August 11, 2012

Given today’s events, House GOP Members should expect renewed interest in the provisions and policies contained in the GOP’s Path to Prosperity Budget for Fiscal Year 2013. The following are materials on the Medicare provisions in the GOP Budget, including top-line messaging, sample charges and responses, and potential constituent questions and answers. For a comparison between the president’s approach and the House GOP approach when it comes to the future of Medicare, please click here. 

 

The Path to Prosperity’s Plan to Save and Strengthen Medicare

 

• The future of the nation’s health and retirement security programs is increasingly based on empty promises from a government unwilling to advance solutions that save and strengthen them.

• The president’s health care law raids more than $700 billion from Medicare and his budget condemns Medicare to a bankrupt future. 

• This budget strengthens health and retirement security by taking power away from government bureaucrats and empowering patients with control over their care.

• This budget repeals the new health care law’s unaccountable board of bureaucrats empowered to cut Medicare in ways that would jeopardize seniors’ access to care.

• This budget saves Medicare for current and future generations, with no disruptions for those in and near retirement.

• For younger workers, when they become eligible, Medicare will provide a premium-support payment and a list of guaranteed coverage options – including a traditional fee-for-service option – from which recipients can choose a plan that best suits their needs.

• Program growth would be determined by a competitive-bidding process – with choice and competition forcing providers to reduce costs and improve quality for seniors.

• Premium support, competitive bidding, and more assistance for those with lower incomes or greater health care needs will ensure guaranteed affordability for all seniors. 

 

Potential Charges and Responses

 

Charge:  The House approved budget ends “Medicare as we know it.”

Response:  The Path to Prosperity Budget saves Medicare from bankruptcy for current and future generations and would make no changes to the system for those in and near retirement. Politifact called the Democrat claim that “Republicans voted to end Medicare” the “Lie of the year” in 2011, yet the president and Democrats continue to make this blatantly false assertion. It is the president’s health care law which ended Medicare as we know it, raiding Medicare by $700 billion, empowering 15 unelected bureaucrats to make decisions that will deny care to millions of seniors, and leaving the program bankrupt for the next generation. According to the Centers for Medicare & Medicaid Services, Medicare will be bankrupt by 2024, and other estimates have calculated that the program could be out of money by 2016. The president’s plan to raid money from Medicare will hasten the program’s collapse. Slashing reimbursements will force doctors to stop seeing Medicare patients. Bureaucratic rationing will lead to seniors being denied treatments and forced onto waiting lists for the care they need and deserve.  The most radical change to Medicare occurs only if we follow the president’s course and do nothing. If no changes are made to the program, Medicare as we know it will cease to exist.

The House-passed budget has the only plan which saves and strengthens Medicare. The bipartisan plan ensures no changes for those in or near retirement, and offers guaranteed coverage options, including a traditional Medicare option, for Americans who in the Medicare program. The plan is designed to provide less help for the wealthy and more for the poor and the sick. These gradual, patient-centered reforms avert the looming collapse of Medicare’s finances, protect current seniors from any disruption, and guarantee affordability for generations to come.

 

Charge:  The House approved budget replaces the Medicare guarantee of coverage.

Response: The House-passed budget guarantees coverage and protects all seniors, regardless of health history, from being denied the care they need and deserve. While the president’s law raids and rations Medicare, thereby shifting costs to seniors and taxpayers, the bipartisan reforms in the House-passed budget actually control costs and guarantee coverage and affordability. For those 54 and older, the Medicare system would not change. When younger workers become eligible for Medicare a decade or more from today, they will be able to choose from a list of guaranteed coverage options, including a traditional Medicare fee-for-service plan. The Medicare program would be saved by providing future retirees with the ability to choose from a menu of government-supported plans, similar to the way that current Members of Congress and federal employees do, or simply keep the same Medicare coverage system that is offered now. For those retiring after 2022, the plan would allow them to choose their Medicare provider who would receive payments directly from the Medicare program. Under the Path to Prosperity, a Medicare payment would go to the plan provider (premium support payment) as opposed to the payment going directly to the individual (voucher). In the premium support model, individuals would be covered through Medicare-approved plans which offer a guaranteed level of coverage.

 

Charge:  The House approved budget shifts costs to seniors.

Response: While the president’s law raids and rations Medicare, thereby itself shifting costs to seniors and taxpayers, the bipartisan reforms in the House-passed budget actually control costs and guarantee affordability. The bipartisan plan ensures no changes for those in or near retirement, and offers guaranteed coverage options, including a traditional Medicare option, for future retirees. This plan would allow individuals to choose a plan that best fits them, or continue to receive traditional Medicare services. The House-passed budget guarantees coverage and protects all seniors, regardless of health history, from being denied the care they need and deserve. Under this plan, individuals could choose a more expensive coverage option and use their own resources to supplement the additional costs, but the current amount of health coverage would be guaranteed for seniors with no added costs. Seniors would not have to pay out of pocket to get the same level of coverage they have today. This plan would introduce competition in the Medicare market to bend the health care cost curve and allow every retiree after 2022 to choose a plan tailored for them and paid for through Medicare.  This will bring down the costs of health care, rather than rationing and deny access for seniors.  True choice and competition will guarantee lower costs and better quality. Gradual, patient-centered reforms avert the looming collapse of Medicare’s finances, protect current seniors from any disruption, and guarantee affordability for generations to come. If no action is taken—as the president’s budget advocated—seniors will be forced to bear the cost of less access when Medicare runs out of money in the next decade.

 

Charge:  The House approved budget gives vouchers to seniors to go find a plan on their own.

Response:  Vouchers play no role in the House-passed bipartisan plan to save and strengthen Medicare.  Seniors would not receive a voucher and would not “go shopping” for a plan.  To the contrary, future retirees would receive a list of Medicare-approved guaranteed coverage options offered on a regulated Medicare exchange, including a traditional Medicare option, and would select a plan which best meets his/her needs.  Medicare already relies on regulated exchanges and private provider choices. Today, seniors have the freedom to choose from a list of private Medicare Advantage (MA) plans to help cover their medical expenses. The MA plans compete for a patient’s business on a regulated Medicare exchange; a patient chooses from a list of Medicare-approved options and Medicare helps pay.  As well, seniors have the freedom to choose from a list of private Medicare Part D prescription drug plans which compete for a patient’s business on a regulated Medicare exchange; a patient chooses from a list of Medicare-approved options and Medicare helps pay.  The House-passed bipartisan plan to save and strengthen Medicare would operate in very much the same way.

 

Potential Constituent Questions and Answers

 

Q: I am currently receiving or will be receiving some time in the next ten years health coverage through Medicare. Will I see my benefits change?

A: No. The Path to Prosperity includes no changes for those 55 and older. This budget protects and preserves this critical program for those in or near retirement. By contrast, the President’s health care law creates a board of 15 unaccountable bureaucrats empowered to cut Medicare in ways that result in denied care for current seniors. The House Republican budget repeals this rationing board to protect those that have organized their retirements around the critical Medicare program.

 

Q: I am currently 54 years old or younger. Will Medicare be there for me?

A: Yes. The Path to Prosperity protects and strengthens Medicare for those 54 and younger. Starting in 2023, new beneficiaries will be given the ability to choose from a number of competing plans that are certified by Medicare and required to guarantee affordable coverage to all seniors, regardless of health history or pre-existing conditions. 

Medicare-certified plans, including fee-for-service Medicare, would compete against each other to deliver the highest quality coverage at the lowest price for the senior. Medicare would provide a premium-support payment set by a process designed to ensure that seniors would always have guaranteed, affordable coverage.

Seniors with lower-incomes would be provided with fully funded health savings accounts to cover any out-of-pocket costs. And payments would be risk-adjusted, prohibiting plans from cherry-picking the healthiest seniors.

By giving seniors the power to choose among competing plans, with strong protections and guaranteed affordability, Medicare built around premium support puts seniors in control of their health care purchasing decisions instead of government.

By contrast, the President’s health care law restricts access to Medicare coverage for current seniors, while leaving this critical program bankrupt for future generations. The House Republican budget repeals the President’s costly health care law and ensures that Medicare can deliver on its promise for generations to come.

 

Q: What will happen if health-care costs continue to rise as fast as they have been rising lately? Will I still be able to afford care?

A: Yes. For starters, these reforms ensure guaranteed affordability for generations to come. There is bipartisan agreement that the skewed incentives built into government health care programs are a key driver of health inflation. For decades, politicians in Washington have tried to control costs through a centralized bureaucracy that attempts to set prices in health care. It hasn’t worked. By contrast, reforms built around choice and competition, as demonstrated by Medicare’s prescription drug benefit program, have more effectively controlled costs while delivering the high quality of care that seniors deserve.

While choice and competition in government health care programs are the best means to address spiraling costs, our budget provides extra protections for seniors – more financial assistance for low-income seniors and those with greater health risks, and less support for wealthier seniors.  The House Republican budget ensures that beneficiaries no longer have to pay the price for Washington’s failures.  

 

Q: I’ve heard people say that this plan “ends” Medicare. Is that true?

A: No. Independent fact-checkers determined that this claim was the 2011 “Lie of the Year.”

This budget saves Medicare. It’s important to understand that without reforms, according to the non-partisan Medicare trustees, Medicare will go bankrupt just as current seniors are in the heart of their retirements. Our plan contains bipartisan solutions to strengthen Medicare by offering guaranteed coverage options to future seniors, regardless of pre-existing conditions or health history.

 

Q: You’ve put forward your solution. How would others solve this problem?

A: Other than bankruptcy, the alternative to our approach was enacted in the President’s health care law. The President’s health care law does make drastic changes to Medicare, but the enacted changes unfortunately make matters worse. The President’s health care overhaul created an unaccountable board of 15 unelected bureaucrats empowered to cut Medicare in ways that would result in denied care to current seniors.

 

Q: Didn’t the President’s health care law improve Medicare’s solvency?

A: No. The President’s health care law raided Medicare to fund an open-ended health care entitlement. Advocates of the President’s health care law claimed that the law both improved Medicare’s solvency and paid for the new entitlement at the same time. This claim is contradictory. Medicare’s chief actuary testified before the House Budget Committee that the Medicare savings had been double-counted.

The Path to Prosperity stops the raid on Medicare and ensures that any current-law Medicare savings are devoted to saving Medicare. It is crucial that policymakers ensure Medicare’s solvency into the next decade if we want to protect the current arrangements of those in or near retirement.

 

Q: I’ve heard that this budget reduces Medicare spending over the next ten years. If no one over 55 is affected, how is that possible?

A: The Path to Prosperity produces near-term savings over the next ten years by proposing curbs on abusive and frivolous lawsuits. Medical lawsuits and excessive verdicts increase health-care costs and result in reduced access to care. When mistakes happen, patients have a right to fair representation and fair compensation. But the current tort litigation system too often serves the interests of lawyers while driving up costs.

This budget also advances a bipartisan proposal to further means-test premiums in Medicare Parts B and D for high-income seniors, similar to the President’s proposal in his fiscal year 2013 budget. This reform does not go into effect until 2017. These common-sense reforms to subsidize the wealthy less will not cause disruptions to seniors’ current arrangements. 

 

Q: Does this budget reinstate the so-called Medicare “donut hole”?

A: This budget repeals the Democrats’ health-care law, including provisions that increase prescription-drug prices for everyone. In fact, the CBO confirmed that the law’s new requirements will drive up health-care costs, at odds with claims made by its proponents. In a letter to Chairman Ryan last fall, CBO stated that “[The] increase in prices would make federal costs for Medicare’s drug benefit and the costs faced by some beneficiaries higher than they would be in the absence of those provisions,” and that “the premiums of drug plans will increase along with the increase in net drug prices, so the premiums paid by beneficiaries will increase slightly.” Like the rest of this costly new entitlement, provisions that increase prescription-drug prices should be repealed.

The real threat to seniors’ health care is the fact that Medicare is going bankrupt. The current trajectory of government spending on health care is unsustainable. As noted above, without changes, according to the Medicare trustees, the Medicare program collapses in 2024. Comparing any plan to save Medicare with the status quo means comparing real solutions to a false reality. This budget protects Medicare for current seniors by averting any disruptions and saves the program for future generations by providing a personalized Medicare program – like the one members of Congress now enjoy – with more support for low-income beneficiaries and those with higher health costs and reduced subsidies for high-income beneficiaries.

 

Q: What about the Medicare “Doc Fix” that our nation’s physicians have been promised so they can continue serving seniors?

A: The Path to Prosperity recommends a ten-year “Doc Fix” in the form of a deficit-neutral reserve fund. Washington must stop spending money it doesn’t have, and this proposal will ensure Medicare physicians do not experience sharp reductions in their reimbursement rates – protecting seniors’ access to critical care – without adding to the nation’s debt.