Clipboard: The “Ryden” Medicare proposal

Democratic Senator Ron Wyden’s decision to join Republican Representative Paul Ryan in introducing a plan to overhaul Medicare is the subject of debate today over both what the plan would mean for the federal program that provides health insurance for the elderly and disabled and the implications for election-year politics. The plan is comparable to one Mitt Romney proposed recently.

The plan would have private insurers compete against Medicare, and the federal government would set a subsidy for each enrollee based on the cost of the second-least expensive plan in the market or fee-for-service Medicare, whichever is cheaper.

Sophie Quinton and Margot Sanger-Katz write in the National Journal that Ryan and Wyden want to cap Medicare spending:

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They promised that efforts to rein in spending would neither result in “bureaucratic cuts” nor in raising premiums for beneficiaries. Rather, Congress would “reduce payments to providers, drug companies or others who may be responsible for escalating costs.”

But Marilyn Werber Serafini and Mary Agnes Carey of Kaiser Health News note that enrollees could see their premiums go up:

Under the proposal, if Medicare spending rises beyond a certain level, and Congress does not intercede, seniors would pay more...

Seniors who chose more expensive plans would pay more out-of-pocket for coverage, and those who picked plans that cost less than the benchmark amount would get a rebate. Private plans would be required to provide at least the same level of benefits as traditional Medicare. The proposal, which isn’t expected to gain any traction on Capitol Hill in the midst of a heavy campaign season, would cap how much seniors would pay out of pocket for their care – traditional Medicare doesn’t have that now.

Robert Pear of the New York Times writes:

Just as important as the details of their proposal was the fact that the two were working together on an issue that both parties have exploited for political advantage.

In 2010, many Republicans won House seats — and the support of older voters — by arguing that President Obama’s health care law would damage Medicare. Democrats are hoping to retake the House by arguing that Mr. Ryan and other House Republicans are pushing for the privatization of Medicare, which they say could greatly increase costs for beneficiaries.

The new Wyden-Ryan proposal, by blurring the contrast between the parties on this issue, could make it more difficult for Democrats to win the argument.

Ezra Klein of the Washington Post’s Wonkblog, dubbing it the “Ryden plan,” said the proposal is a “vindication of the Affordable Care Act” because it works in a similar way, creating a competitive market and tying the government subsidy to a lower cost plan. Klein writes:

There are ultimately two ways of looking at health-care politics right now. One is that the two parties actually agree on quite a lot. Partisan politics often obscures that, but the fact of the matter is that Republicans want a competitive-bidding process with a public option in Medicare and Democrats want one for the under-65 set. Wyden is an example of this kind of politician. The other is that there is no policy consensus, and these are just tactical battles in which Republicans want choice reforms in order to break down the Medicare program but will never accept that sort of universal structure on the under-65 market. Democrats look at Ryan’s positions and see him more in this camp.

If the center of American politics is where Wyden is, then it’s possible that the two parties will be able to hammer out a deal. If it’s where Ryan is, they won’t.

Also see the full proposal posted by Kaiser Health News and the lawmakers’ own explanation of the proposal in this Wall Street Journal commentary.