Health Care Reform Update: Republican Voucher Plan for Medicare

Care Reform Update: Republican Voucher Plan for Medicare

imageby Alta Price, M.D.

During an interview with Katie Couric during the pre-game Super Bowl show, President Obama announced plans for a televised half-day summit to be held at the White House on February 25 to go through Democratic and Republican health care reform proposals. I sure hope it will be a replay of the Q & A session with the House Republicans!

To get ready for the summit, let’s examine a subset of health care, Medicare. I am sure Blog for Iowa readers are savvy enough to know that Republicans were opposed to the creation of Medicare back in 1965. In fact, the patron saint of the Republican Party, Ronald Reagan, recorded an LP (remember those?) for the American Medical Association in an effort to defeat Medicare. My favorite quote from the LP is his dire warning that if Medicare passes, “We are going to spend our sunset years telling our children and our children's children, what it once was like in America when men were free.”

And Republicans have been trying to kill (or privatize) Medicare ever since.

One way they have tried to kill Medicare is by ignoring the fact that Medicare will soon run out of money – the Medicare trust fund will be depleted in 2018. The Republicans tried to scare everyone into privatizing Social Security, even though it will be solvent for many years past the time Medicare goes broke. At the same time they ignored Medicare’s problems, or made them worse by passing the Medicare drug bill without paying for it. (Did you know the Medicare drug bill, passed under reconciliation and added to our national debt with no attempt to pay for it, costs as much over ten years as the current health care reform bills passed by the Democrats?) And of course the Medicare Advantage plans (which were part of the Medicare drug bill) were part of a Republican plan to privatize Medicare. Medicare Advantage plans cost the Medicare trust fund 14 % more per enrollee and are designed to attract only the healthiest seniors.

To deal with Medicare and bring down deficits, Republicans want to give seniors a voucher to purchase private insurance in the individual market. The government would no longer directly pay for health care services for Medicare recipients.

The most current and detailed Republican health care reform proposal is part of the “Roadmap for America's Future“. The chief architect of the plan is Representative Paul Ryan, ranking Republican member of the House Budget Committee. Jonathan Cohn, Senior Editor for The New Republic writes about the Roadmap in an article “Yes, let’s talk about those Republican ideas”:

The health care portions of the plan, though, really would reduce what the government spends on health care. And they would do so, primarily, by extracting money from Medicare. Instead of continuing to provide coverage directly, the government would issue vouchers that seniors could use to buy private insurance. The value of the vouchers would rise far more slowly than Medicare spending is expected to grow if nothing changes.

The bills passed by the Democrats in the Senate and the House also cut Medicare spending over time. But they don’t do it by giving seniors a voucher inadequate to pay for private insurance. From the article again:

This is a critical difference. If you simply reduce the money flowing into Medicare, relying only on the wits of beneficiaries to figure out how best to spend what’s left, seniors are bound to end up with less care. That's the Republican method. But if you also introduce system-wide changes that reward more efficient care and force down provider prices, the dollars in the program really might go farther–so that spending less doesn't always mean getting less. That's the Democratic approach.

And what about seniors with pre-existing conditions? There are no insurance reforms in the Roadmap, so insurers can charge the sick more or refuse to cover them. You’ll be happy to know that the Roadmap envisions state high-risk pools for the sick elderly. That way it will be up to each state to decide if they want the financial burden of providing health care for the sick elderly who used to be covered by Medicare or if they will just let them die.

I just stumbled across some great analysis of the Roadmap health care proposal by someone (Baseline Scenario) on a financial blog, of all places. I highly recommend both part one “The Republican Plan, I: People Will Die” and part two “The Republican Plan, II: You’re On Your Own”.

Price is a physician practicing Pathology in Davenport, Iowa. One of
the original Deaniacs, she stays involved with Democracy for America,
Iowa, and the Quad Cities. She advocates for quality, affordable health
care for all, primarily as a volunteer with Progressive Action for the
Common Good
(Health Care Reform Issue Forum).
  Watch for Dr. Price's Health Care Reform Update every Tuesday here on Blog for Iowa.  E-Mail Alta Price

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3 Responses to Health Care Reform Update: Republican Voucher Plan for Medicare

  1. Anonymous says:

    I find nothing in archived news, or the bill pages to show that Medicare part D was passed by reconciliation, can you support your view? It is not listed as being passed by reconciliation in the CRS report on the reconciliation process either which lists all bills that were passed by reconciliation durning that period.
    The Democrats had also introduced a prescription bill, it would have cost more from the medicare fund, not less. The bill that did pass ended up taking less then estimated, and has helped many, which is why really both parties wanted something done. The only question was how.
    Just to let you know, Jackson Healthcare recently released a survey on physicians, “Two times as many physicians interviewed most prefer H.R. 3400 vs.
    H.R. 3200 and the Baucus Bill combined (44% vs. 15% and 7%)”
    H.R. 3400 is not the Ryan bill, but it is the Republican bill from what I understand.
    Further, I see no problem with Ryan's roadmap. Medicare itself is not free for many. Does the roadmap need work? Yes, and some changes no doubt, but it still looks like a very workable plan that could lead to a better life for everyone.


  2. Anonymous says:

    Hi Anonymous. Thanks for taking time to comment.
    First, I think you may be right about the drug bill not passing under reconciliation. I have read that the Bush tax cuts and Medicare drug bill passed under reconciliation, but I think that may be true only for the tax cuts. I usually try to document everything myself, but failed to do so this time. I have to look into that and I will make a correction in my next HCR Update if necessary.
    I don't want to spend a lot of time on the drug bill. I know Democrats also voted for it, and may well have had other proposals. All I know is that doctors don't get to charge Medicare whatever they want for a service – they work under a fee schedule. The most fiscally responsible way to add a drug benefit to Medicare would have been to add the benefit to people's traditional plan, just like my insurance has a drug benefit. Then let the government use its power to negotiate reasonable prices with the drug companies. How do you think Canada and European countries get drugs for less? Their governments negotiate the prices. Compare the 900 billion over ten year price tag for the needlessly complex drug bill to what a simple drug benefit would have cost. And we aren't even considering how much extra Medicare recipients are paying out of pocket compared to a plan that eliminates the overhead involved in all the private insurers providing the drug benefit.
    I did not address the bill the House Republicans tried to pass last fall as my post was too long already. I would like to get to that in a future post. Like many Republican plans it would help the healthy and the wealthy, but the sick and poor not so much. It was scored by the CBO and would reduce the deficits less than the Democratic bill and not cover any additional people.
    As for what doctors think, I find they are pretty much in line with the rest of the public, although they favor a public option at a higher rate. It is certainly true that the AMA endorsed the bill the House Democrats passed. Since the AMA actually wants people too poor or too sick to afford private insurance to have access to health care, I guarantee they would not endorse the Republican House proposal.
    The Medicare voucher proposal is not just something that comes out of the roadmap. It is also in the bill Rep. Tom Price has sponsored for many years. I am pretty sure that in the Q & A session with the House Republicans Tom Price is the person who told Obama that the Republicans have ideas on HCR and Obama told him he had read his proposals. But I didn't have time to play through the video and find it.
    I couldn't disagree more with this voucher proposal for Medicare. I don't think I can do any better explaining why than I did in my post. The articles I link to at the end from the financial guy explain it even better.
    I think it is just a different world view. In surveys of Republicans only a minority are concerned about extending coverage to people without insurance. Their concerns are only with how much they are personally paying for their insurance. If you are sick or poor, too bad. I think Democrats either have more empathy or maybe they just know people who are sick or poor. But I would think even Republicans would realize that everyone on Medicare will eventually get sick, and at that point coverage would become unaffordable. Do you want to have to pay for your parent's health care? Do you realize some day you will be old and sick and need health care? I really don't get it.
    Thanks again, and I will check more into how the drug bill passed.
    Alta Price


  3. Anonymous says:

    The bills passed by the Democrats in the Senate and the House also cut Medicare spending over time. But they don’t do it by giving seniors a voucher inadequate to pay for private insurance.


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