August 6, 2011

August 6, 2011
Saving Medicare

Welcome to another day in my life. Today is Saturday and I hope your weekend is off to a safe and great start. It is another busy weekend for Dab the AIDS Bear and me.

I know you have heard about what is happening in Washington, DC with our elected officials raising the debt limit and the cuts they are looking to make. But what will the cost be to senior citizens and those on disability.

If you are someone like me with a chronic illness and disability, the changes they are proposing could be life threatening. Especially considering the proposed changes to Medicare and Medicaid without even mentioning Social Security.

The chant reflected the fact that Hochul had campaigned strongly against the Republicans' controversial plan to overhaul Medicare. Her come-from-behind triumph in May was thus widely seen not only as a rejection of that plan, even among many Republican voters, but also as an indicator that the new battle over Medicare will be a defining issue of the 2012 elections.

"We will keep the promise made to our seniors who have spent their lives paying into Medicare, so they can count on health care when they need it most," declared Hochul, 52, at her victory celebration.

Democratic strategists immediately began planning to campaign against the GOP Medicare plan in nearly 100 competitive House districts in 2012, even dreaming of sending House Budget Committee Chairman Paul Ryan, its author, back home to Janesville, Wis.

The Ryan plan

Ryan's plan passed by the Republican-controlled House as part of its budget proposals but rejected in the Senate aims to terminate government-run Medicare for everyone who becomes eligible for the program after 2021, replacing it with a voucher plan known as "premium support." That system would provide new beneficiaries with a government subsidy to buy their own private insurance on the open market.

Both parties already are jockeying to frame the issue in ways their strategists hope will appeal to voters in the 2012 elections. Democrats paint the Ryan plan as "ending Medicare as we know it" and switching more costs to older and disabled Americans. Republicans portray it as a necessary means to curb government spending and reduce the national debt. In the current deficit debate, the GOP message so far has presented a stark choice either end Medicare as an entitlement program or drive the country into bankruptcy.

But beyond the political rhetoric, health policy experts say that while it's true that Medicare spending needs to be reined in, this can be achieved by less radical solutions. They also point to political ironies inherent in the Ryan plan. It relies on setting up health insurance exchanges in the states and providing extra subsidies for low-income beneficiaries both of which are features of the Affordable Care Act, the new health care law the Republicans want to repeal.

The Ryan plan is not a viable option," says Alice Rivlin, an expert on fiscal policy who was the first director of the Congressional Budget Office and recently a member of the president's debt commission. But, she adds: "The first thing to recognize is that we do have a problem. The status quo is not an option for very long."

The latest Medicare trustees' report predicted that the hospital insurance trust fund where workers' Medicare payroll taxes end up will start running out of money in 2024. Over the next 18 years the retiring boomer generation will double the number of Medicare enrollees. And unless costs are curbed, the program will eat up an ever-increasing chunk of the national budget.

Ryan's plan is "severe" because he's "trying to solve the whole deficit problem with spending cuts alone," Rivlin says. But "a good bipartisan plan will have some combination of market forces and regulation, spending cuts and revenue increases." John Rother, AARP executive vice president for policy, agrees that "no one strategy is going to be sufficient."

What Is the Ryan Plan?

Converts Medicare to a voucher plan (or "premium support" system) in 2022. New beneficiaries would choose a private health insurance plan from a government-run insurance exchange and receive a government subsidy paid directly to the insurance company toward the premium's cost. The first subsidies would be based on estimates for average Medicare spending on each beneficiary in 2022, adjusted for health status, age and income.

Reduces government health care costs over time by pegging the increases in the subsidy paid to each enrollee to the annual rate of inflation, which is much lower than the current rate of medical inflation.

Raises health care costs for Medicare enrollees substantially over time because they would pay the difference out of pocket between the subsidy and the actual cost of the insurance premium.

Continues traditional Medicare for people 55-plus and those with disabilities covered by Medicare before 2022 but with reduced benefits compared to current law. Lets them switch to the new voucher plan in 2022.

So what do you think? Drop me a line and let me know. Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab