August 27, 2012
Fact Vs. Fiction About the House Republican Medicare Plan
Claim: The House-passed budget would force seniors to pay an extra $6,400 per year for their Medicare costs.
Truth: First, that analysis applied to the FY2012 House budget, not the FY2013 House budget. Second, it wasn’t true then, and it’s not true today.
Not true today:
- The FY2013 House budget improved upon last year’s budget, using a competitive-bidding process to determine the growth in premium support payments. Under competitive bidding, participating plans compete to deliver the same package of guaranteed benefits as traditional Medicare at a lower cost, and Medicare’s payment to seniors is set at the second-lowest bid or traditional fee-for-service, whichever is cheaper.
- Under competitive bidding, there is no risk that any senior will be unable to afford his or her guaranteed Medicare benefits. There will always be one plan that is fully covered by the premium-support payment.
- Like last year, lower-income seniors and those with greater health risks receive extra protection – fully funded savings accounts to offset out-of-pocket costs and risk-adjusted payments to cover greater health care needs.
- Premium support, competitive bidding, and more assistance for seniors with lower incomes or greater health needs will ensure guaranteed affordability for all seniors.
- CBO has said that they do “…not have the capability at this time to estimate…” the beneficiary effects for the Medicare reforms contained in the FY 2013 House Republican budget.
Not true then:
- That analysis, performed by the Congressional Budget Office (CBO), failed to account for what CBO’s director admitted was a “gap in [CBO’s] toolkit”: CBO cannot quantify the waiting lists and denied care that would hit seniors if the price controls and bureaucratic rationing in the President health care law take full effect.
- In other words, the impact of the FY2012 House budget was not measured against the diminished value and denied care that the President’s health care law ensures. Nor was it measured against the bankruptcy of Medicare that will occur in 12 years if Congress fails to act. It was measured against a fiscal fantasy.
- True choice and competition – providers competing against each other for patients’ business – is the only way to reduce costs and improve quality.
- Moreover, that analysis failed to include the extra $7,800 our plan provided to lower-income seniors to ensure that no senior is denied access to quality, affordable health coverage.
Claim: This plan is nothing but a voucher that will cause seniors to lose guaranteed Medicare coverage they can afford.
The Truth: No. The changes in the House Republican budget will not affect those in or near retirement in anyway. When younger workers become eligible for the Medicare program, they will be able to choose the kind of plan that best suits their needs from a list of Medicare plans, including traditional Medicare fee-for-service option, that are guaranteed to offer coverage to all beneficiaries regardless of pre-existing conditions. Medicare would then provide a payment to subsidize the cost of the plan. This is not a voucher – it is a payment that flows through to whatever plan recipients choose. The program would operate in a similar manner as the health insurance that Members of Congress receive and Medicare’s prescription drug benefit program, which are also not “vouchers.” Former Clinton Budget Director Alice Rivlin has made it clear that premium support would not be vouchers with the following statement in testimony before the House Ways and Means Committee: “premium support as we define it is definitely not a voucher.”