Republican Ryan backs new bipartisan Medicare Plan

WASHINGTON Thu Dec 15, 2011 4:38pm EST

Representative Paul Ryan (R-WI) speaks at the Faith & Freedom Conference and Strategy Briefing in Washington June 3, 2011.  REUTERS/Molly Riley

Representative Paul Ryan (R-WI) speaks at the Faith & Freedom Conference and Strategy Briefing in Washington June 3, 2011.

Credit: Reuters/Molly Riley

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WASHINGTON (Reuters) - Republican lawmaker Paul Ryan, who caused an uproar this year by proposing a plan to privatize Medicare, unveiled a new bipartisan approach on Thursday for cutting the cost of the government's $525 billion healthcare plan for the elderly.

The chairman of the House of Representatives Budget Committee joined Democratic Senator Ron Wyden of Oregon to unveil a plan that would retain Medicare's popular fee-for-service program but subject it to direct competition from private insurance plans.

Beginning in 2022, the Wyden-Ryan plan would provide financial support allowing seniors to opt for insurance plans sold through a new, regulated Medicare exchange intended to foster competition and reduce costs.

Analysts said the move amounted to a political ploy calculated to bolster the prominence of Medicare reform as a 2012 campaign issue and to lay the groundwork for possible bipartisan legislation in 2013.

"This is about trying to get out in front of this issue before it's just another high-decibel shouting match," Wyden said in an interview with Reuters.

"We're outlining a bipartisan approach that would give us a chance to have what might be characterized as an adult conversation about Medicare," added the senator, who said there are no current plans to offer legislation anytime soon.

Medicare, the second largest U.S. social insurance program after Social Security, serves 48 million beneficiaries.

Escalating healthcare costs and a swelling senior citizen population are expected to deplete the system's trust fund in 2024, posing a huge fiscal risk to a federal government already reeling from annual billion-dollar deficits.

Ryan faced fierce criticism from senior citizen groups early in 2011 with his initial plan to convert the entire Medicare program into a "premium support" system to help senior citizens buy private insurance.

Republican presidential candidate Newt Gingrich initially castigated the proposal as right-wing social engineering. Analysts said it undercut support for Republicans among senior citizens, a critical base of voters who had helped the party take control of the House from Democrats in 2010.

Signs of bipartisan support for a premium support plan that retained traditional Medicare emerged early in the fall, during the failed deficit-reduction deliberations of a congressional super committee. But winning over either party to a specific plan is far from guaranteed.

On Thursday, White House spokesman Jay Carney said President Barack Obama was interested in ways to fix Medicare that do not require "radical privatization or ending of the healthcare plan for seniors."

Republican reaction was mute. But analysts said the proposal could help Republican House candidates in 2012 by shifting political attention away from Ryan's earlier plan.

Senior citizens can already opt for private insurance coverage from insurers like UnitedHealth Group and Humana Inc through Medicare Advantage. The government-sponsored plans serve about 25 percent of Medicare beneficiaries.

Wyden believes that competition would drive private insurance costs lower than beneficiaries currently receive from Medicare Advantage.

Healthcare lobbyists who have been pushing for more Medicare privatization welcome the proposal, saying insurance competition should follow the model set by Medicare's Part D prescription drug program.

"This will be the year of educating people and laying the groundwork and developing proposals. After the election is when we'll see serious action," said Mary Grealy, president of the Healthcare Leadership Council, which represents healthcare company chief executives.

(Additional reporting by Caren Bohan; Editing by Michele Gershberg and Jackie Frank)

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Comments (15)
Sensibility wrote:
This is a really interesting development for several reasons.

First of all, it sounds like this is actually good legislation that can begin to transform the country’s biggest fiscal calamity into something that will not bankrupt us nor reduce quality care. What’s more is that Ryan’s bill is co-sponsored by a liberal Democrat. Maybe, just maybe, our elected officials in both parties can come together and do their jobs and enact positive change. I’m not holding my breath, but I’m hoping.

Second, it complicates the Republican nominating contest. Newt blasted the original Ryan plan as right-wing social engineering. Romney kept his distance but recently jumped on board with the old plan. Now there’s a new Ryan plan that more closely resembles Romney’s original ideas on the subject. It’s Newt’s move. He can jump on board and try to rationalize the flip flop, or he can double down on his (ironically) less conservative original stance (at least for now). Let’s see what happens.

Third, and most important, the Republicans are starting to look like the progressives, and the Democrats, especially the President are starting to look like the obstructionists. The President has repeatedly blasted all attempts to change Medicare, whether suggestions have come in the form of the original Ryan plan, his own Simpson-Bowles commission, the “super committee”, or anywhere else. Now there is a new Ryan plan, and a smart, liberal Democrat is co-sponsoring it.

It is my hope that Obama takes a look at this and realizes what’s right is right, and in this case (right) ACTION is also necessary. At the risk of the Democrats’ preferred narrative that the Republicans are the party of “No” going up in smoke just as the 2012 campaign ramps up, he may realize actually dealing with Medicare, rather than kicking the can down the road, is politically mandatory. Smart liberals are looking at solving problems, not just bashing Republicans. Though action is not Obama’s strong suit, maybe he will see that if he wants to carry the mantle of “smart liberal” into 2012, he should actually do something to enact the positive change he promised in 2008.

Dec 15, 2011 1:48pm EST  --  Report as abuse
Ned11 wrote:
Look at the truth by examining history: Competition in the private health insurance market has only increased costs. Private insurers need to continually increase profits for shareholders plus have about 15-20% greater overhead. Efficiently run nonprofit insurance with anti-fraud measures is the way to reduce costs. Medicare, even without reforms, is the most efficient insurance provider today.
Health care providers need to reduce costs by increasing efficiency, evidence-based medicine, eliminating prescription drug and lawyer tv advertising, and malpractice reform (so providers don’t need to over test and treat).

Dec 15, 2011 2:06pm EST  --  Report as abuse
dw1206 wrote:
This sounds good at first glance, although, if it regulates Insurance Companies and “allows” them to compete with Medicare (which already pays the least), I am not too sure the Insurance Companies would go for it. Obviously, more details would have to be put forth. At least they are working on it. Obama would welcome any good solutions to our Nation’s problems!

Dec 15, 2011 2:22pm EST  --  Report as abuse
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