The Republican budget will include changes to Medicare, but House Budget Committee chairman Paul Ryan (R-Wis.) promises in two videos that previewed the proposal and discussed program reform that no changes would be made that would affect those in or near retirement.
In one video, Ryan paints the GOP’s version of today’s economic landscape and how it could progress under the continued leadership of President Obama, saying that this “doesn’t have to be our future.”
“We’ve shared with Americans a specific plan of action that cuts spending, pays off the debt and gets our economy back on the path to prosperity,” he says. “Real, specific reform is needed to strength the health and retirement security of seniors and the economic security of all americans.”
Under the president’s health care law, according to Ryan, Medicare goes bankrupt. “We’ve exposed how his law takes control away from current seniors, and gives that power to a board of 15 unelected bureaucrats. Our plan includes no changes for those in or near retirement,” he says. “Instead of government bureaucrats, it puts patients in control of their health care decisions.”
Health Care Spending to Rise; Current Medicare Model Unsustainable
Last year, Rep. Ryan released a plan for Medicaid and Medicare reform that was widely decried in Democratic circles as it would have ended the current Medicare program for new participants starting in 2022, in favor of subsidies to purchase private insurance.
This year, Medicare reform is back on the table—but this time, the Republican representative has collaborated with Democratic senator Ron Wyden (D-Ore.) in his reform efforts.
“Washington has not been honest with you about Medicare,” he says in the second video. “It’s headed for a painful collapse. We can save it, but we have to reform it so it delivers the high quality we expect, at a price we can afford.”
In the video, Ryan recites data that the average American family spends nearly fifty times more on health care than in 1960, and that health care spending has gone from consuming just 5% of the economy, to 17.6%.
“A lot needs fixing in health care, and Medicare is a top driver of these unsustainable costs,” he says. And if no action is taken, he continues, Medicare spending is projected to nearing double in the next decade, exhausting the rest of its funds.
The current system is to blame, says Ryan. Right now, about 35 million people have a fee-for-service insurance plan through Medicare. Under this model, people go to the doctor or hospital, doctors and hospitals charge Medicare their fees for services provided, and these fees are paid for by taxpayers.
However, the true cost of services rendered are hidden because “someone else pays the actual bill,” says Ryan. This current model has no competition, he says, so it reimburses all doctors and hospitals the same, even if quality of care is poor.
This gives doctors and hospitals little incentive to deliver the best care at the lowest price, and many experts agree that this leads to the rising costs of health care, he says.
A “Better” Approach to Medicare?
A solution to this problem is where the Democrats and Republicans differ. President Obama’s plan is to have a panel of fifteen “unelected, unaccountable bureaucrats” to decide how much Medicare will pay doctors.
Laid out in the “Path to Prosperity” proposal, Ryan says his “better” approach “saves Medicare for current seniors, and strengthens it for future generations.”
While there will be no changes for those who are already aged 55 or older, for current taxpayers, there needs to be real reform, he says. “Rather than putting the government in charge, our plan provides financial support for future Medicare [recipients] to pay for a plan that works the best for them.”
The plan would give seniors a choice between opting for traditional Medicare, or getting government subsidies to purchase private insurance. The approach includes gradually raising the eligibility age to 67 by 2034.
In his model, doctors and hospitals will be competing for patients’ business, which will lower costs. Additionally, lower-income seniors will receive greater support, while wealthy seniors will receive less, according to Ryan.
Medicaid Turned Into Block Grants for States
The budget blueprint would constrain “Medicaid’s growing cost trajectory by $810 billion over ten years” by giving states Medicaid funding in the form of a federal block grant, reports Kaiser Health News.
View the House Budget Committee’s 2013 Budget Resolution, or the Medicare reform video below.
Written by Alyssa Gerace