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Ryan plan would end Medicare's 'blank check'
House Budget Committee Chairman Paul Ryan (R-Wis.) officially reopened a fierce Medicare debate Tuesday with his latest plan to partially privatize the program.
Senate Democrats have already signaled that they plan to campaign heavily on Ryan's Medicare plan. Ryan and Republicans, meanwhile, have doubled down on the proposal, insisting they're the only ones with a plan to prevent Medicare from swallowing the federal budget.
"The open-ended, blank-check nature of the Medicare subsidy drives health-care inflation at an astonishing pace, threatens the solvency of this critical program, and creates inexcusable levels of waste in the system," Ryan's 2014 budget proposal states.
Ryan had briefly floated changing that age to 56 — a possibility that energized Democrats — but stuck with 55 in the end.
Democrats are still sure to attack the proposal as the "end of Medicare as we know it," as they have for the past two years.
Ryan's plan would create a new Medicare program highly similar to the basic structure of President Obama's signature healthcare law. It would establish an exchange for private Medicare plans, which would have to cover people with pre-existing conditions and could not charge those customers higher premiums.
Medicare plans would have to offer benefits that are actuarially equivalent to the government-run plan.
Seniors would receive a subsidy pegged to the cost of the second-cheapest plan. Plans couldn't raise their costs each year by more than the increase in Gross Domestic Product plus 0.5 percentage points — the same level at which Obama's health law caps annual growth in Medicare costs.
Ryan's budget ridicules the Affordable Care Act for cutting Medicare spending by reducing payments to doctors and hospitals, rather than cutting from benefits.
"The unchecked growth of the Medicare program cannot be sustained, and the government’s continued reliance on price controls will only make matters worse," the budget states.
But Ryan's budget leaves in place most of the Medicare provider cuts in Obama's healthcare law — the same $716 billion in cuts Ryan attacked on the campaign trail, despite having preserved them in his budget proposals.
By calling for the repeal of the Affordable Care Act, Ryan says, the money would be better spent.
"This budget calls for directing any potential Medicare savings in current law toward shoring up Medicare, not paying for new entitlements," the budget outline says.
