February 19, 2012


The War on Wyden: For daring to work on Medicare reform with Republican Paul Ryan, the Democratic senator from Oregon is lambasted by keepers of the liberal flame. (Kimberley A., Strassel, 2/16/12, WSJ)

Mr. Wyden has been stressing to colleagues that this joint proposal is different from Mr. Ryan's initial reform--which Democrats attacked--and offers plenty to reassure his party. It preserves the option for seniors to stay in government-run Medicare, makes Mr. Ryan's "premium support" plan more generous, even adds a catastrophic benefit. Mr. Wyden notes there'd have been no plan had not Mr. Ryan agreed to "traditional Medicare remaining a permanent part of the program," a fact, he says, that rebuts any notion of it "withering on the vine."

The real problem, he acknowledges, is ideological opposition to any private-sector involvement--a position that frustrates the senator, since it is already reality. More than 40% of Oregon seniors already use private coverage, through Medicare Advantage or Medigap.

"This is a disconnected conversation," he pronounces. The Wyden-Ryan bill is simply acknowledgment that any serious entitlement reform must encompass choice and markets.

That's been clear since the 1990s, when Democrats like John Breaux and Bob Kerrey came out for premium support. 

Medicare Reform Faces Reality (Joseph Antos, February 17, 2012, The American)

The Coburn-Burr solution is premium support, a system based on fair and open competition that gives the health sector a reason to find more efficient ways to deliver necessary care. Medicare would move from a defined-benefit program, which promises unconstrained fee-for-service payment for covered benefits, to a defined-contribution plan, which gives consumers the resources to choose a health plan that best meets their needs.

All the plans, including traditional Medicare, would bid against each other and would have an incentive to seek more efficient ways of delivering necessary care. No senior would be forced to leave traditional Medicare, but a better deal might be found in one of the competing plans that can offer the full benefit package for less.

Rather than waiting a decade to make this fundamental reform, Coburn and Burr would start competitive bidding in 2016. They recognize that delaying competitive bidding means delaying the efficiencies that the health sector will implement when given the financial incentive. Why wait when delay only means wasting more money?

Premium support with competitive bidding has the potential to save the taxpayers substantial sums without forcing seniors to pay more for their Medicare benefits. A recent AEI report shows that one form of competitive bidding could reduce Medicare outlays by $339 billion over the next decade without cutting benefits. If we do not find a way to achieve savings of this magnitude, Medicare will become an increasingly difficult burden on younger people, who pay most of the program's costs through their taxes.

Other steps must also be taken. Medicare enrollees are going to have to pay higher premiums, and doctors are going to have to accept today's payment rates for the next few years. Wealthier seniors will pay more out of their own pockets for their healthcare, and millionaires on Medicare will have to pay the full cost of coverage themselves. Medicare's eligibility age will gradually increase to 67. One clear improvement: Medicare will become a more streamlined benefit that, for the first time, offers protection against catastrophic expenses.

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Posted by at February 19, 2012 9:58 AM

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