Paul Ryan: Medicare ‘Premium Support’ Is Vouchers Under A Different Name

After initially offering a proposal that would convert the existing Medicare system into a voucher program, Rep. Paul Ryan (R-WI) has recently backed away from the v-word and has instead begun referring to his proposal as “premium support.” But today, after a speech at the American Enterprise Institute (AEI), Ryan clarified to the Washington Examiner’s Phil Klein that “premium support” is essentially a euphemism for voucher:

KLEIN: You’ve made a point of drawing a distinction between vouchers and premium support. Now, while I get the mechanical difference, that they wouldn’t be a voucher that people would then purchase insurance with, it would go to the plans that they choose, but though there is a mechanical difference, it is hard to see what the effective economic difference would be.

RYAN: It achieves a similar scoring result. So, they achieve the same kind of savings path. My Roadmap does have vouchers, but I worked with Alice Rivlin…we agreed on a structure that is not the voucher structure, but is a premium support structure. So it mechanically works a lot different and CBO calls it not a voucher, but premium support. The whole point is it works more like programs people are already familiar with. It works like the Part D benefit seniors are familiar with, it works like the Federal Employee Benefit Plan, that I’m very familiar with as a federal employee and it’s important to make these distinctions, I think….from a budget standing standpoint…it achieves the same result.

Watch it:

First, it’s good to hear Ryan agree that his premium support proposal is almost identical to a voucher in all but the most mechanical of ways — sending the voucher to the insurer rather than the beneficiary would also help decrease instances of fraud and probably save extra money — and as such it will provide seniors with a predetermined amount to purchase private coverage: $8,000 in 2022. All of the financial risk is shifted from the federal government to the beneficiaries and if premiums suddenly increase, seniors would have to pay the difference between the rise in premiums and the $8,000 contribution, making coverage unaffordable. (And it will be increasingly so since the voucher does not keep up with health care spending.)

Secondly, Ryan can continue to say that this system is identical to FEHBP or Medicare Part D, but that won’t make it any more true. Both D and FEHBP reflect increases in premium levels. Ryan, meanwhile, is constraining the rate of growth — seniors will only get a predetermined amount — regardless of the actual growth of costs.