May 25, 2011 / 9:07 PM / 6 years ago

Republicans stick to plan to privatize Medicare

<p>Vice President Joe Biden hosts a meeting with congressional Republicans and Democrats at Blair House, May 5, 2011.Jason Reed</p>

WASHINGTON (Reuters) - Republicans on Wednesday, with few exceptions, stuck by their plan to privatize the Medicare health program for the elderly -- despite a rebuke in the Senate and a New York special election.

Paul Ryan, Republican chairman of the House of Representatives Budget Committee and chief architect of the plan, said sweeping changes are needed in Medicare to protect it from financial ruin.

"We can no longer let politicians in Washington deny the danger to Medicare -- the danger is all too real -- and the health of our nation's seniors is far too important," Ryan said in an Internet video.

Democrats on Tuesday won a vacant House seat upstate New York, a traditional Republican stronghold, by turning the special election into a referendum on the plan pushed by Ryan to privatize Medicare.

The Republican proposal suffered another setback on Wednesday when the Senate blocked the measure on a vote of 57-40, making it clear it will not become law anytime soon.

Five Republicans joined the Democrats in opposing it. They were Scott Brown of Massachusetts and Olympia Snowe of Maine, both moderates up for re-election next year; moderate Susan Collins, also of Maine; Lisa Murkowski, an Alaska moderate; and Rand Paul of Kentucky, a favorite of the conservative Tea Party movement.

Regardless, other Republicans ratcheted up efforts to build support for the plan, certain to be an issue in next year's congressional and presidential elections.

The proposal would end traditional fee-for-service Medicare and create a voucher-like system for future retirees to buy medical coverage from private insurers.

"We aren't going to abandon this," a senior Republican aide said. "We want to save Medicare, while Democrats would let it die. Those must be the first words out of our mouths from now on -- 'We want to save Medicare.'"

"Not all Senate Republicans agree with the Ryan plan, but they all agree that something must be done to save Medicare," the aide said.

WORK AHEAD FOR REPUBLICANS

Republicans acknowledge they will need to make a better public case for their plan and make changes to build support among voters and within the party. Supporters argue it is the only way to save Medicare due to rising healthcare costs and an aging "baby boom" generation, born between 1946 and 1964.

Healthcare has long been a volatile and high-stakes issue in Washington since it touches all Americans and involves trillions of dollars and a crush of special interests.

Democrats argue that President Barack Obama's healthcare overhaul, enacted last year, will save Medicare billions of dollars in wasteful spending while improving care quality.

Democrats hope to ride public backlash against the proposal into 2012 presidential and congressional elections -- just as Republicans capitalized on Obama's unpopular healthcare overhaul in last year's election.

Jennifer Duffy of the Cook Political Report, a nonpartisan publication that tracks congressional races, said it was "dangerous to read too much" into the New York election."

But "Republicans would be foolish to ignore the result," she said. "Medicare is a potent issue that they need to pay attention to. If Republicans don't tweak or abandon the Ryan plan, they need to communicate it better."

Dan Ripp of Bradley Woods, a private firm that tracks Congress for institutional investors, said Republicans were standing firm because "enough of them understand that the system is broken and they see this as the best alternative."

It remains unclear whether the eventual 2012 Republican presidential nominee will embrace the Ryan proposal. One candidate, former House Speaker Newt Gingrich, recently called it radical but then, under fire, backed off his criticism.

Another, former Minnesota Governor Tim Pawlenty, said on Wednesday said he would put forward his own Medicare plan.

Editing by Ross Colvin and Bill Trott

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