In an interview with ThinkProgress, Sen. Ron Wyden (D-OR) addressed criticism of the Medicare premium support plan he introduced yesterday with Rep. Paul Ryan (R-WI). Before tackling the policy specifics, Wyden addressed the political reaction to the plan and played down Republican support for his proposal. “I want folks all across the political spectrum…to be supportive of these kinds of principles,” he said, in response to a question about Newt Gingrich’s and Mitt Romney’s endorsements of Wyden/Ryan. “I don’t put too much stock into someone saying on the campaign trail that they’re for this, or they’re for that.” “I’m looking for people who will talk in specific terms about the fundamental issues — will they be for traditional Medicare being there for all time?,” he offered.
Under the Wyden/Ryan proposal, beginning in 2022, seniors will receive a pre-determined premium support voucher to purchase benefits through an exchange of private plans or the existing fee-for-service program. The government subsidy would be determined by the “second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive” and “rise or fall along with the actual cost of the policies — creating more protection for seniors” than past premium support plans.
Some health analysts, including this blog, have raised concerns that shifting beneficiaries from Medicare into private health insurance plans would undermine Medicare’s “guaranteed equitable access to affordable health care” and, in some geographic areas, offer premium support subsidies that don’t fully cover the cost of traditional Medicare. The program would also place seniors in the untested — and at times untrustworthy — hands of private insurers, who would have an incentive to design policies that attract only the healthiest applicants. Wyden/Ryan does offer tools to help prevent cherry-picking, but the plan is somewhat vague and relies on existing risk adjustment mechanisms that may not eliminate adverse selection against traditional Medicare.
What follows is an abridged and edited version of Wyden’s response to this criticism:
MOVING AWAY FROM THE ADVANTAGES OF MEDICARE
VOLSKY: Some health analysts have asked, why would you take Medicare that’s a bulk purchaser, that can drive innovation that, with the Affordable Care Act is going to do delivery reforms that are hopefully going to be taken systemwide, why would you take take that, move more people out of it, make it smaller over time and rely on this new competitive structure that for the most part is an untested system?
WYDEN: I’m for using Medicare marketplace leverage at every possible opportunity. For example, I’ve been one of the strongest proponents of lifting restrictions so that Medicare can bargain to hold down the costs of medicine. Of course you ought to use the marketing power of Medicare. What we’re simply saying is that anyone who wants to be in traditional Medicare today, can do it, can be in traditional Medicare. I simply think it makes sense to give senior citizens the choice to do something else, particularly if you have the consumer protections I envision.
VOLSKY: But if the program becomes smaller over time, as it inevitably will, when people go into the private Medicare exchange…
WYDEN: I don’t believe that you can foreordain the decisions. I think people are going to look…
VOLSKY: Do you envision that most people are going to remain in traditional Medicare?
WYDEN: I think traditional Medicare certainly has a story to tell right now. I think traditional Medicare with [low] per-patient growth, right now, going to talk about that, that’s as it should be.