In a leaked party platform circulating on the eve of their
convention, Republicans reveal in candid detail how they intend to upend
Medicare.
The platform, snagged by Politico
on Friday afternoon after the Republican National Committee
accidentally posted it to its website before taking it down, is
scheduled to be approved at the convention early this week.
The text details the privatization policy that GOP lawmakers have
supported for years, and that Mitt Romney and Paul Ryan are selling as
necessary to “save” Medicare. But in an unusual twist, it addresses the
specific aspect of the proposal that makes it a departure from what
Americans know as “Medicare.”
“The first step is to move the two programs [Medicare and
Medicaid] away from their current unsustainable defined-benefit
entitlement model to a fiscally sound defined-contribution model,” the
draft platform reads. “While retaining the option of traditional
Medicare in competition with private plans, we call for a transition to a
premium-support model for Medicare, with an income-adjusted
contribution toward a health plan of the enrollee’s choice. This model
will include private health insurance plans that provide catastrophic
protection, to ensure the continuation of doctor-patient relationships.”
The esoteric language gets to the heart of the change that ends the
basic structure of Medicare. Since its inception in 1965, Medicare has
been a government-run insurance program that directly pays medical bills
for the elderly per their needs (i.e. “defined benefit”). Republicans
want to turn it into a partially privatized system that pays seniors a
fixed amount to buy their own health insurance (i.e. “defined
contribution”).
“Under the defined contribution approach envisaged by the Rivlin-Ryan
plan [a proposal that’s remarkably similar to Romney’s], most of the
risk of future health-care cost increases would be shifted onto the
shoulders of Medicare beneficiaries,” Uwe Reinhardt, a health policy
expert at Princeton University, said last year. “This feature makes the proposal radical.”
The nonpartisan Congressional Budget Office has found that the plan
will raise seniors’ out-of-pocket medical expenses by thousands of
dollars, a fact Democrats hasten to point out. The draft Republican
platform claims that the competition among private insurance plans will
lead to major cost savings, though little evidence exists to support
this argument.
Unlike the first Ryan budget unveiled in 2011, the Romney-Ryan plan
seeks to mitigate some of the potential adverse effects of privatization
by including the option for seniors to buy into a government-run plan
with their voucher. Under the Romney-Ryan plan, the value of the
voucher, as long as it doesn’t exceed a certain level, adjusts to cover
the cost of the second-cheapest policy on a competitive insurance
exchange.
By contrast, President Obama wants to preserve Medicare’s defined
benefit structure by introducing efficiencies into the program and by
setting up an independent panel of Senate-confirmed experts to cut
reimbursement rates to providers if per-beneficiary expenses exceed
per-capita GDP plus 0.5 percent — a budget cap that Ryan also
establishes in his blueprint.
Echoing a Romney campaign plank, the Republican platform also
champions an increase in the eligibility age — currently 65 — for those
who aren’t about to retire.
“Without disadvantaging retirees or those nearing retirement,” it
reads, “the age of eligibility for Medicare must be made more realistic
in terms of today’s longer life span.”
RNC spokespersons didn’t immediately respond to queries about whether
the Medicare language would be altered before final approval.
Update 2:30 P.M. ET: An RNC official tells TPM the platform
will face a vote Tuesday afternoon but declines to reveal any new
information about the Medicare plank.
“[T]he final platform will be voted on tomorrow at 2 p.m. by the full
RNC convention,” the official said in an email. “Unfortunately we
aren’t making the platform language public until it is voted on by the
delegates but it will go out tomorrow.”
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