Paul Ryan Convinces Ron Wyden To Support Greater Privatization Of Medicare

Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-OR) will unveil a new Medicare premium support plan during an event at the Bipartisan Policy Center this morning that is a stark departure from the Budet Committee Chairman’s proposal to end the traditional Medicare program that most Republicans voted for.
Under the new bipartisan plan, beginning in 2022, seniors will receive a pre-determined premium support voucher to purchase benefits through an exchange of private plans or the existing fee-for-service program. The government subsidy would be determined by the “second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive” and “rise or fall along with the actual cost of the policies — creating more protection for seniors and saving potentially far less in the budget.” Ryan’s budget grows the government’s contribution substantially slower than actual health care costs, shifting health care costs to beneficiaries. The plan maintains the Affordable Care Act’s cap on spending at Gross Domestic Product growth plus 1 percent and would also “add catastrophic coverage with a cap on out-of-pocket costs.”

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But the larger problem is that competition between traditional Medicare and private plans — which, the plan says “would foster innovation and quality, while ensuring that the program is financially stable” — could also allow private plans to cherry-pick the healthiest beneficiaries and leave sicker applicants to traditional Medicare. Although the Wyden/Ryan incorporates “risk- adjustment tools” and would require CMS to “conduct an annual risk review audit of all insurance plans,” these mechanisms are still “less than fully effective in adjusting payments downward based on how much healthier these enrollees are” and private plans participating in Medicare Advantage continue to, on average, enroll healthier beneficiaries.

So here, in a nutshell, is the problem: In an interview with the Washington Post, “Ryan and Wyden acknowledged that their plan might not bring in more savings than under the current law.” Yet they’re willing to set the nation on an untested path of private competition that breaks up the large market clout of Medicare (which is now experimenting with more efficient ways to pay providers) and pushes seniors into less efficient private plans. It moves the health care system closer to the Ryan ideal in which future Congresses would be able to reduce federal costs by eating away at the premium credit seniors receive. Over time, Medicare will start bleeding beneficiaries, becoming an ever smaller program.