President Obama releases ad hitting Mitt Romney, Paul Ryan on Medicare reform in Florida

As Mitt Romney campaigned in the Sunshine State Monday, President Obama’s reelection campaign launched a new Web ad starring Floridians who oppose the movement toward a more privatized Medicare system proposed by Romney’s new running mate, Wisconsin Representative Paul Ryan.

The man-on-the-street video features unidentified people who appear to be at or near the age of Medicare eligibility.

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“Health care, to me, is my number one priority, now that I’m going on 65,” an unidentified woman says in the ad.

The video represents the beginning of the Obama campaign’s attempt to use Ryan’s Medicare plan against the GOP ticket in the swing state of Florida, which, as one man notes in the ad, has “a very large elderly population.”

But today’s elderly voters would not be affected by Medicare reform, Ryan has argued, noting that proposed changes would not kick in until 2023—and then only for new Medicare enrollees.

Another woman in the ad criticizes Ryan’s Medicare proposal as “a voucher plan.”

Beginning in 2023, seniors who enroll in Medicare would choose between the existing, fee-for-service system and a new one in which they would use government-issued vouchers—officially called premium support payments—to purchase health insurance in a private Medicare marketplace.

Private insurers would be required to offer benefit packages that meet or exceed Medicare coverage levels and could not deny coverage to any senior, under Ryan’s plan.

In response to the new ad, the Romney campaign criticized Obama for financing much of his 2010 health care reform plan by reducing Medicare’s expected growth by an estimated $700 billion.

“To pay for Obamacare, President Obama cut $700 billion from Medicare for today’s seniors, which the Obama campaign described yesterday as an achievement,” Romney spokeswoman Amanda Henneberg said. “There’s only one candidate in this race who has cut Medicare for today’s seniors by hundreds of billions of dollars, and that’s President Obama. Mitt Romney and Paul Ryan have a bipartisan plan to strengthen Medicare and are committed to ensuring that Medicare remains strong—not just for today’s seniors, but for tomorrow’s seniors as well.”

Ryan’s budget plan, though it would repeal the national health care law, would retain the $700 billion reduction in Medicare spending. Romney has proposed repealing the health care law altogether.

In year one of the new Medicare program, according to Ryan’s plan, the value of the vouchers would be set by the health insurance market. Seniors would receive payments equal to the cost of the second least expensive plan in the private Medicare marketplace, or the cost of fee-for-service Medicare, whichever is less expensive.

Seniors who elect to purchase more expensive insurance plans would be responsible for the difference.

Ryan’s plan assumes most seniors would choose plans that their vouchers could cover in full, depriving more expensive insurers of business and motivating them to reduce their costs in efforts to attract customers.

The risk is that if private competition in the Medicare marketplace does not hold down insurance costs, government vouchers could cease to cover plan premiums over time.

After 2023, the vouchers are not guaranteed to match the cost of the second least expensive insurance plan in the private market. As a safeguard against unlimited government spending, the annual increase in voucher values is capped at the growth rate of the nation’s gross domestic product, plus 0.5 percent.

If health insurance costs grow faster than GDP, plus 0.5 percent, the Medicare vouchers would eventually be insufficient to pay for private plan premiums.