THE BLOG
09/05/2012 03:48 pm ET | Updated Nov 05, 2012

This Is Not Your Mother's Medicare: Part 1

It takes The Villages to raise many misconceptions regarding Medicare to national attention. It takes the Republican Party Convention to make them central to the national discussion.

Paul Ryan, the Republican vice presidential nominee, visited The Villages, a senior retirement community in Florida, on August 18 with his 78-year-old mother by his side. Jon Busdeker of the Orlando Sentinel opened his article on the visit by reporting that Ryan went there "to make a point about Medicare." Busdeker later stated that during the visit "Ryan said his mother Betty Douglas has depended on the government program for more than 10 years. It was promised to her and millions of today's seniors and it won't go away for now."

Ryan's decision to visit to The Villages to make his Medicare announcement was a strategic one. As Damian Paletta pointed out in his August 17 Wall Street Journal blog, there were two reasons for selecting The Villages: (1) More residents there receive Social Security benefits than anywhere else in the U.S. (2) "The area has been a prime stop for Republicans... Former Alaska Gov. Sarah Palin stopped by in 2009 for a book signing, and Mr. Romney was there earlier this year..."

According to Busdeker of the Sentinel, during his Villages visit, after saying that Medicare needs change and reform, Ryan proclaimed, "We want this debate. We need this debate. We will win this debate." Vice Presidential candidate Ryan repeated these same words in his August 29 speech at the Republican Convention and asserted that, "A Romney-Ryan administration will protect and strengthen Medicare for my mom's generation, for my generation and for my kids and yours."

We agree with Paul Ryan that we need a debate to determine how Medicare can be improved most effectively. What we do not need, however, is much of what passes for debate these days -- diatribes, finger-pointing, name-calling, ad hominem attacks, and systematic presentations of dis- or misinformation. What we do need are debates that are serious, substantive, factual, data-based, and problem-solving.

These types of debate will allow us as informed citizens to evaluate and determine which of the respective plans, or combination thereof, does the best job of protecting and strengthening Medicare for the current and future generations. We must be candid in stating our opinion that the Ryan "voucher" plan as it now stands -- it is a moving target -- does neither.

Paul Ryan's proposed plan (Ryan Plan, Romney-Ryan Plan or Plan) for a radical reform of Medicare is at the heart of this debate. Without going into the details, the essence of the "latest" Plan, as described by Marilyn Werber Serafini in her August 13 column for the Kaiser Health News includes: gradually raising eligibility age from 65 to 67 by 2034; capping spending increase at half a percentage higher than the growth rate of the economy, or the GDP; and, changing the program for future beneficiaries under the age of 55, so that they get a set amount of money annually to purchase either a private health plan or the traditional government program. As Ms. Serafini notes, "That is a fundamental shift from today's program, where the federal government must help pay for every doctor's visit and medical services that an individual uses."

Ms. Serafini goes on to comment that the nonpartisan

"Congressional Budget Office estimated that Ryan's original proposal for 2012 would require a typical 65 year old person to pay a lot more for Medicare by 2030. His latest plan is missing key details, however, so the CBO has been limited in its analysis of the impact."

The liberal Center for American Progress (Center) released a report on August 24 that stated that, based upon its analysis using data from the CBO and other government agencies and parameters from academic research studies, "the Romney-Ryan Plan would be financially debilitating for all seniors." The report indicates that a senior who is currently 65 would pay an additional $11,100 during their retirement if Obamacare is repealed and the Ryan Plan goes into effect. According to the Center, someone who is 54 today would pay an additional $124,600. Someone who is 29 would pay an additional $331,200.

There is a third problem with the Ryan Plan. As Ezra Klein notes in his August 14 Washington Post blog, the Plan would keep in place a $716 billion expense reduction that is part of Obamacare. This is the same $716 billion Medicare budget "cut" that vice presidential candidate Ryan decried during his convention speech commenting as follows, "An obligation we have to our parents is being sacrificed, all to pay for a new entitlement we didn't ask for."

There is one difference as Klein points out: "What Romney/Ryan are saying that they then take the money saved and put it toward deficit reduction in while Obama takes the money and spends it on health care for poor people." Jared Bernstein asserts in his August 14 On the Economy blog that these cuts "are largely used to lower taxes on the most affluent." Finally, we would also note as Sarah Kliff does in her August 14 Washington Post blog:

"... there's one area these cuts don't touch: Medicare benefits. The Affordable Care Act rolls back payment rates for hospitals and insurers. It does not, however, change the basket of benefits that patients have access to."

We would ask based upon these facts who is making the sacrifice for whom and for what? We would further ask whatever happened to truth in packaging?

It seems to us that there is little to no question that if the Ryan Plan were adapted it would mean dramatic changes to the way Medicare is delivered and would apparently have substantial negative cost and coverage consequences for many beneficiaries. There would still be a promise. But, it would be dramatically different than the promise that was made to Paul Ryan's mother. The promise was once a safety net for all. Now it is high wires for us to walk on individually without harnesses.

(We will provide additional and important insights on why this Plan could be so devastating in Part 2 of this post.)

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