Pages Menu
TwitterRssFacebook
Categories Menu

Posted by on Aug 14, 2012 in At TMV | 34 comments

The Truth About Paul Ryan’s Medicare Reform Plan

No politician in my lifetime has ever wanted to touch Medicare. We all know it’s heading downhill, but we just watch it roll down because it’s too politically risky to tackle. Now, we have a man brave enough to do that. There has been a lot of spin and distortion from the other side, so let’s just get to the truth about it. (emphasis mine)

From the American Enterprise Institute:

The short story is that, no matter how unsustainable or inefficient our entitlement programs may be, the burden of proof is absolutely on the party that wants change. Back in 2005, we constantly asked our opponents, “Where’s your Social Security plan? When will you put something on the table.” Had they done that, President Bush’s plan would have appeared in a far better light. But Nancy Pelosi’s answer— literally, according to Time Magazine—was, “Never. Is that soon enough for you?” And guess what? She paid zero political price. The public doesn’t care if the other side doesn’t have a plan. They do care if your plan appears to threaten them.

That’s why the Romney campaign needs to come out strong. They need to point out that it was President Obama, not Romney, who cut $700 billion from Medicare to fund other priorities. Listening to Democrat Debbie Wasserman-Schultz on the Sunday shows, you’d think it was the other way around.

Next, Romney’s campaign needs to proactively head off false attacks on Ryan’s Medicare plan. Voters needs to know three things about Ryan’s Medicare reform proposal co-sponsored with Oregon Democrat Ron Wyden. First, no one over the age of 55 would be affected in any way. Second, traditional Medicare fee-for-service would remain available for all. “Premium support”—that is, government funding of private insurance plans chosen by individuals—is an option for those who choose it. No senior would be forced out of the traditional Medicare program against his will. And third, overall funding for Medicare under the Ryan-Wyden plan is scheduled to grow at the same rate as under President Obama’s proposals. Is this “gutting Medicare” and “ending Medicare as we know it”? In reality, it’s the market giving seniors cheaper, higher quality choices they can take if they wish, with the traditional program remaining an option.

From Fox Business News:

The Ryan plan does not get rid of Medicare. People now and in the future can choose to stay in it. Ryan does propose new Medicare enrollees age 65 would get to pick between private insurance plans offered in a new Medicare exchange in 2023, where Medicare would compete with private insurers for their business.
The insurance must cover a base level of benefits, must cover pre-existing conditions, can’t charge higher rates based on health condition or age, plus it must offer a minimum threshold of coverage. The federal Centers for Medicare and Medicaid Services would regulate the plans.
The federal government would pick up the tab for premium support, and pay that subsidy directly to the insurer of their choice, with seniors paying the difference. If the plan is cheaper than Medicare, seniors get a rebate check.
And the more ill or poor the Medicare enrollee is, the more government insurance support they get in the Ryan plan.

Click here for reuse options!
Copyright 2012 The Moderate Voice
  • sparrow

    Politifact…..

    ” The 2010 Patient Protection and Affordable Care Act that Obama pushed for doesn’t cut Medicare; it simply reduces projected future increases in costs by $700 billion over 10 years. “The cuts don’t come from the current Medicare budget, they put a leash on future growth and payment increases,” according to the Tampa Bay Times’ fact-checking site, Politifact.”

    http://go.bloomberg.com/political-capital/2012-08-13/medicare-truth-behind-the-cuts/

  • RP

    Once again an article that points out 700 Billion cuts to Medicare. But in a world of trillions, people a immune to billions.

    Lets make it personal.
    48 million benificiaries in 2011
    $12,000 medical spending per beneficiary in 2011
    63 million beneficiaries in 2019
    With ACA cuts, projected $13,200 cost per benificiary in 2019.

    Over 7 years, this $1200 increase can not come close to covering new procedure cost, new drug cost and inflationay cost for hospitals and physician offices.

    In the early 90’s seniors had a fit with means testing for the rich. Congress repealed that legislation. These cuts hit all Medicare beneficiaries.

    But the Republicans are so aligned with the rich that they think 700 billion makes an impact on the average citizen. It does not. Showing how 700 billion will cut personal services would make an impact.

    Ryan offered an alternative. Smart people would take that alternative, offer one themselves and then work out a plan that both can accept. Stupid people would take the alternative and demonize it without even trying to offer their own alternative.

  • sparrow

    Kathleen this Fact Check is more complete… perhaps it would benefit all of us to start with the truth when possible and then proceed to the vote with as much civility as possible… Last week i took a Texas swipe at you, that was totally unnecessary and tacky.. sorry..

    http://abcnews.go.com/Politics/wireStory/fact-check-questionable-claims-veep-debut-16986064#.UCp1j6OWxWc

  • RP

    sparrow, I agree that the changes in ACA are a reduction in spending increases.

    But I think there needs to be a conversation concerning how the cuts impact each beneficiary. If you take the $12,000 spent in 2011 and inflate it 3%, that ends up around $15K per year. And 3% is not even enough to cover new procedures and drugs in most cases. How does the reduction to 13,200 per beneficiary impact medical coverage in 2019?

    At least Ryan has opened the subject for debate. Can smart people debate the issue or just demonize the plan? Is there any smart people in DC?

  • sparrow

    I agree the conversation is needed, yet it does not serve any of us, to turn something into the this important for our nation into the same old, getting older by the day distortions and manipulations from both sides…

  • sparrow

    sigh: someday i will proof before i send…

    correction: I agree the conversation is needed, yet it does not serve any to turn something this important into the same old and getting older by the day — distortions and manipulations. Both sides.

  • DORIAN DE WIND, Military Affairs Columnist

    Sources:

    The American Enterprise Institute and Fox Business News.

    Ok, you convinced me.

    Thanks

  • ShannonLeee

    the problem with having a discussion is that the current incarnation of the Rep party is not interesting in having a discussion. They damn near let the country go into default because of their extremism.

    What Reps want is for Dems to meet them in the middle, just so they can redraw the lines and ask Dems to meet them in the middle again.

    Sorry, the Ryan wing of the Republican party might not be evil, but they are very dangerous ideologues that have no interest in compromise.

  • DORIAN DE WIND, Military Affairs Columnist

    Since we are into quoting from non-partisan, “reliable sources” about the awesomeness of Paul Ryan, why not quote from David A. Stockman, who was the director of the Office of Management and Budget from 1981 to 1985, is the author of the forthcoming book “The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy” and who,writing in the New York Times today, says:

    “Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt.

    Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to “job creators” (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.

    [::]

    Mr. Ryan showed his conservative mettle in 2008 when he folded like a lawn chair on the auto bailout and the Wall Street bailout. But the greater hypocrisy is his phony “plan” to solve the entitlements mess by deferring changes to social insurance by at least a decade.

    [:]

    A true agenda to reform the welfare state would require a sweeping, income-based eligibility test, which would reduce or eliminate social insurance benefits for millions of affluent retirees. Without it, there is no math that can avoid giant tax increases or vast new borrowing. Yet the supposedly courageous Ryan plan would not cut one dime over the next decade from the $1.3 trillion-per-year cost of Social Security and Medicare.

    Instead, it shreds the measly means-tested safety net for the vulnerable: the roughly $100 billion per year for food stamps and cash assistance for needy families and the $300 billion budget for Medicaid, the health insurance program for the poor and disabled. Shifting more Medicaid costs to the states will be mere make-believe if federal financing is drastically cut.

    Likewise, hacking away at the roughly $400 billion domestic discretionary budget (what’s left of the federal budget after defense, Social Security, health and safety-net spending and interest on the national debt) will yield only a rounding error’s worth of savings after popular programs (which Republicans heartily favor) like cancer research, national parks, veterans’ benefits, farm aid, highway subsidies, education grants and small-business loans are accommodated.

    [::]

    In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices. And it couldn’t pass even if Republicans were to take the presidency and both houses of Congress. Mr. Romney and Mr. Ryan have no plan to take on Wall Street, the Fed, the military-industrial complex, social insurance or the nation’s fiscal calamity and no plan to revive capitalist prosperity — just empty sermons.”

    I guess I could have put this in a post and just titled it “The Truth About Paul Ryan’s Fairy Tale’s Budget Plan”

    Read more here http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?nl=opinion&emc=edit_ty_20120814

  • bluebelle

    If Paul Ryan was so concerned about saving Medicare, why did he vote for the biggest expansion of it since the New Deal– the Medicare part D prescription drug plan?? He also voted for the Bridge to Nowhere– so its a little hard to take him seriously now that he’s converted to “fiscal conservatism”

  • slamfu

    “What Reps want is for Dems to meet them in the middle, just so they can redraw the lines and ask Dems to meet them in the middle again.”

    That is the best way I have heard the GOP tactics described. Then they scream about how the dems don’t want to compromise. And somehow it seems to work on a large percentage of voters.

  • hyperflow

    http://www.factcheck.org/tag/paul-ryan/

    Then restart the conversation.

  • jdledell

    There is no question entitlements have to be modified – that includes Medicare, Medicaid and Social Security. However, it can only be done in the context of modifications of the entire budget expenditures and revenue.

    I can envision a version of Wyden/Ryan Medicare bill. HOWEVER, Romney has jettisoned the protections in the bipartisan bill for dual eligible Medicare/Medicaid participants which hits the poor seniors the hardest.

    In addition, there has to be much more consumer protection so private carriers don’t game the system. When I ran HMO’s providing senior care, one of the games they played is the sign-up offices were in 5 story walk-ups( ie only younger able body and thus cheaper seniors would sign up).

    I think means testing of Medicare and SS is appropriate.On SS it should be done via lower maximum benefits based on your last years FIT. On medicare contributions should also be based on last years FIT. In both cases, I think medicare and SS wage bases should be unlimited only for the participant’s cost not the employer(so hiring is not impeded). This extra money plus the means testing will put both SS and medicare in financial solvency.

    Instead of zeroing out all discretionary spending as Ryan presumes lets change the tax code. the changes I would advocate are to put new break points above the current $300,000 + point. Above that point taxes will be 40% to a million, 45% for the next $4,000,000 and 50% above $5,000,000.

    In addition, only the first $100,000 of carried interest, dividends and capital gains/year would get a 20% tax rate and above that it would be taxed as normal income.

    Medicaid should not be block granted to states – Obamacare in absence of a single payer system is a much better approach.

    Corporate taxes should be reduced to a flat 15% of profits – no deductions no more games. The whole federal picture should have a goal of 22% of GNP for both revenue and expenses. Europe is twice that and I think being half of Europe should satisfy even a conservative.

  • davidpsummers

    I think means testing of Medicare and SS is appropriate.On SS it should be done via lower maximum benefits based on your last years FIT.

    Means testing of SS, that has a number of problems. One is that you aren’t, as most people assume, testing by “income”. You are testing by “savings”. So if you are a derivatives treader and you blow enough money on drugs and hookers, you are free and clear, but if you start a neighborhood grocery and save a lot of money, you get dinged. And, in all the proposals I’ve seen, only getting the top, the government is penalizing savings so that can take one persons hot tub to protect another person’s big screen TV.

    OTOH, if you just raise the retirement age, you are essentially restoring the system to what it was originally designed to do (and what it was promised to do).

  • zephyr

    I think a fair method of means testing absolutely has to be part of entitlement reform. Frankly I’m surprised there isn’t universal agreement on this point. The reason I used the word, “fair” goes to davidsummers post. Of course there will be no perfect system, but we can certainly improve it well beyond it’s current state.

    As for raising the retirement age, that depends on the work one has done throughout ones life. Someone who has spent their lifetime working on their feet doing physical labor could easily be worn out and ready for retirement by age 62. If you don’t believe this I submit you haven’t done this kind of work very long.

    In any case, there will have to be political will from both sides and cooperation from both sides in an atmosphere of good faith before anything meaningful happens. 😉

  • RP

    Interesting that two provided their insight into what they would [email protected] and @davidsummers. Nice to see that kind of input and not just the anti left or anti right rhetoric without ideas.

    Thats the problem with politicians. All rhetoric and no ideas for the most part.

    Question for @jdledell. If you have investment income taxed at the same levels as regular income, how could we insure the income earned form overseas investments was taxed and not left offshore. Seems like this may be one of Romneys problems he does not want to disclose. Taxing investments at a lower rate and have them come back would seem to be a better options.

    Your thoughts

  • EEllis

    If Paul Ryan was so concerned about saving Medicare, why did he vote for the biggest expansion of it since the New Deal– the Medicare part D prescription drug plan??

    What, you are saying because years ago he voted for adding drug coverage to medicare, when the economic situation was entirely different, it means he doesn’t care about medicare now???????? I’ll leave the accusation but that logic is something else.

  • DaGoat

    “What Reps want is for Dems to meet them in the middle, just so they can redraw the lines and ask Dems to meet them in the middle again.”

    Really not much different than the incremental approach to change Hillary Clinton talked about back in the 90’s, and not any different than what either party does.

  • ShannonLeee

    RP, as someone that files taxes on overseas income, I can atest to the fact that after a certain amount of credit you receive for paying foreign tax, uncle sam gets his taxes due on that income. there is also the AMT always lurking in the background.

  • ShannonLeee

    DG, even the Dems found a way to compromise back in the 90’s. Reps are simply stonewalling, consequences be damned.

  • roro80

    Wouldn’t making folks pay into SS on all their income, instead of only on the first ~$100K, eliminate the need for means testing?

  • StockBoyLA

    LOL! That is hilarious: “Where’s your Social Security plan? When will you put something on the table.” Had they done that, President Bush’s plan would have appeared in a far better light. But Nancy Pelosi’s answer— literally, according to Time Magazine—was, “Never. Is that soon enough for you?”’

    First of all, the alternative to Bush’s plan, the Democratic alternative, was to KEEP social security intact, as is, and not privatize it. As I recall wasn’t the Bush ss plan one of the reasons (among many) that the public lost faith in the GOP and led to them losing their absolute control on Congress in 2006?

    And secondly, the author states that if the Dems had put their social security plan on the table, then Bush’s plan would have been viewed in far better light. Uh…. how so? Bush wanted to overhaul social security. The burned is on him to come up with (and sell) a better plan to the American people. I love the way that the author assumes any Democratic Party plan would have been worse then the Republican president’s plan. Is the author saying that the Democratic Party’s job is to come up with multiple alternatives so the Republican Party can pick and choose from the worst provisions in the various Dems plans, just to sell their own dastardly GOP plan?

    Secondly, Romney wants to repeal Obamacare… and generally replace it with… Romneycare which is very similar to… Obamacare. I’d like to point out that Obamacare came into being with MANY months of negotiations and amendments by both parties. The GOP had input, as well as the Dems.

    Obamacare was passed. The GOP should just get over it. We need a functioning government to tackle our nation’s problems. I’m sick and tired of the Republicans repealing everything from environmental legislation, which has been passed over the decades to being anti-family (the only family the GOP believes in is a husband and wife who were virgins when they married, who aren’t divorced and raising children…. and they only have sex to procreate. I wonder how many GOPers actually fit there own values). The GOP needs solid values, needs to stop spreading hate and turing Americans against each other and the GOP needs to start coming up with realistic plans to help ALL Americans, especially the poor and vulnerable. The rich are already protected enough and secure enough to flourish. The poor and middle-classes are struggling.

  • jdledell

    RP – Personal Investment income whether US or foreign derived is always taxed in the US minus a credit for foreign taxes. That would apply to partnership income as well as Sub Chapter S and LLP corporations. The loophole on Corporate taxes is if it is a subsidiary based in a foreign country it is untaxed until repatriated.

    I am assuming that Romney has his foreign accounts tied up in deferred income accounts waiting until until some sort of tax amnesty plan to repatriate that income.

  • davidpsummers

    I think a fair method of means testing absolutely has to be part of entitlement reform. Frankly I’m surprised there isn’t universal agreement on this point. The reason I used the word, “fair” goes to davidsummers post. Of course there will be no perfect system, but we can certainly improve it well beyond it’s current state.

    Well, all the proposed plans I’ve seen (which mostly just cut out or diminish benefits to the very top savers) aren’t really what I call “fair”, essentially taking away someone’s hot tub for someone else’s big screen TV. Now if “fair” means testing means reducing benefits for everyone except those in real need (say below the poverty line), then it is more “fair”. Though even here (unlike with raising the retirement age) you have the situation that you retroactively reduce benefits after someone has already planned for and enter retirement.


    As for raising the retirement age, that depends on the work one has done throughout ones life. Someone who has spent their lifetime working on their feet doing physical labor could easily be worn out and ready for retirement by age 62. If you don’t believe this I submit you haven’t done this kind of work very long.

    People can, and will, become unable to work before they retire if they raise the retirement age. But here is the rub. This is already happening at the current retirement age. So the situation is the same either way, people who become unable to work will need to (and already do) go onto existing disability programs.

    In any case, there will have to be political will from both sides and cooperation from both sides in an atmosphere of good faith before anything meaningful happens.

  • davidpsummers

    [I mess up the quoting. I think the response is still intelligible, but if not here it is corrected….]

    I think a fair method of means testing absolutely has to be part of entitlement reform. Frankly I’m surprised there isn’t universal agreement on this point. The reason I used the word, “fair” goes to davidsummers post. Of course there will be no perfect system, but we can certainly improve it well beyond it’s current state.

    Well, all the proposed plans I’ve seen (which mostly just cut out or diminish benefits to the very top savers) aren’t really what I call “fair”, essentially taking away someone’s hot tub for someone else’s big screen TV. Now if “fair” means testing means reducing benefits for everyone except those in real need (say below the poverty line), then it is more “fair”. Though even here (unlike with raising the retirement age) you have the situation that you retroactively reduce benefits after someone has already planned for and enter retirement.

    As for raising the retirement age, that depends on the work one has done throughout ones life. Someone who has spent their lifetime working on their feet doing physical labor could easily be worn out and ready for retirement by age 62. If you don’t believe this I submit you haven’t done this kind of work very long.

    People can, and will, become unable to work before they retire if they raise the retirement age. But here is the rub. This is already happening at the current retirement age. So the situation is the same either way, people who become unable to work will need to (and already do) go onto existing disability programs.

    In any case, there will have to be political will from both sides and cooperation from both sides in an atmosphere of good faith before anything meaningful happens.

  • davidpsummers

    Wouldn’t making folks pay into SS on all their income, instead of only on the first ~$100K, eliminate the need for means testing?

    Well, if you have them pay on all their income, and then give them the corresponding benefits (remember SS benefits are capped in parallel with the cap on payments) you actually drive the system deeper in debt (since most people take out more than they put in plus interest)

  • StockBoyLA

    “Well, if you have them pay on all their income, and then give them the corresponding benefits… you actually drive the system deeper in debt (since most people take out more than they put in plus interest)”

    Lawmakers don’t have to pass a law giving higher income earners the exact corresponding benefits. Having a solvent system is more important than having an insolvent (or non-existent) system with most Americans living in poverty during their golden years. I don’t like walking down the street and seeing homeless for any number of reasons. But I would like it less to walk down the street and see a former grade school teacher asking for handouts because her pension barely covers the cost of her food.

  • davidpsummers

    “Well, if you have them pay on all their income, and then give them the corresponding benefits… you actually drive the system deeper in debt (since most people take out more than they put in plus interest)”

    Lawmakers don’t have to pass a law giving higher income earners the exact corresponding benefits.

    Well, if you tax someone, based on their income, to give benefits to someone else, you have an “income tax”. Now lawmakers could legally do this (hopefully by being upfront about what they were doing rather than burying it in the complexities of the system). Aside from the usual arguments about “taxing the rich” what you think of it will depend the question about whether you want to keep the system running at a deficit by putting in outside revenue (vs all the other needs that same tax could go toward, what if you can’t pay for some poverty program because you don’t want to cut benefits to any seniors regardless of income?)

    Having a solvent system is more important than having an insolvent (or non-existent) system with most Americans living in poverty during their golden years. I don’t like walking down the street and seeing homeless for any number of reasons. But I would like it less to walk down the street and see a former grade school teacher asking for handouts because her pension barely covers the cost of her food.

    Even if you eliminated SS entirely, you wouldn’t have “most” in poverty.
    http://www.cbpp.org/cms/index.cfm?fa=view&id=1863
    And trimming benefits by a modest amount would do far less than that. But I do agree that cutting current benefits will be an added burden for those who have already entered retirement based on the promises that were made. That an advantage of a higher retirement age, your yearly benefits don’t have to be cut at all.

  • Wow, nice to see good discussions going on. 🙂

  • ShannonLeee

    DS, when I follow your link I read this headline
    SOCIAL SECURITY REDUCES PROPORTION OF ELDERLY WHO ARE
    POOR FROM NEARLY ONE IN TWO TO LESS THAN ONE IN EIGHT

    More than 60 Percent of Those Lifted From Poverty Are Women

    …Not too mention that the report is 15 years old.

    SS keeps both of my grandmothers from being “poor”…along with help from the family.

  • sheknows

    Ryans plan is a way to keep the ‘free enterprise” system with huge profits for Insurance companies, doctors, hospitals and drug companies in full swing. Obamas plan is to lower costs by placing much needed caps on medical procedures and charges. United Healthcare just gave a quote to a 58 year old friend with NO health problems for $450 a mo. Just what do you think a 68 yr old with high blood pressure will be quoted?? And what kind of coverage would they receive? What kind of deductible? This is a plan by Ryan to keep the powerful lobbyists greasing their palms.

  • davidpsummers

    DS, when I follow your link I read this headline
    SOCIAL SECURITY REDUCES PROPORTION OF ELDERLY WHO ARE
    POOR FROM NEARLY ONE IN TWO TO LESS THAN ONE IN EIGHT

    More than 60 Percent of Those Lifted From Poverty Are Women

    …Not too mention that the report is 15 years old.

    Yes. “Nearly” one in two is less than 50%. Or in other words, not “most”. And that is elimination of SS entirely. Reduced benefits would have a _much_ more modest effect, but this gets off track because I advocate raising the retirement age, which wouldn’t require reducing yearly benefits.

    SS keeps both of my grandmothers from being “poor”…along with help from the family.

    And, I would note, that raising the retirment age wouldn’t change that.

  • ShannonLeee

    DS, considering that both of them were basically forced out of their jobs because of their age… you are right that raising the age would not have helped them.

    Side note..
    Dillard’s hates old people.
    don’t shop there

  • davidpsummers

    DS, considering that both of them were basically forced out of their jobs because of their age… you are right that raising the age would not have helped them.

    An neither would it have hurt them. Meanwhile, making SS solvent keeps it around for others in such a situation.

Twitter Auto Publish Powered By : XYZScripts.com