House Republican budget to seek Medicare reforms

BALTIMORE Fri Jan 20, 2012 7:45pm EST

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BALTIMORE (Reuters) - Republicans in the House of Representatives will put forward a budget plan this year that will seek substantial reforms to health benefits for the elderly and make aggressive strides toward reducing deficits, a senior lawmaker said on Friday.

House Budget Committee Chairman Paul Ryan said he wanted his budget plan to offer voters an alternative vision to the "cradle-to-grave welfare state" that he says Democratic President Barack Obama is promoting.

The House Republican budget resolution will contain reforms to Medicare, the healthcare program for Americans 62 and over, such as providing subsidies to help recipients pay for private insurance, based on their wealth and medical needs.

"We haven't written it yet, but we're not backing off on the kinds of reforms we've advocated," Ryan told reporters at a retreat for House Republicans in Baltimore.

Ryan said there was emerging bipartisan support for such "premium support" plans as the best way to save Medicare, which he said was going broke.

The Wisconsin congressman caused an uproar last year by proposing a plan effectively to privatize Medicare by turning the popular $525 billion fee-for-service program into a system of vouchers to be used by recipients to buy private insurance.

The plan was enough to rattle elderly voters and was cited as a key factor in the defeat of a Republican candidate in a normally conservative New York state congressional district last year.

In December, Ryan and Democratic Senator Ron Wyden unveiled a new approach to cut Medicare costs through a "premium support" model that allowed seniors to buy insurance through a regulated exchange while retaining Medicare's traditional fee-for-service model. The plan was viewed by critics as a ploy to soften opposition to future reforms.

The Obama administration has steadfastly opposed reforms that would end Medicare for seniors or amount to what it calls "radical privatization" of the program

Representative Tom Price, who heads the House Republican Policy Committee, said there was a lot of enthusiasm at the Baltimore retreat to tackle fundamental reform of "automatic spending programs" such as Medicare and Social Security.

BUDGET RERFORM PLANS

Ryan said his budget plan would aggressively shrink deficits

to put U.S. debt on a downward path, adding the United States would be in a situation similar to some debt-stricken European countries in a few years if no action was taken. He did not specify an amount for planned cuts.

"We feel we have an obligation to show the country our plan to pre-empt a debt crisis in this country. What matters most as is that we get the trajectory right," he said.

Despite the controversy raised about the House's last budget plan, Ryan insisted that Americans be offered an alternative as a vision of what the Republicans would accomplish if elected.

"People want to be bolder on the budget. People feel good about our budget experience and the budget we passed, even the Northeasterners, the people from the tough seats, they feel we did the right thing on the budget and they want to keep doing it."

Ryan also said he hoped to reform the budgetary process, which he said was outdated and broken, noting the Senate had not passed a budget resolution in nearly three years.

The House Budget Committee is working on 10 bills to reform the annual budget process, including a provision that would force the two houses of Congress, along with the White House, to work on a joint budget resolution early in the year, for votes later in the year.

In the process in place since 1974, the House and Senate work on separate budget bills and then work out the differences later.

Ryan said the panel would begin to refine some of the proposals in coming weeks, but the process would be halted for the committee's work on the fiscal 2013 budget plan, which will be unveiled in March. The reforms will resume later in the year once the budget plan is passed, he said.

(Additional reporting by Richard Cowan; Editing by Peter Cooney)

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Comments (3)
neahkahnie wrote:
God forbid the elderly should get good medical treatment! This is sick!

Jan 20, 2012 7:56pm EST  --  Report as abuse
DennisByron wrote:
Among the many typical Reuters errors
– Medicare is for those Americans 65 or over, not 62 or over (and the disabled of any age)
– Medicare is not a $525 billion “fee for service” program; over 33% of the program — those parts of Medicare (C and D) that work the best — are already explicitly premium support
– the rest of the Medicare program is implicitly already premium support because 92% of those not on Part C get their real health care insurance from some policy other than “Medicare as we know it” (from private insurers offering Medigap policies or employer-retiree insurance or from Medicaid)
– the Wyden/Ryan plan does not retain the fee for service model in the sense Reuters implies; it is just going to offer the high deductible/co-pay, lifetime-limited, low-benefit “Medicare as we know it” as an option; almost no one depends on it now (less than 10%) and no one will buy it in the future

Jan 21, 2012 4:42pm EST  --  Report as abuse
Carly_EngAmer wrote:
Medicare as we know it is the nation’s biggest fiscal disaster. For years members of Congress and the executive branch have been trying, and failing, to find ways to restrain the growth of government health spending on seniors. As the single largest driver of long-term federal debt, the program is projected to increase in costs rapidly over the next few decades, with the twin drivers of a gradually aging population and rising health care costs that outstrip inflation and economic growth. Medicare is a $500 billion program on track to become a $1 trillion program before hitting estimated insolvency in 2024.

In attempting to address the problems of Medicare and medical expenses on the whole, members of Congress should look to the history of the program. The House Ways and Means Committee, when charged with assessing the costs of the program, projected that total costs for the first year would run no more than $1.3 billion when total spending in the first year actually was $4.6 billion. The committee did not improve its accuracy over time, projecting that hospital spending would amount to just $3.1 billion in 1970 when it was actually $7.1 billion. John Goodman, president of the National Center for Policy Analysis, explains that these chronic projection mistakes are because analysts failed to account for increased demand as 19 million people were given free access to unlimited health care. Today, Congress makes the same mistakes in different ways, failing to account for a dynamic market that undermines direct controls and ignores price-controlling efforts.

Jan 24, 2012 12:53pm EST  --  Report as abuse
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