A Real Choice on Medicare

By The New York Times | Editorial

24 April 11

e know it is not how most people want to spend their time, but Americans need to give a close reading to the Democrats' and Republicans' plans for Medicare reform. There are stark differences that will profoundly affect all of our lives - and clear political choices to come.

The Democratic approach is mostly imbedded in the broader health care reforms enacted last year. The Republicans' approach - including a call to repeal reform and ultimately privatize Medicare - was fashioned by Representative Paul Ryan and adopted by the House.

Here are some of the most significant elements:

FOR BENEFICIARIES, OR THOSE WHO WILL SOON BE During last year's Congressional campaign, Republican leaders claimed to be Medicare's stalwart defenders - conveniently ignoring their historical animosity toward the program. Older voters overlooked that history and flocked to the party in large numbers. Now the Republicans have embraced many of reform's changes for Medicare - without, of course, advertising their flip-flop.

One of the biggest differences, under both parties' plans, would be a large reduction of unjustified subsidies to private Medicare Advantage plans that serve 11 million of Medicare's 46 million enrollees. Last year, those plans were paid 9 percent more per enrollee, on average, for coverage comparable to what traditional Medicare would provide. By eliminating most of the subsidies, the Democrats hope to save $136 billion over 10 years. The Republicans plan to cut only $10 billion less.

The Republicans have also embraced health care reform's necessary plan to slow the growth rate of payments to health care providers, which was expected to save hundreds of billions over the next decade.

House Republicans would make another deep cut - definitely not in the Democrats' plan - that would hit many current and future Medicare users hard. The reform law provides subsidies to help close a gap in prescription drug coverage, known as the doughnut hole, that poses a hardship for millions of patients who need lots of medicine and often cannot afford to pay for it. The Republicans would repeal that subsidy.

Perhaps most significant, the two parties have very different approaches to what they would do with their savings. The Democrats would use the savings to extend coverage to tens of millions of uninsured Americans, a goal we heartily endorse. The Republicans say only that they would use the money in some way to bolster the solvency of Medicare. That is not good enough.

MEDICARE IN THE FUTURE The differences get even bigger over time. President Obama wants to retain Medicare as an entitlement in which the federal government pays for a defined set of medical services. The Ryan proposal would give those turning age 65 in 2022 "premium support" payments to help them buy private policies. There is little doubt that the Republican proposal would sharply reduce federal spending on Medicare by capping what the government would pay at very low levels. But it could cause great hardship by shifting a lot of the burden to beneficiaries. The Congressional Budget Office estimates that by 2022 new enrollees would have to pay at least $6,400 more out of pocket to buy coverage comparable to traditional Medicare.

Huge numbers of Medicare beneficiaries live on modest incomes and are already struggling to pay medical bills that Medicare does not fully cover. We should not force them into private health plans that would charge them a lot more or provide much skimpier benefits.

CONTROLLING REAL COSTS The country cannot wrestle the deficit under control unless a way is found to slow the rise in medical costs - and Medicare's demands on the federal budget. President Obama is clearly dedicated to reforming the health care system. Mr. Ryan relies mainly on the idea that costs will come down because of competition among private plans and more judicious use of health care by patients who are forced to pay more. His proposal is too sketchy to determine whether he would repeal or retain most of the reform law's quality-improvement efforts, consumer protections and pilot projects to reduce costs.

What is clear is that House Republicans are determined to repeal reform's strongest cost-control measure: an independent board that would monitor whether Medicare is on track to meet spending targets and, if not, propose further reductions that Congress would have to accept or replace with comparable savings.

Republicans charge that this would allow "unelected bureaucrats" to "ration" health care, and members of both parties object to relinquishing any power over federal spending. But Congress has shown it is far too susceptible to lobbying by insurers, hospitals, patients and other special interest groups. It makes sense to let experts drawn from diverse backgrounds set a course for Congress based on the best available evidence of what might work.

We were skeptical when the Republicans suddenly claimed to be Medicare's great defenders. We are even more skeptical now that we have read their plan. We are also certain that repealing reform - the Republicans' No. 1 goal - would do enormous damage to all Americans and make it even harder to wrestle down health care costs, the best way to deal with the country's long-term fiscal crisis.