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Rick Santorum Kicks Off Presidential Bid By Misrepresenting Paul Ryan’s Medicare Proposal

By Igor Volsky on June 6, 2011 at 11:33 am

"Rick Santorum Kicks Off Presidential Bid By Misrepresenting Paul Ryan’s Medicare Proposal"

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Rick Santorum kicked off his campaign today by misrepresenting Rep. Paul Ryan’s Medicare plan and then lying about the effects of his own proposal. Santorum, who actually wants to accelerate the cuts in the GOP’s Medicare proposal, appeared on ABC’s Good Morning America to make the big announcement, but when pressed by host George Stephanopuolous on why he would want to change Medicare for current seniors, Santorum argued that seniors are already familiar with the changes he’s proposing:

STEPHANOPOULOS:You mentioned Congressman Ryan’s budget plan. It appears that you want to go farther than Congressman Ryan. You have criticized him for not applying his changes to Medicare, which Democrats say would end medicare as we know it. You would say to people 55 and older, yes, your Medicare will be changed as well?

SANTORUM: Well, remember, George, almost 25% of seniors right now have what the Ryan plan is. It’s called Medicare Advantage. And in fact that number was growing up until Barack Obama slashed the program.

STEPHANOPOULOS: But that’s an option.

SANTORUM: Well, the point is, Seniors were able to take money and go out and purchase insurance. And by the way, the seniors most likely to do it were lower income, less educated consumers. Why? because they thought it was a better deal. And the drug program, Medicare Part “D” is exactly the Ryan program. In other words, seniors get resources from the federal government, the seniors go out and make choices. No senior believes they’re being thrown off a cliff. It’s working wonderfully. Seniors love it.

Watch it:

But one can’t compare Medicare Advantage and the Ryan plan. Currently, the 25 percent of seniors who are enrolled in Medicare advantage have a choice of various private plans and traditional free-for-service Medicare. Ryan, would end the traditional Medicare option and force future seniors to purchase private insurance with “premium support” vouchers that depreciate over time. That’s the exact opposite of the Advantage program in which government payments to Medicare Advantage plans per enrollee actually averaged 109 percent of fee-for-service costs in 2010! A similar distinction applies to Medicare Part D. As Austin Frakt explains:

All Part D plans (PDPs and the drug portion of MA plans) submit bids for the cost of standard coverage. From these bids a nationwide average is computed and a statutorily determined fraction of this average cost is set as the “base premium.” Finally, a plan’s premium (charged to each enrolled beneficiary) is the base premium plus the difference between that plan’s bid and the national average bid. Thus, ignoring adjustments for beneficiary risk and other details (found here) a plan is paid by Medicare a fixed monthly per-beneficiary rate equal to the national average bid less the base premium. Because the payment is tied to national average bids (a market signal) this is a form of competitive bidding.

No such system exists in the Ryan plan or under Santorum’s expansion proposal. Under those plans, seniors would be receiving less support every year, regardless of increasing health care costs.

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