Privatizing Medicare: The Next GOP Plan for Cutting the Deficit, Perhaps
Congressional Republicans are considering some major budget moves that would affect Medicare patients and the healthcare providers who serve them. While the GOPers are unlikely to get what they want this year, 2012 could be a different story if they take over the Senate and the White House.
First of all, Republican lawmakers are debating a proposal from House Budget Committee Chairman Paul Ryan (R.-Wisc.) that would replace today's Medicare entitlement with vouchers that seniors could use to buy private insurance.
The end of Medicare as we know it
This would clearly end Medicare as we know it. Elderly people could no longer count on the government program to pay for the care they need. Instead, they'd be at the mercy of private insurance companies who might easily raise their premiums faster than Medicare would increase the size of their vouchers.
Ryan's plan bears a superficial resemblance to the current Medicare Advantage program, which also use private insurers. But there's a crucial difference: Instead of the government deciding what it will pay the Medicare Advantage plans, as it does now, it would pay a set amount to elderly individuals, who would then have to try to find the best plan they could for that amount of money.
That would cap the government's future healthcare obligations -- but only by passing the risk onto seniors. Sen. Chuck Schumer (D-N.Y.) put it this way: "Anyone who doesn't think privatization will mean severe cuts to Medicare benefits, I have a bridge I'd like to sell them. Privatization will make the cuts previously proposed by either party look tame."
GOP remains undecided
Republicans haven't decided whether they will include this approach in their budget proposal. But if they do, they can cite support from the two deficit reduction panels that met last year, including the President's own commission and a private body chaired by former Sen. Pete Domenici (R-N.M.) and Democratic economist Alice Rivlin. The Obama deficit reduction panel, however, said that vouchers should be considered only if health costs couldn't be contained by other means.
It's doubtful that the Republicans will push for vouchers, at least before the 2012 elections. It would be too easy for the Democrats to use vouchers as a club against the GOP. And even if healthcare reform failed to control costs down the road, it's more likely that we'd end up with a single payer system -- Medicare for all -- than with a system that penalizes the elderly.
Cut subsidies for electronic medical records?
Meanwhile, Rep. Jim Jordan, an Ohio Republican, has introduced a bill that would repeal big chunks of the 2009 stimulus legislation. One of those chunks is the HITECH Act, which authorizes $27 billion in health IT incentives for doctors and hospitals. These incentives, which depend on providers being able to show "meaningful use" of electronic records, are a key component of the Obama Administration's plans to restructure health care.
But at a time when Republicans are emphasizing the need to cut the deficit at all costs, everything is expendable. Eat the seed corn of health IT! Throw seniors to the insurance wolves! It all sounds good to the excitable Tea Partiers and the GOP elders reading their fortunes in the tea leaves.
Image supplied courtesy of Flickr.
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