President Obama spent his weekend touring Florida by bus, hammering Republican nominee Mitt Romney for a Medicare reform plan that he said would raise costs for current and future seniors.
To support his charge, Obama cited an August report by the liberal Center for American Progress that estimated future seniors would be forced to pay hundreds of thousands of dollars more over the course of their retirements under a voucher program Romney would introduce in 2023. Future seniors would use the vouchers, officially called premium support payments, to purchase private health insurance.
The study also challenged Romney’s assertion that current seniors would not be impacted at all.
Meanwhile, the Romney campaign insisted that the study’s findings are invalid because criticism by Harvard economist David Cutler and his two co-authors—all of whom played a role in drafting or implementing Obama’s national health care law—is based on a voucher cap that is not part of Romney’s proposal.
The dispute highlights the difficulty of accurately scoring Romney’s Medicare plan. The Center for American Progress made cost estimates based on the voucher limits outlined in a proposal by Wisconsin Representative Paul Ryan, Romney’s running mate, who recommended capping the annual increase in premium support payments at the growth of the nation’s gross domestic product, plus 0.5 percent.
“This growth rate is much slower than the projected growth in health care costs,” the study concluded. That means, the authors said, that as the rise in costs outstrips the increase in vouchers, seniors would be left picking up more of the cost.
Romney, while saying his Medicare plan is “close to identical” to Ryan’s, has not included the same cap in his own plan.
In a memo released one day after the Center for American Progress study, Romney’s policy director, Lanhee Chen, wrote that “Governor Romney has never proposed a cap on premium support growth that would leave seniors without the assistance they need to afford a plan with coverage at least as good as today’s Medicare.”
Yet Romney’s plan is not clear about how quickly premium support payments would grow, and it does not explicitly reject the idea of a cap. The frequently asked questions section of the Romney Medicare plan reports that “Mitt continues to work on refining the details of his plan, and he is exploring different options for ensuring that future seniors receive the premium support they need while also ensuring that competitive pressures encourage providers to improve quality and control cost.”
Romney makes no guarantee that vouchers will keep up with insurance costs but states that “his goal is for Medicare to offer every senior affordable options that provide coverage and service at least as good as what today’s seniors receive.”
If Romney were to adopt the premium support limit proposed by Ryan, the cost to seniors would eventually climb to astronomical levels, the Center for American Progress concluded. People who turn 65 and enroll in Medicare in 2023, the first year of the voucher program, would have to pay an additional $59,500, on average, over the course of their retirements.
By 2050, new Medicare enrollees—who would be 67 under new eligibility requirements—would face average cost hikes of $331,200.
The Center for American Progress made all estimates in 2012 dollars.
The study also concluded that Romney’s plan would, in fact, heap additional costs on current seniors because it includes a repeal of the 2010 health care law—presumably eliminating provisions like closure of the “doughnut hole” in prescription drug benefits, which would re-expose some seniors to higher out-of-pocket costs.
Romney said in an interview with NBC’s “Meet the Press” that aired Sunday that he would keep some elements of the health care reform law, though he did not mention the doughnut hole, specifically.