As the super committee struggles to secure a deal ahead of its Nov. 23 deadline, Republicans have begun blaming Democrats for failing to conform to their spending and revenue requirements. This morning, committee co-chair Rep. Jeb Hensarling (R-TX) appeared on Fox News to fault Democrats for failing to embrace a Medicare reform plan that would partially privatize the program for future enrollees:
HENSARLING: Republicans have gone a great way in trying to negotiate here. We put forth a plan that would actually save and strengthen Medicare. They rejected our plan that was in our budget, so we said fine — if you don’t like that plan, how about something called Rivlin/Domenici, which is a bipartisan plan written principally by Bill Clinton’s former head of the Office of Management and Budget. We can negotiate around that. They rejected that too.
Switching one privatization plan for another is not much of a concession, particularly since the “compromise” plan would still force seniors to pay more for benefits and jeopardize one of the most efficient and popular health care programs in the country.
While the Medicare scheme contained in Paul Ryan’s budget would have forced tomorrow’s seniors to choose a private plan from an exchange of private plans and provided seniors with “premium support” that significantly depreciated over time, the “compromise” proposal preserves the existing fee-for-service Medicare program as an option and offers seniors a “premium support” that does more to keep up with actual health care spending. But seniors who choose to stay in the fee-for-service plan would still be stuck with a premium credit that did not keep up with health care spending and their costs would only increase as private plans cherry-pick the healthiest beneficiaries and leave sicker applicants to traditional Medicare. Ultimately, Rivlin/Domenici — like the Ryan plan before it — fails because it breaks up the market clout of traditional Medicare and sets the nation on an untested path of private competition that could do more to shift costs to seniors than limit overall health care spending. It moves the system closer to the Ryan ideal in which future Congresses could cut federal costs by eating away at the premium credit, thus pushing more health care costs on to the individual.
A better approach would be to take advantage of the bargaining clout of traditional Medicare and focus on modernizing the system through payment reform and delivery system changes, both those are precisely the kind of reforms that Republicans want to repeal in the Affordable Care Act.