid increased premium costs across the board. “There is no greater incentive for members of Congress to step in and fix it before [seniors are hit] with a premium hike,” said Wyden. “The alternative is to put the government on auto pilot and stick it to seniors. This puts the burden where it ought to be, on Congress.”

Wyden, from Oregon, and Ryan, from Wisconsin, didn’t address the prospect of failure of Congress to act, even though Congress has not met with success in recent super committee deficit reduction negotiations and is now again facing the prospect of a federal government shutdown.

Congress has ignored past triggers.  The 2003 Medicare Modernization Act that created the prescription drug benefit, for example, included a trigger mechanism. If Medicare’s trustees projected in two successive years that at some point in the following seven years general revenues must be tapped to pay at least 45 percent of total Medicare costs, the president would have to submit “corrective” legislation to Congress in the next budget. Although the trigger was hit more than once, Congress ignored it.

Wyden said that the new plan should appeal to progressives and conservatives. But some Democrats disagreed. Rep. Pete Stark, D-Calif., a liberal, said the proposal “ends Medicare as we know it, plain and simple. If these two get their way, senior citizens’ health coverage will depend on what big insurance offers and what seniors — most of them on modest, fixed incomes — can afford. That combination will jeopardize health and economic security for seniors.”

Wyden and Ryan today joked about their partisan differences, although there were hints of tensions to come when addressing any changes to Medicare. Wyden wants the health care law to remain, while Ryan is looking for repeal. When Wyden said that traditional Medicare “acts like a public option,” Ryan interjected, “Try not to use those words.”

Wyden said he was “not oblivious to the politics” of the current campaign season and that the two wouldn’t create a detailed legislative plan until after the fall’s presidential election to “lower the decibel of the [Medicare] discussion.”

Their “premium support” proposal would begin in 2022. Private insurers would compete against traditional Medicare on an exchange, and a yearly bidding process would determine how much money Medicare would spend on each beneficiary.

The cost of the second-least expensive plan, or what fee-for-service Medicare costs — whichever is cheaper — would be the amount provided by the government to beneficiaries, with those payments being adjusted for risk and geography. Seniors who chose more expensive plans would pay more out-of-pocket for coverage, and those who picked plans that cost less than the benchmark amount would get a rebate.  Private plans would be required to provide at least the same level of benefits as traditional Medicare. The proposal, which isn’t expected to gain any traction on Capitol Hill in the midst of a heavy campaign season, would cap how much seniors would pay out of pocket for their care –  traditional Medicare doesn’t have that now.

The plan is similar in approach to a proposal GOP  presidential candidate Mitt Romney proposed last month.

Ryan unveiled a Medicare plan earlier this year that would have eliminated fee-for-service as an option as of 2022  and would have required seniors to pay more for their coverage.   A Congressional Budget Office analysis projected that under Ryan’s Medicare plan, by 2030 a typical 65-year old would be required to pay 68 percent of the total cost of his or her Medicare-covered services. That compares with the 25 percent they would pay under current law. Democrats pounced on the Ryan proposal, saying that Republicans wanted to fundamentally change the nature of the entitlement program that provides coverage to 48 million elderly and disabled Americans.

While Wyden is known for reaching across the aisle to craft a compromise – he co-sponsored health overhaul legislation with former Sen. Bob Bennett, R-Utah, in 2007 and 2009 – some Democrats are scratching their heads over why Wyden would team up now with Ryan over the politically sensitive topic of Medicare.

“Why in the world he agreed to help Ryan get out of the rock he was under is beyond me,” said a former senior Senate Democratic aide who asked not to be named due to the sensitivity of the issue.  “This is a bad move on a couple different levels, and has the potential to take away a key argument for Democrats that are trying to retake the House.”

8 Responses to “Wyden Joins Forces With Ryan On Medicare”

  1. R Quinn says:

    They are kidding, right? “Competing” with the same fixed benefit level is no competition at all. Isn’t Medicare Advantage essentially the same thing ? If this concept works all they have to do is tweak that program. Besides, the whole idea that more insurers enhance competition that lowers health care costs is bogus.

    There is plenty of so called competition out there and has been for decades, why hasn’t it worked to date?

  2. ann frohman says:

    Middle class seniors will have to pay for coverage in this approach. Current fee-for-service Medicare will be expensive and likely not the second most affordable plan. So, why is it that these two miss the point. The actual cost of care, rather than who pays for it, wasn’t addressed here. Costs are borne in medical schools needing wall street technology charged back to students. Wall street desires to profit from the technology firms that serve us. Rightly so, historically. However, we can no longer afford all the investor driven technologies. So, even if you introduce private insurance competition, as this proposal does, health care costs will escalate. Until we grapple with research and development patents that protect wall street returns and the expense of educating students in medicine, we will not be able to afford the technology that is available. So go ahead and continue to try to find ways to pay for it and leave seniors with the cost problem. This is rearranging the chairs on the Titannic, yet again.

  3. Cost of care & duplicative and complicated administrative costs that contribute to it should be addressed. I say if we stop providing health benefits for Congressional representatives & their families & make them get insurance on their own like the rest of us – there will be TONS of budget money left over & available for Medicare expenditures. Maybe Ryan should give himself a voucher to purchase & stop taking taxpayer monies to pay for his own benefits – especially given that he’s a wealthy trust fund baby that doesn’t walk the same planet as the rest of us. . . . .bogus.

  4. Alberto Enriquez says:

    Senator Wyden’s “Healthy Americans Act” was pronounced DOA by committee chair Max Baucus in May 2009. Wyden is a famously ineffectual senator and could not even get a hearing for it on his own committee.

    Nevertheless, Wyden’s intransigence did manage to do more than almost any other Democrat to stall and prevent the creation of a truly cost-effective, strong NATIONAL public option. Then, at the last minute, Wyden tacked on one of his classic tag-along amendments that claim credit, but he actually accomplished nothing, because Medicaid already allowed states to create their own individual public options, but what significance has a tiny state like Oregon negotiating against Big Pharm? Zip.

    When all was said and done, a grateful Blue Cross gave Wyden $10,000!

    Can we trust Wyden not to privatize Medicare in a stupid way that actually lines the pockets of CEO’s who pay themselves $14 million average salaries and end up costing Americans more? Not based on Wyden’s voting record.

    I just called his office and found the box full, so I’m guessing many Oregonians aren’t willing to take him on faith anymore. What we need, more than Medicare reform, is an effective, organized primary challenge to Wyden in 2016.

  5. Bill Stuart says:

    Too many critics of an approach like this presuppose a current system that’s working for patients, providers and taxpayers. News flash: It isn’t. Medicare restricts seniors’ options (fewer and fewer providers accept the reimbursements, seniors can’t shop for the coverage that fits their personal health and financial situations), government price controls don’t allow for effective allocation of resources, Medicare rules don’t encourage innovation or reward efficient providers at the expense of inefficient ones. Finally, with a unfunded liability greater than Social Security’s, Medicare is not a sustainable program financially as currently constructed.

    Why stop at Medicare? Why not eliminate cash Social Security checks and instead send seniors an identical box of groceries each month, have them live in identical housing and drive an identical car? Why? Because seniors are very different in their tastes, their preferences and their spending patterns. So, why force them into a one-size-fits-all program that limits their choices, compromises their care and props up an inefficient health care delivery system? (Compare and contrast Medicare with another similar governmen program, the monopoly-protected US Postal Service vs. the innovaton, efficiency and customer service offered by UPS, FedEx and others.)

    Better idea: Give seniors a choice: Medicare or cash to spend on their own coverage. Price these alternatives so that seniors under either scenario pay the true (not taxpayer-subsidized) cost of services. That system is sustainable and offers the choices that I want when I retire.

    And by the way, there are a lot of excellent regional health plans – many of them not-for-profit operating on margins of 1% to 2% – that offer superior care, superior customer service and maximum choice for members of all ages. If seniors were suddenly given vouchers to pay for coverage, you’d see a private market respond with innovative products to help them manage their care and their costs.

  6. Dave Wayne says:

    The cost of care is influenced by many factors, however the primary drivers are the unhealthy lifestyles we lead (70% of medical spend) and our expectations of no expense spared care to save us from our poor choices. True managed care can affect the second as proven in the ‘80s, but we do not like being told no, so we killed HMOs. The only thing that will over time effect the lifestyle issue is making us pay for coverage based upon our modifiable health factors. That however flies in the face of the liberal mind set where nothing is ever the individuals fault. It’s not “fair” or “equitable”, both of which are but human mythological constructs that have no basis in nature or reality outside of religion. Until we as a society are willing to accept that the problem is us, and or we totally bankrupt the system, nothing any politician can do will make any meaningful difference. We have met the enemy, and he is us.

  7. David says:

    Government should only give Medicare to the people who contrubutes to the systems and limit lawsuits.

  8. David says:

    Government should only give Medicare to the people who contrubutes to the systems and limit lawsuits. This will save Medicare.