* Republican Medicare reforms would face daunting challenge

* Analysts see reality of legislation years in the future

By David Morgan

WASHINGTON, Sept 10 (Reuters) - Republican presidential candidate Mitt Romney wants to turn Medicare into a voucher system and President Barack Obama hopes that fact alone will help him win votes among senior citizens and baby boomers.

But health policy experts, including two analysts who first floated the idea of Medicare vouchers 17 years ago, say no such plan is likely to become legislation - let alone law - until after the next presidential election in 2016.

That is because the mere notion of fundamentally revamping the $590 billion-a-year healthcare program, which serves 50 million elderly and disabled Americans, raises a multitude of policy issues that no politician or policymaker has addressed publicly.

Medicare voucher plans call for converting the popular safety-net program from one that offers healthcare benefits to a system that provides a fixed amount of money that beneficiaries can use to purchase coverage from a menu of private insurance plans.

"Could we enact legislation in the next year or so and implement it two or three years from now? My simple answer to that question is 'no,'" said Robert Reischauer, a former director of the nonpartisan Congressional Budget Office, which reviews legislation with budgetary implications.

That may come as news to voters, particularly in battleground states like Florida, Ohio and Iowa, where the Medicare reform plan adopted by Republicans, including Romney and running mate Paul Ryan, is a main target for Democrats who say it would "end Medicare as we know it."

Reischauer and Henry Aaron of the Brookings Institution proposed a voucher or "premium support" mechanism for Medicare in a 1995 article in the journal Health Affairs widely seen as the first suggestion of such a reform.

On Monday, they spoke at a Washington conference hosted by America's Health Insurance Plans, an industry trade group. The two men agreed that the Republican plan and others like it that have been floated by independent groups in recent years were not "ready for prime time."

"I don't think any of the premium support plans on the table now has gone an inch beyond the specifications that we laid out back then. And I will tell you, we did not design legislation," Aaron said.

No experts in either the public or private sectors of the $2.8 trillion U.S. healthcare system have said in detail how a voucher system might work. The task require better insurance risk-adjustment mechanisms than are available now, as well as a deeper understanding of geographic variations in medical costs.


"There are a zillion specific issues. And there's plenty of research, a lot of it unsatisfactory. There's a lot of practical experience, most of it unsatisfactory," said Joseph Antos of the conservative American Enterprise Institute, who appeared with Reischauer and Aaron.

"You can't do this in the next three years," he added. "Maybe in the next five."

Ryan, who chairs the House of Representatives Budget Committee, has proposed a version of a voucher plan that includes traditional Medicare as an option for future retirees and caps annual per- capita Medicare spending at 0.5 percent above the rate of U.S. economic growth.

Romney has proposed a similar plan, which appears on his campaign website. Republicans largely adopted the Ryan plan as part of the party platform at their national convention last month in Tampa, Florida.

Critics say Ryan's main objective is to limit Medicare's ability to widen the federal deficit by shifting costs to seniors and the disabled. He says the plan would strengthen Medicare for generations to come.

Reischauer and Aaron warned it was not clear the strategy would contain costs, saying political pressure could mount on Congress to do away with spending caps, while private insurers could have difficulty fielding plans that cost less than traditional Medicare.

They said the best route could be to combine a voucher mechanism with reforms being implemented under Obama's Patient Protection and Affordable Care Act, be tter known to voters as "Obamacare," which Republicans have vowed to repeal if they win control of the White House and U.S. Senate in the Nov. 6 election.

The law, which comes fully into effect in 2014, is supposed to move Medicare away from its current fee-for-service format that offers healthcare providers incentives to drive costs up.

It also calls for state insurance exchanges that would offer consumers federally subsidized private coverage.

Reischauer said the exchanges would provide vital lessons for any future voucher system for Medicare.

Copyright 2012 Thomson Reuters. Click for Restrictions.

Also on HuffPost:

Loading Slideshow...
  • Wealthy Benefit Most From Tax Cuts

    Paul Ryan's most recent budget proposal would save those making between $20,000 and $30,000 just $246 in taxes, compared to savings of $265,011 for those who make over $1 million, according to analysis from the <a href="http://www.washingtonpost.com/business/economy/2012/04/02/gIQAjn0grS_graphic.html" target="_hplink">Center on Budget and Policy Priorities</a>.

  • Health Care Cuts

    The "Path to Prosperity" would cut $2.4 trillion from Medicaid and other health care programs for people with low or moderate incomes, according to analysis from the <a href="http://www.washingtonpost.com/business/economy/2012/04/02/gIQAjn0grS_graphic.html" target="_hplink">Center on Budget and Policy Priorities</a>.

  • Fewer People Covered By Medicaid

    Under Ryan's "Path to Prosperity" as many as 44 million fewer people would be covered under Medicaid, <a href="http://www.cbsnews.com/video/watch/?id=7417870n" target="_hplink">according to CBS News</a>.

  • Reduced Health Care For Retirees

    Ryan would raise the age of Medicare eligibility from 65 to 67. If the Affordable Care Act was repealed, something Romney has pledged, that means many 65- and 66-year-olds would be left uninsured, the <a href="http://mediamatters.org/research/2012/08/11/seven-things-the-media-needs-to-know-about-paul/189277" target="_hplink">CBPP reports</a>.

  • Seniors Would Pay More For Health Coverage

    Under Ryan's "Path to Prosperity," senior citizens would have to pay as much as 68 percent of their health care coverage, up from 25 percent today, <a href="http://www.cbsnews.com/video/watch/?id=7417870n" target="_hplink">CBS News reports.</a>

  • Cuts To Food Stamp Programs

    Ryan's proposed "Path to Prosperity" includes $134 billion in cuts to SNAP, according to analysis from the <a href="http://www.washingtonpost.com/business/economy/2012/04/02/gIQAjn0grS_graphic.html" target="_hplink">Center on Budget and Policy Priorities</a>.

  • Lower Tax Credit For Single Moms

    A single mother of two working full time at the minimum wage would have her Child Tax Credit cut by more than $1,500, assuming she made $14,500 a year, according to the <a href="http://mediamatters.org/research/2012/08/11/seven-things-the-media-needs-to-know-about-paul/189277" target="_hplink">Center on Budget and Policy Priorities</a>.

  • Less Money For Education

    Compared to the most recent White House budget proposal, Ryan's budget spends 33 percent less on education, training, employment and social services, <a href="http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/12/what-paul-ryans-budget-actually-cuts-and-by-how-much/" target="_hplink">the <em>Washington Post</em> reports</a>.

  • Poor Weather Forecasts

    Ryan's proposed cuts to environment and natural resource programs could result in weather forecasts being only half as accurate, according to Third Way's budget expert, David Kendall. "For many people planning a weekend outdoors, they may have to wait until Thursday for a forecast as accurate as one they now get on Monday," <a href="http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/12/what-paul-ryans-budget-actually-cuts-and-by-how-much/" target="_hplink">he's quoted as saying in the <em>Washington Post</em></a>.

  • No Raises For Government Workers

    The current government worker pay freeze would be extended under the "Path to Prosperity," meaning public-sector employees wouldn't get a raise until at least 2015, <a href="http://www.washingtonpost.com/blogs/federal-eye/post/paul-ryans-budget-plan-hits-federal-workers/2012/08/11/8953b832-e3a3-11e1-98e7-89d659f9c106_blog.html" target="_hplink">the <em>Washington Post</em> reports</a>.