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From left, Sen. Lindsey Graham, R-S.C., Sen. Rand Paul, R-Ky., and Sen. Jim DeMint, R-S.C., Sen. Mike Lee, R-Utah, unveiled a Medicare reform plan in a news conference on Medicare reform on Capitol Hill March 15, 2012.
Updated at 5:23pm ET Running a political risk during an election year, Republicans continue to offer proposals to cut future Medicare outlays.
The latest offering came on Thursday from a quartet of fiscally conservative Republican senators. The group proposed replacing the current open-ended, fee-for-service Medicare with enrollment of seniors in the Federal Employees Health Benefits Plan (FEHBP) which offers an array of privately-run health insurance plans.
Members of the group include Rand Paul of Kentucky, Jim DeMint and Lindsey Graham of South Carolina, and Mike Lee of Utah.
“This will be the new Medicare,” Paul said at a Capitol Hill news conference. “Medicare will be the federal employee health care plan.”
DeMint described the plan as “beginning to privatize” Medicare, an all too familiar description for Democrats who use similar terms to stigmatize GOP Medicare reform plans.
Medicare covers 50 million older and disabled Americans. The program’s spending will nearly double in the next ten years, continuing to grow at a rate faster than the nation’s income, according to the Congressional Budget Office.
Paul said the plan “means-tests the benefits and gradually allows the age of eligibility to go up.” The current Medicare eligibility age is 65; his plan would gradually raise it to 70 by 2034. “There is means-testing in this -- and the reason you have to do that is: we’re spending more on Medicare than is coming in.”
Paul said the proposal would reduce Medicare costs by $1 trillion over ten years, but he acknowledged that adding older Americans to FEHBP would drive up the cost of the plans offered by FEHBP. He said the plan would include a high-risk pool “for really sick people” that get an additional subsidy. Paul added “they also still will have Medicaid,” the federal-state insurance plan for low-income people.
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Democrats, DeMint said, “know that a dependent voter is a dependable vote.” The proposal he and the other GOP senators were offering is “basically kryptonite to a Democrat – because it gives people choices, it gives them freedom … .”
Paul thanked Sen. John Kerry, D-Mass., for letting the group “borrow” the idea. Paul said the plan was part of Kerry’s campaign platform in 2004.
In fact, Kerry in 2004 proposed to allow uninsured people, not seniors, to enroll in FEHBP.
“Entitlements are broken,” said Paul. “It’s not Republicans’ fault; it’s not Democrats fault. I tell people, ‘It’s your grandparents’ fault for having too many kids and then your fault for not having enough kids.’ It’s a demographic problem.”
Graham said he hopes to solve the problems with Medicare before the election this year.
“What I would tell the person near retirement is don’t fear change, embrace it, because you’ll have more doctors available to treat you and your family,” Graham said. “Think about not just what happens to you … think about where we’ll be as a nation if something doesn’t change pretty quickly with these big programs.”
The quartet’s proposal follows one offered two weeks ago by Sen. Richard Burr, R- N.C., and Sen. Tom Coburn, R-Okla., which would also raise the Medicare eligibility age (to 67, not 70) and subsidize seniors so they could purchase private insurance plans.
Meanwhile House Budget Committee chairman Paul Ryan, R- Wisc., has altered a plan he offered last year and reached across the aisle to partner with Democratic Sen. Ron Wyden of Oregon. The Ryan-Wyden plans would allow seniors to stay in traditional Medicare or choose a private insurance plan.
Ryan is scheduled to give speeches next week at two conservative think tanks in Washington and is likely to address Medicare.
But Paul said on Thursday that the Ryan-Wyden option wouldn’t save the federal government any money. ”If you give people the inertia of staying where they are versus moving, they may not move,” Paul said.
The Ryan-Wyden plan says that for people who are now age 54 or younger, "we propose to strengthen Medicare by transitioning the current program toward a coverage-support plan with the choice of guaranteed coverage options -- including traditional Medicare -- on a Medicare exchange."
But critics of the Ryan-Wyden plan argue that it would not really preserve traditional Medicare since it would create a marketplace where future retirees would need to purchase coverage of either traditional fee-for-service Medicare or another plan, and it would limit future program growth to the Gross Domestic Product growth rate plus 1 percent.
President Obama, too, acknowledges that Medicare needs to be redesigned and wants some of those getting Medicare to pay more for their coverage.
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In his Fiscal Year 2013 budget plan, Obama is calling for a variety of cost increases for people on Medicare, although perhaps it is no coincidence that Obama’s proposal would take effect only in 2017, after he would leave a second term in office.
Under Obama’s plan, in beginning in 2017, the Medicare premiums that higher-income people pay would increase by 15 percent. The higher premiums, co-pays and deductibles that Obama proposes would add up to about $33 billion over ten years.
That amount to only four-tenths of one percent of total Medicare outlays over the next ten years.
Nearly everyone in Washington agrees that the federal government can’t get control of its deficits and ever-increasing debt unless it curbs entitlement spending.
It was President Bill Clinton’s former budget director, Leon Panetta, now defense secretary, who chided the Senate Budget Committee a week ago: “You can’t meet the challenge that you’re facing in this country” by only cutting discretionary spending, the outlays on items like prisons and national parks, which is less than a third of spending.
“If you’re not dealing with the two-thirds that is entitlement spending, if you’re not dealing with revenues, and you keep going back to the same place, frankly you’re not going to make it, and you’re going to hurt this country’s security.”
But when leaders of either party do try to curb Medicare spending, the opposing side carpet-bombs them with TV ads playing on senior citizens’ fears.
In 2011, when Ryan offered his plan to raise the Medicare eligibility age to 67 and to do away with Medicare’s open-ended payments which cover almost all medical procedures, one Democratic group ran an ad showing a man -- presumably Ryan -- pushing a terrified elderly woman in a wheelchair off a cliff.
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Here is a great article regarding the trouble the Republican nominee will have in November.
The best way to "fix" Medicare is to transition it to a more sustainable and rational market-based, premium support system. When the current SGR patch expires later this year, Congress should use the opening to secure immediate structural reforms that move toward premium support, including raising the retirement age, increasing the premiums for Parts B and D, adding a premium to Part A and tightening the income thresholds. Making Medicare sustainable for the long term is the key to reforming the program. The only permanent solution for the SGR is to end it and adopt a Medicare premium support model that is free from government price controls on doctors and hospitals ().
It would also help if the healthcare plan didn't remove 682 billion dollars from the plan to use to cover other people
Ok congress get rid of your own health insurance plan which you don't pay for. Then quit making these insurance companies rich with your policies another words do your job for the people not for yourselves and corporations.
Congress is not entitled to a better health insurance plan and definitely not a free one while the rest of us pay one way or another.
I hope the whole country goes broke so there is no medicare or social security. Damn people, when social security was enacted the average life span was just a little over 65, now it is in the high seventies. The system needs revised. You should not be able to get full social security until at least age 70 and for those below age 50 a new system needs to be explored.
I suggest you study the great depression and what caused it.
There was no FDIC in 1929, there was no banking regulations, no social security.
If you deposited money in the bank, the bank could gamble it and lose your entire life savings. Then you would be pennyless and you have zero ability to get your money back. Zero. If retired, you would have to go to work again and making enough to live on at age 65 isn't easy to do.
Social Security was created so there wasn't this mass of elderly people, pennyless, homeless, and dying on the streets in the 1930s [and that's what was happening]. The Federal Deposit Insurance Com was created to establish trust in the banks. Before the FDIC and after the Stock Market Crash of 1929, no one put their money in the bank for fear of losing it. Banks had no money and no one was willing to risk putting it in the bank for fear the damn bankers would lose it. Rightfully so as the bankers lost their depositors money.
The only one's that made money were the Astors, Carnegie, Rockefeller, Duponts, J.P. Morgan, Vanderbuilts, Schwab, Mellon, Cooke and they are the one's that stole everyone's money buy running up the market to get everyone to invest, then sell their stocks off, taking profits, leaving everyone to hold worthless paper.
You want no Social Security? maybe go with a 401k retirement plan invested in the stock market? Well that's the same thing as in 1929. Your 401k isn't deposited in a bank. It's with an investment firm. They invest it in the stock market and that money can lose it's value even below the amount you put in.
Medicare is fee for service payments. The more services medical care providers provide, the fees they collect. The more services they provide the more it costs. Where's the controls on cost growth when medical car providers make more and more money the more services they provide?
I'm real sorry my knees didn't agree with you. When going up stairs, climbing ladders and just plain standing became painful and I was old enough I retired of course I could have filed for disability instead and gotten $100 a month more and medicare right away instead of waiting. Did you want me to do that instead?
Touch no breathe in the direction of my Social Security and or my Medicare and as far as I am concerned there will never be a vote for anyone with an R next to their name as long as I live.
You would rather vote for the party that wants to take 682 billion dollars from medicare? Thats your democratic buddies. They also want to cut reimbursments to providers who are already refusing new patients on medicare because the reimbursments are below cost. I'm going to get medicare this fall but I'm not sure I'll be able to find a doctor to accept me unless I drive to the clinic in the next city. Ray study the plans a little. 62% of primary care physicians say if the plan goes into effect they will have to close to new medicare patients. One doctor here already took money from his savings to make his payroll because the reimbursments didn't match his expenditures.
The Affordable Care Act does reduce Medicare spending by $500 billion over the next 10 years. But here’s the catch: Those dollars aren’t taken out of the current budget, they are not actual cuts, and nowhere does the bill actually eliminate any current benefits.
The $500 billion is all in future spending reductions and come through the law’s attempts to slow projected growth, not cut spending.
PolitiFact National has highlighted the biggest bits of savings: About $220 billion comes from reducing annual increases in Medicare payments to health care providers. Another $36 billion comes from increasing premiums for higher-income beneficiaries. Administrative changes land another $12 billion in savings. A new national board is set to come up with $15.5 billion in savings -- but can’t get those savings from a reduction in benefits. The last big chunk of $136 billion comes in changes to the Medicare Advantage program, which has become more expensive than initially anticipated.
http://www.politifact.com/oregon/statements/2011/nov/14/rob-cornilles/another-look-favorite-republican-talking-point/
I call these 4 specimens the 4 stooges,
privitize medicare and soc.security, my ass! The public option has a lot more trust. Who would trust the G.od awfull O.ld P.uke Party. The only thing they really want is to wipe out the Middle class. Started by their Hero Ronnie Retard Reagan. Green cards for all His cronies's nannies, pool attendents ,and landscapers,etc. Which might have worked good if they kept track of them, however that was way to intrusive, and here We are, after Mr. trickle down His leg(inconstinence), and He was mentally challenged before He was out of office!
Watch c-span tomorrow this comes up for a vote in the House listen to the arguements not the media.
We are a youth oriented society and always have been. I don't mind raising the benefits for social security to 70 if anyone over 65 can easily get a job. In terms of choices I would like to offer these senators some choices. Perhaps if they were voted out of office they could find another way to make a living without living off the public (particularly since they resent government funding so much). I feel the same way about Romney. If he is such a guru at making money and creating jobs it would be foolish to put him in the White House when he is obviously much more valuable in the private sector.
Woodall of Ga put this headline copied from the msnbc web page up today in his introduction of the bill and pointed to it and said I didn't come here to be reelected I came here to serve my people. I don't think voting him out scares him. Anyway I doubt you vote in his district anyway.
So liberals don`t like to give people choices? The conservatives are bent on taking coices away from women. Does that mean conservatives don`t regard women as people? I do hope the ladies remember that come November.
Just think of how much can be saved if those wonderful people on the hill and our other fabulous leaders take the same healthcare options they are trying to force down our throats.
Actually that is the option Woodall wants to give to people in their forties the same federal insurance plan choicces he has. While maintaining medicare as is for the people over forty. Why don't you actually read the plan?
Paul Ryan's budget gets rid of:
Medicare as it exist now
Medicaid coverage for the elderly and disabled
Healthcare coverage for 30 million Americans
Paul Ryan's budget plan cuts:
food stamps
housing assistance
farm subsidies
federal workers
science programs
education services
prisons
border control
student loans
FEMA
unemployment insurance
IRS
FBI
Paul Ryan's budge provides:
Corporation and the Wealthy
3 trillion dollars in TAX CUTS
Obama's got my vote again in November
Hell, even some of my Republican friends will be voting for him. It's either Obama or one of the clowns running in the Republican primary.
Yes, I have Republican friends. What I notice is that even the most rabid of them have lost their stridency. They are embarrassed when a jerk like Santorum can get political traction from the party or when a scumbag like Gingrich carries a state like Georgia. There's no explanation for it other than the decent, honest, smart Republicans don't want to get involved because they KNOW Obama will win in a landslide. THAT leaves the field open for all the clowns we've seen jumping into the primary race to sell books or get their name out there so they can write one.
Vote for Obama again and medicare will cut costs by cutting reimbusements to doctors. If that happens a survey taken says 62% of primary care physicians will quit taking new medicare patients. So you will be covered if you can find a doctor to treat you. 31% say they will quit medicine good luck for the rest of you too. But you follow the lie. Don't actually do any research of your own just keep the faith baby.
The Affordable Care Act will save approximately $500 billion over the next ten years through reduction in extra subsidies paid to Medicare Advantage plans, reductions in the rate of growth in provider payments, and efforts to make the Medicare program more efficient and to reduce waste, fraud and abuse. These reductions will lead to corresponding savings for beneficiaries through lower copayments and premiums. A slower rate of growth in Medicare is expected to result in a slower rate of growth in beneficiary out-of-pocket payments, and a slower rate of growth in Part B premiums. In addition, the closing of the donut hole will result in large savings for beneficiaries with high levels of prescription drug spending.
http://www.healthcare.gov/law/resources/reports/affordablecareact.html
Check out your facts, SS will last, as is unitl 2037, that is 25 years. I and my late husband paid the max in SS our whole working lives, he did not live to collect neither did my dad. Privatize SS is the idea of wall street traders, they want our money. They give big bucks to the GOP just as the ins companies are giving big bucks to get in on the Medicare dollars. Vouchers instead of Medicare - don't make me laugh our ins costs would more than double. I now pay over $350 a month for health ins this includes my medicare prems. pluse supplement ins., the prescription drug plan and extra for dental ins. - and I am healthy with no major diseases. Just imagine wat it would cost someone if the were elderly and ill. Of course we could do what our republican friends suggest - get sick and die.
Ding ding ding, those in power in the GOP care only about the wealthiest one percent. They don't want to save social security. They don't want to protect medicare. The middle class, the disabled, college students, can all go to hell as far as the GOP leadership is concerned. There are a few exceptions to that rule, the senators from Maine and one of them is retiring this year.
Just because Romney says it, doesn't make him a Lincoln. The spirit of Abraham Lincoln, has been replaced by the spirit of Jefferson Davis in the highest levels of the GOP. Time for my party to die a hallowed death rather then sell its soul to the powers of darkness.