IT MAY GENERATE APPLAUSE, BUT IT ISN’T TRUE…. As has been well documented, the House Republican budget plan intends to do away with the existing Medicare system and replace it with a privatized voucher plan. One of the more common GOP defenses is that seniors will now have “the same kind of coverage members of Congress give themselves.”
It sounds vaguely populist, and tends to generate applause, at least in front of conservative audiences. Sure, Republicans intend to end guaranteed benefits and scrap an effective system, but how bad could it be? Members of Congress have it easy, and now the elderly will too, right?
It’s important to realize that the talking point, touted by Paul Ryan among others, just isn’t true. Glenn Kessler has a good piece on this.
In many ways, the federal plan works a lot like the run-of-the-mill employee-sponsored health insurance plan. The bulk of the costs are picked up by the employer — in this case, the government — with the employee contributing his or her share according to a set or negotiated rate. Under a 1997 law, the government pays a set rate of 75 percent of the costs of the health plans selected by federal employees and members of Congress. The employee (and members of Congress) pick up the other 25 percent.
Ryan, in his quote, said the new Medicare would be “working like a system just like members of Congress and federal employees have.” But the comparison begins to break down once you consider the premium support payments. Ryan would peg the premium support to the consumer price index, a broad gauge that has been rising more slowly than have health care costs.
The Congressional Budget Office, the nonpartisan arm of Congress, analyzed Ryan’s plan and estimated that by 2030, the government would pay just 32 percent of the health care costs, less than half of what the federal plan currently pays. The other 68 percent of the plan would have to be shouldered by the retiree. (The CBO estimated that if traditional Medicare stayed in place, the government would pay 70 to 75 percent of the costs.)
The CBO analysis also assumed that adding private insurance plans into the mix would raise administrative costs and would not keep medical inflation as low as traditional Medicare has done.
Remember, Ryan assured voters, “We’re saying save Medicare by reforming it for people who are 54 and below by working it like a system just like members of Congress and employees have.”
This is plainly false. Republicans aren’t “saving” Medicare; they aim to replace it. And the new system clearly wouldn’t be “just like” the federal plan at all.
Kevin Drum also had a good piece on this the other day, explaining that Ryan is “just flatly lying,” and adding that “that lots of seniors just flatly wouldn’t be able to afford to buy Medicare” if the GOP plan were approved. “They wouldn’t have enough money to pay their share of the premium, and that means they’d be uninsured and uncovered.”
To equate this policy with the plan available to members of Congress is ludicrous.