Ryan, Wyden Introduce Bipartisan Proposal for Medicare Subsidies
On Thursday, House Budget Committee Chair Paul Ryan (R-Wis.) and Sen. Ron Wyden (D-Ore.) unveiled a proposal that would give Medicare beneficiaries "premium support" to purchase traditional Medicare coverage or a private health plan, the New York Times reports.
Details of Proposal
Under the plan, Medicare beneficiaries would receive a subsidy to purchase coverage through an insurance exchange where private plans would compete with traditional fee-for-service Medicare. The subsidy in each region would be set by the cost of the second least costly option, regardless of whether that was a private plan or the fee-for-service plan (Pear, New York Times, 12/14).
According to National Journal, the plan would provide more protection for beneficiaries but potentially less budget savings than a previous Medicare reform plan by Ryan.
The amount of the subsidy would vary based on the cost of the health plan (National Journal, 12/14) Lower-income beneficiaries would receive a full subsidy, while higher-income beneficiaries would receive less. The proposal would not apply to beneficiaries currently enrolled in the program and would take effect in 2022 (Radnofsky/Weisman, Wall Street Journal, 12/15).
Ryan and Wyden said they will not draft legislation for the plan. "There's no point in drafting legislation if you know it's not going to pass," Ryan said. He added that because of more pressing legislative issues, like the payroll tax cut extension, he does not expect any major action on Medicare until a new Congress is seated in 2013. In an interview on Tuesday, Ryan and Wyden said they hope their proposal can help overcome the contentious political climate of late. Ryan said, "We want to demonstrate that there is an emerging consensus developing on how to preserve Medicare," adding, "We want to move that consensus forward."
Ryan and Wyden said that the measure could drive cost down lower than current price controls by forcing private insurers to bid to provide coverage and encouraging beneficiaries to chose the lowest cost plan, the Washington Post reports (Montgomery, Washington Post, 12/14).
The proposal also would cap Medicare growth and prohibit spending from increasing by more than the growth of the economy plus one percentage point. Congress could cut payments to providers and suppliers who overspend or increase premiums for high-income beneficiaries to stay within the limit (New York Times, 12/14).
Ryan Moves Away From Controversial Plan
The Ryan-Wyden plan marks a departure from a controversial Medicare reform proposal Ryan introduced in the spring, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 12/14).
Ryan's original plan -- which would alter Medicare from a fee-for-service program to one that would have beneficiaries purchase coverage on the private market -- was included in the House-approved GOP FY 2012 budget resolution (H Con Res 34). The plan was widely criticized by Democrats, elderly voters and even prominent Republicans (California Healthline, 5/17).
Ryan and Wyden's "unusual alliance" could lead to complications for both parties in the 2012 presidential elections, according to the Post (Washington Post, 12/14).
The GOP gained many House seats in 2010 with a campaign message that the federal health reform law would damage Medicare. Democrats have hoped to retake the House by arguing that Ryan and other House Republicans are pushing to eliminate traditional Medicare, which could increase costs for beneficiaries (New York Times, 12/14).
During debt panel discussions, members of both parties stood behind "premium support" within Medicare, which could lead to major structural changes to the program, according to lawmakers and health policy experts. Some experts say that even though the panel failed to reach a deficit-reduction deal, the group's work could frame the Medicare debate during next year's elections and beyond.
Republicans traditionally have supported premium support. GOP presidential candidates Newt Gingrich and Mitt Romney have endorsed variations of premium support in Medicare.
Meanwhile, some Democrats on the debt panel said that a premium support plan could work if it included enough protections for Medicare beneficiaries (California Healthline, 12/28).
Ryan, Wyden Push for Proposal in Opinion Piece
In a Wall Street Journal opinion piece, Ryan and Wyden write that members of both parties "are guilty of exploiting Medicare to frighten and entice voters." However, they write that their plan outlines how "Democrats and Republicans can work together to ensure that American retirees -- now and forever -- have quality, affordable health insurance."
The pair argue that their proposal would give beneficiaries more options and force private insurers "to develop better delivery models and design better ways to care for patients with chronic illnesses" to keep their costs lower than traditional Medicare.
Ryan and Wyden write that they "are under no illusions that [the reforms] will pass tomorrow" but their plan is "proof that Democrats and Republicans don't have to spend next year making Medicare reform more difficult" (Ryan/Wyden, Wall Street Journal, 12/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.