Last week's Republican presidential debate and the elevation of Rep. Paul Ryan to House speaker made it clear that the 2016 elections will carry very high stakes for Medicare—not to mention for Medicaid, Social Security and the Affordable Care Act.
It's now conventional wisdom in the Republican Party that Medicare should be converted into a defined-contribution program to prod seniors into private Medicare plans and cap spending. That makes it likely Republicans will push forward with that model—which they've been advocating in various forms for more than 20 years—if they win the White House and maintain control of Congress in next November's elections. The big question is how much they'll actually do about it—or talk about it—prior to the elections, given Medicare's broad popularity.
Two leading GOP candidates have declared their support for converting Medicare into what they call a “premium support” and others call a voucher program. Jeb Bush and Marco Rubio have come out with plans to do that. Bush released his outline just before last week's debate. These proposals resemble Medicare restructuring plans spearheaded by Ryan and repeatedly passed by House Republicans on straight party lines.
The central idea is for the federal government to make a fixed monthly payment to future beneficiaries that they would use to buy either a private plan or the government-run Medicare plan. Any costs in excess of the federal payment would come out of beneficiaries' pockets. That would be a major change from the current system in which beneficiaries can choose traditional Medicare and have the government cover the full cost of the program's defined-benefit package.
Supporters say the premium support model would better control Medicare spending through vigorous competition between private plans and traditional Medicare. But depending on how the program is designed, critics say it could shift costs substantially to beneficiaries, hurting lower-income and sicker people.
“The question is whether (Republicans) want to run it up the flagpole this year—even though it's completely symbolic with President Obama in office—so (Speaker Ryan) can redouble his credibility as a conservative reformer,” said Jonathan Oberlander, a health policy and management professor at the University of North Carolina who studies Medicare and healthcare reform policy. “It's risky electoral politics.”
Along similar lines, GOP presidential candidate Gov. Chris Christie called for raising the Medicare eligibility age, which the Congressional Budget Office has said would save Medicare modest amounts of money while shifting costs to Medicaid. Dr. Ben Carson, who's leading the polls among Iowa Republicans, wants to encourage everyone to move into a cradle-to-grave health savings account program that would offer an alternative to Medicare and Medicaid, with those accounts at least partly funded by money taken from Medicare and Medicaid.
Among GOP candidates, only Donald Trump, Mike Huckabee and Rick Santorum have questioned the need or desirability of making major changes to Medicare. When the Medicare question was raised during the debate, Trump said he favored expanding the economy to pay for healthcare costs. Huckabee argued the focus should be on more effectively treating chronic disease to bring down Medicare costs. He previously called it “theft” to reduce benefits for people who have long paid into the federal social insurance programs.
Oberlander said the ascension of Ryan and the support of GOP presidential candidates for a Ryan-style Medicare restructuring guarantees that the Democrats will make preserving and protecting Medicare a major issue in the election campaign. “Hillary will say the 2016 election is a choice about Medicare,” Oberlander said. “The Democrats will run on it if Republicans give them a chance, and they may run on it even if Republicans don't give them a chance.”
Indeed, following Ryan's election as speaker, House Minority Leader Nancy Pelosi seemed to be salivating at the rich target environment offered by Ryan's previous budget proposals. “This presents the clearest distinction of anyone they could have named,” Pelosi told the New York Times. “Eight-hundred-billion-dollar-cuts in Medicare; big tax breaks to the wealthiest people; voucherizing Medicare … block-granting Medicaid … We welcome the debate on the substance.”
At last week's debate, Rubio predicted Democratic attacks on Republican Medicare proposals. So he stressed that the changes would be off in the future, affecting people younger than 55 rather than many of the people listening to the debate. He's undoubtedly aware that about 30% of voters in Iowa, the site of the first presidential primary, are 65 or older, according to the Iowa Secretary of State's Office (PDF).
Democrats are “going to demagogue what we're saying here tonight,” Rubio said. “Nothing has to change for current beneficiaries. My mother is on Medicare and Social Security. I'm against anything that's bad for my mother.”