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Lawmakers Offer Bipartisan Plan to Overhaul Medicare

By ROBERT PEAR

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Washington, Dec 14, 2011 | comments

WASHINGTON — A Democratic senator, Ron Wyden of Oregon, and a Republican representative, Paul D. Ryan of Wisconsin, unveiled a bipartisan plan on Wednesday to revamp Medicare and make a fixed federal contribution to the cost of coverage for each beneficiary.

The lawmakers aim to reshape the debate over the giant health insurance program by addressing concerns that have provoked fierce opposition to similar ideas in the past.

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 would make major structural changes in Medicare and limit the government’s open-ended financial commitment to the program.

Under the proposal, known as premium support, Medicare would subsidize premiums charged by private insurers that care for beneficiaries under contract with the government.

Congress would establish an insurance exchange for Medicare beneficiaries. Private plans would compete with the traditional Medicare program and would have to provide at least the same benefits. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare.

In addition, the growth of Medicare would be capped; in general, spending would not be allowed to increase more than the growth of the economy, plus 1 percentage point — a much slower rate of increase than Medicare has historically experienced.

The proposal is sure to come under fire from beneficiaries and Democrats, who see themselves as the pre-eminent defenders of Medicare.

For his part, Mr. Wyden said: “Medicare is the most important fiber in the social safety net. I would never do anything to shred it, weaken it or harm it in any way.”

Unlike the Ryan budget blueprint approved by the House in April, Mr. Ryan said, the new proposal would preserve the traditional fee-for-service Medicare program as an option for all beneficiaries.

View online at The New York Times here.

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