In Risky Election-Year Move, Republicans Offer Medicare Alternatives

Running a political risk during an election year, Republicans continue to offer proposals to cut future Medicare outlays.

The latest offering came on Thursday from a quartet of fiscally conservative Republican senators. The group proposed replacing the current open-ended, fee-for-service Medicare with enrollment of seniors in the Federal Employees Health Benefits Plan (FEHBP) which offers an array of privately-run health insurance plans.

Members of the group include Rand Paul of Kentucky, Jim DeMint and Lindsey Graham of South Carolina, and Mike Lee of Utah.

“This will be the new Medicare,” Paul said at a Capitol Hill news conference. “Medicare will be the federal employee health care plan.”

DeMint described the plan as “beginning to privatize” Medicare, an all too familiar description for Democrats who use similar terms to stigmatize GOP Medicare reform plans.

Medicare covers 50 million older and disabled Americans. The program’s spending will nearly double in the next ten years, continuing to grow at a rate faster than the nation’s income, according to the Congressional Budget Office.

Paul said the plan “means-tests the benefits and gradually allows the age of eligibility to go up.” The current Medicare eligibility age is 65; his plan would gradually raise it to 70 by 2034. “There is means-testing in this -- and the reason you have to do that is: we’re spending more on Medicare than is coming in.”

Paul said the proposal would reduce Medicare costs by $1 trillion over ten years, but he acknowledged that adding older Americans to FEHBP would drive up the cost of the plans offered by FEHBP. He said the plan would include a high-risk pool “for really sick people” that get an additional subsidy. Paul added “they also still will have Medicaid,” the federal-state insurance plan for low-income people.

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Democrats, DeMint said, “know that a dependent voter is a dependable vote.” The proposal he and the other GOP senators were offering is “basically kryptonite to a Democrat – because it gives people choices, it gives them freedom … .”

Paul thanked Sen. John Kerry, D-Mass., for letting the group “borrow” the idea. Paul said the plan was part of Kerry’s campaign platform in 2004.

In fact, Kerry in 2004 proposed to allow uninsured people, not seniors, to enroll in FEHBP.

“Entitlements are broken,” said Paul. “It’s not Republicans’ fault; it’s not Democrats fault. I tell people, ‘It’s your grandparents’ fault for having too many kids and then your fault for not having enough kids.’ It’s a demographic problem.”

Graham said he hopes to solve the problems with Medicare before the election this year.

“What I would tell the person near retirement is don’t fear change, embrace it, because you’ll have more doctors available to treat you and your family,” Graham said. “Think about not just what happens to you … think about where we’ll be as a nation if something doesn’t change pretty quickly with these big programs.”

The quartet’s proposal follows one offered two weeks ago by Sen. Richard Burr, R- N.C., and Sen. Tom Coburn, R-Okla., which would also raise the Medicare eligibility age (to 67, not 70) and subsidize seniors so they could purchase private insurance plans.

Meanwhile House Budget Committee chairman Paul Ryan, R- Wisc., has altered a plan he offered last year and reached across the aisle to partner with Democratic Sen. Ron Wyden of Oregon. The Ryan-Wyden plans would allow seniors to stay in traditional Medicare or choose a private insurance plan.

Ryan is scheduled to give speeches next week at two conservative think tanks in Washington and is likely to address Medicare.

But Paul said on Thursday that the Ryan-Wyden option wouldn’t save the federal government any money. ”If you give people the inertia of staying where they are versus moving, they may not move,” Paul said.

The Ryan-Wyden plan says that for people who are now age 54 or younger, "we propose to strengthen Medicare by transitioning the current program toward a coverage-support plan with the choice of guaranteed coverage options -- including traditional Medicare -- on a Medicare exchange."

But critics of the Ryan-Wyden plan argue that it would not really preserve traditional Medicare since it would create a marketplace where future retirees would need to purchase coverage of either traditional fee-for-service Medicare or another plan, and it would limit future program growth to the Gross Domestic Product growth rate plus 1 percent.

President Obama, too, acknowledges that Medicare needs to be redesigned and wants some of those getting Medicare to pay more for their coverage.

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In his Fiscal Year 2013 budget plan, Obama is calling for a variety of cost increases for people on Medicare, although perhaps it is no coincidence that Obama’s proposal would take effect only in 2017, after he would leave a second term in office.

Under Obama’s plan, in beginning in 2017, the Medicare premiums that higher-income people pay would increase by 15 percent. The higher premiums, co-pays and deductibles that Obama proposes would add up to about $33 billion over ten years.

That amount to only four-tenths of one percent of total Medicare outlays over the next ten years.

Nearly everyone in Washington agrees that the federal government can’t get control of its deficits and ever-increasing debt unless it curbs entitlement spending.

It was President Bill Clinton’s former budget director, Leon Panetta, now defense secretary, who chided the Senate Budget Committee a week ago: “You can’t meet the challenge that you’re facing in this country” by only cutting discretionary spending, the outlays on items like prisons and national parks, which is less than a third of spending.

“If you’re not dealing with the two-thirds that is entitlement spending, if you’re not dealing with revenues, and you keep going back to the same place, frankly you’re not going to make it, and you’re going to hurt this country’s security.”

But when leaders of either party do try to curb Medicare spending, the opposing side carpet-bombs them with TV ads playing on senior citizens’ fears.

In 2011, when Ryan offered his plan to raise the Medicare eligibility age to 67 and to do away with Medicare’s open-ended payments which cover almost all medical procedures, one Democratic group ran an ad showing a man -- presumably Ryan -- pushing a terrified elderly woman in a wheelchair off a cliff.

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  • by Anonymous on Mar 18, 2012 at 05:00 AM
    If you look back to the Reagan administration, you will see that the national debt was increased over 10 times in the amount when he took over. The second Bush administration increased it by over 12 times as much. They can’t tolerate another successful Democratic administration. They will do anything they possibly can to avoid this. Be true Americans who care for all of the people. Vote Democratic!
  • by Healthcare employee Location: NC on Mar 17, 2012 at 06:59 AM
    Get a grip people! Do you pay attention to your bills and see how much to government actually pays hospitals, doctors etc. for their services??? It is obsurd! It is getting to the point that no doctor will accept Medicare patients because the payments are so low. There needs to be options or you won't even be able to find a practioner who will take your lousy Medicare!! We need to do away with all govenment supported healthcre programs. Medicaid and Medicare both are what is putting our healthcare costs through the roof! Get out and work. Save money. Pay for your own insurance until you die. Do a flat sales tax,not income tax, and all layers of society will pay their fair share. End of story.
  • by Anonymous on Mar 17, 2012 at 05:31 AM
    What that looks like to me is the Republican'ts pan handling their latest Plan to destroy Medicare and Kick Seniors and the Disabled to the curb. In 2012 Vote Democrats Vote Obama, Save Grandma do it now!!!
  • by Here we go again..... on Mar 17, 2012 at 05:27 AM
    One day soon the vast majority of the American people will wake up and realize that the GOP doesn’t give a #$%^ about them. All Republicans do is plot ways to take from the American people and never give back, their nothing more than thieves in five thousand dollar suits. Why any sane person would vote for a Republican eludes me.
    • reply
      by Terry on Mar 17, 2012 at 07:09 AM in reply to Here we go again.....
      The real question is when will the vast majority of Americans realize that politicians, regardless of party, don't care about the hard working American citizens, the disabled nor the senior citizens. The currenet administration has not done anything to help us anymore than anyone else. Do you want more "Robin Hood" who takes from the working and gives to the sheep? Why any sane person doesn't understand that is beyond me. Let's face it, it is no longer who will help but who will do less damage. More damage was done under obama, lies told to appease the public and more Americans require assistance just to eat. This is NOT hope but was definately change ... for the worse. Obama must go!!
      • reply
        by Just Facts on Mar 17, 2012 at 10:57 AM in reply to Terry
        For eight years the BUSH administration did nothing about waste, fraud and abuse in Medicare. Spending for program integrity activities did not increase one dollar even though claims volume went up 300 million claims, a Part D program was added and there was an expansion in managed care. The system also allows any willing provider, meaning that if you meet the basic definition you can open a healthcare company. Every dollar spent on program integrity activities in medicare saves seven. A massive investment in program integrity activities would reap rewards in savings.
  • by Anonymous on Mar 17, 2012 at 05:20 AM
    Over the years, especially during the election season, Republicans did everything they could to derail health care reform. They fueled fears and misinformation, throwing around terms like "socialist," "fascist," "government takeover," and of course "death panels and the rest of the outright lies." If the GOPee and & teaparty wingnuts don't believe the federal government should play a role in that -- fine. But rather than voting to deny affordable care to millions of Americans and allowing insurance companies to discriminate against people on the basis of pre-existing conditions, The GOP should practice what they preach and start by canceling their own federal care, care that we pay for. Repeal proponents in the GOPee have long argued the wisdom and availability of private insurance. So they should have no trouble getting great private health coverage from the insurance companies they have been representing so well.
  • by Mad as Hello on Mar 17, 2012 at 04:17 AM
    First they destroy the country through their malfeasance of the 8 years of the Bush Administration debacle... the worst president in history. The GOPee the obstructionist party of NO is at it again if it’s not threatening to obstruct unemployment benefits for people out of work caused by their economic policies during the Bush debacle, it's their opposition to the Economic Recovery Act, or Health Insurance Reform, or Cash for Clunkers or the Credit Card Holders Bill of Rights than it’s their desire TO DESTROY Social Security and Medicare all the while giving their rich, corporate, puppet masters obscene tax breaks. If the GOPee gets its way there will be a rich 1% and the once middle class will look like refugees in a third world country.
  • by Buyer beware on Mar 17, 2012 at 04:12 AM
    Thanks, but no thanks. I don't want to put my health in the hands of pirate insurance companies. I know from personal experience how they work. My doctor ordered a test for my heart. My insurance company said no, stating that since I hadn't complained about chest pains, etc. they thought the test was unnecessary. What they were saying was that until I was having a heart attack, they wouldn't be paying a red cent. My doctor then hooked me up with a heart monitor because he said I had a rapid heart rate and they wanted to know why. After the test, my insurance company refused to pay for it. I've had this company for years and years, never using it except for yearly exams, etc. They want your money up until you get sick, then it's no, no, no. Sound familiar?
  • by JohnQ on Mar 17, 2012 at 04:04 AM
    I knew it - they want to get rid of Medicare! The GOP is the enemy of the people (especially Seniors!)Now, this is our opportunity to drive the GOP into the ground forever. There won't be ever a chance like this! I think they have just shot themselves in the foot.
  • by Barlow Location: Winterville on Mar 17, 2012 at 02:32 AM
    I think "means testing" is certainly a good idea and am glad the Republicans are proposing it if we have to have the insurance companies continue to be involved. But the idea of a high risk pool? This isn't about whether you can afford to drive a car or not, this is about whether you live or die. So, if you have a serious disease and you cannot afford the cost of the "high risk pool" you die? Maybe if their is some kind of help for the poor, but we can't go back to the "throw the really sick in the ditch" practices of the insurance companies that were going on before the Affordable Health Care for America Act was passed. What about pre-existing conditions? Do they go into the "high risk pool"? Lets make sure we go forwards, not backwards.
  • by Devil Dog Location: Greenville on Mar 17, 2012 at 01:16 AM
    Great Idea!!! I'm on Medicare, but have The federal employees health plan option. I suspended my coverage, when I retired from civil service, but could go back to it if I desire. The costs are about the same and doctors would take it in a heartbeat.
    • reply
      by Anonymous on Mar 17, 2012 at 04:07 AM in reply to Devil Dog
      The idea will likely be to "enroll" seniors and then give them a voucher for (part of) the "private insurance program" premium. In other words, it is a way to destroy Medicare and funnel taxpayer money to the profit-making (and, more importantly, bribing campaign contributing) insurance companies.

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