Mitt Romney clarified his plan to partially privatize the Medicare program during an interview with the Washington Examiner’s editorial board Wednesday morning, suggesting that he would allow Congress to vote on the amount of “premium support” credits (or vouchers) seniors receive to buy health care coverage every year. Broadly speaking, like Paul Ryan, Romney seeks to gradually privatize the Medicare program for future enrollees by shifting seniors into private coverage and issuing everyone a “voucher” with which to purchase insurance. The plan also preserves the traditional Medicare option — known as fee-for-service — and seniors would be given a choice between using their vouchers towards the existing Medicare program or private insurance.
“[L]ower income seniors will receive more generous support to ensure that they can afford coverage,” but the government’s vouchers won’t keep up with premium increases and as a result, seniors who cannot afford to pay anything above the government contribution may be stuck in cheaper and perhaps lower quality health plans that contract with lower quality providers or cover fewer expensive tests and procedures. During today’s interview, Romney reiterated that the voucher would not grow with health care spending and hinted that Congress would be responsible for approving voucher increases annually:
KLEIN: Exactly. You know now, obviously a key question that’s going to determine whether this plan puts Medicare in a sustainable fiscal trajectory is the rate of growth of those support payments. Would the value — under your plan would the value of those subsidies grow at the standard measure of consumer inflation, or the rate of medical inflation?
ROMNEY: […] One is Congressional action — deciding as Hoover, Heritage and Brooking said a few years ago, we just have a budget. And every year don’t call this an entitlement. Every year pass a budget for how much the total subsidy is going to be. And that would then set the limit of how much each person is going to receive. Obviously, I’ve mentioned that people of lower income would get a higher subsidy than people of higher income. […]
KLEIN: So you are saying, just to clarify, you would leave it up to Congress to determine it each year or that’s one idea that —
ROMNEY: That’s one, that’s one principle. I think the key principle is this: It’s not going to grow at an open-ended rate driven only by medical inflation.
Congress already appropriates funding for Medicare, but since the program has long-term implications for our country, that spending is classified as mandatory, meaning that lawmakers do not vote for it every year. Here, Romney is proposing placing federal funding for seniors’ health care at the whims of what many see as a dysfunctional body, creating great uncertainty for America’s neediest and most vulnerable population.