The Republican budget ends Medicare as we know it

May 4, 2011

Lois Capps


The federal budget deficit is a big problem, one that must be addressed to shore up our long term economic future.The issue is not whether we reduce the deficit, but how we do it.

The latest flavor of the month in this debate is the so-called “Ryan Budget” which House Republicans passed, in a partisan vote, last week.

The Republican budget has a lot of problems. For example, despite the $4.3 trillion in cuts it calls for, two-thirds of which are for programs helping low and moderate income citizens, the plan would barely reduce the deficit in the next ten years. That’s probably because the plan also calls for $4.2 trillion in tax cuts, which would go disproportionately to the wealthiest among us. In fact, most of the deficit reduction the plan claims actually comes from an accounting gimmick involving war funding.

But the most controversial proposal is probably the plan to end Medicare as we know it by turning it into a voucher program. This would be a huge mistake.

The first problem? Seniors wouldn’t be guaranteed health care under this plan. Instead, starting in 2022, seniors would be given a voucher for a fixed amount of money to partly pay for a private insurance plan.  But there is no guarantee of coverage.  And there is no guarantee the voucher would ensure a senior has the kind of coverage she has come to expect from Medicare. None.

The second problem? According to the nonpartisan Congressional Budget Office (CBO), this voucher would cover less than half of the cost of the benefits individuals receive in today’s Medicare. In fact, CBO estimates that average out-of-pocket costs for seniors would double –  from $6,000 to $12,000 – while the government’s share would actually drop. Moreover, seniors’ share of costs would increase even more over time because the voucher’s value would not rise as fast as health insurance premiums.

In fact, limiting the voucher’s value is how the Republican plan reduces costs to the federal government – it simply shifts the health care costs to Medicare beneficiaries, people who often live on modest, fixed incomes. It does nothing address rising health care costs and actually repeals efforts currently underway to do just that.

Another problem? The Republican budget repeals health care reform and its protections to ensure a senior can’t be denied coverage due to a pre-existing condition, the ban on co-pays for preventive services, and the closing of the dreaded “donut hole.”

The CBO is clear about what would happen under the Republican budget voucher plan: some seniors will forgo insurance all together, while others won’t get coverage because plans are too expensive or they don’t cover particular services.  Ironically, these problems – access and cost – are the reasons that Medicare was started in the first place!

Before Medicare, seniors were America’s most likely group to be uninsured—barely 14% of them had health insurance coverage.  Before Medicare, almost one-third of all seniors were in poverty—and countless others would have been, if not for large sacrifices borne by their families. Without Medicare’s guarantee of coverage, many seniors needed to make a horrible choice—go to the doctor or put food on the table.

Medicare put an end to that by providing guaranteed access to quality, affordable care for all seniors.  It is responsible for keeping millions of our parents and grandparents out of poverty, giving them a little peace of mind after a lifetime of work. And it has freed up their adult children to invest in the future of their own children, instead of having to worry about whether or not their parents will get the health care they need.

Medicare is a remarkable success story, one that has helped all Americans. Yes, we know it has its problems and they must be addressed. But the overall goal of the program is just as important today as it was when the program began:  guaranteeing seniors access to affordable, quality health care.

The Republican plan to privatize Medicare ends that guarantee. Seniors will pay more for health insurance – much more – than they do today, if they can get coverage at all. Some will get substandard coverage and some won’t be able to afford a policy at all.

Forty years ago, we promised as a nation that health care for seniors would be guaranteed.  The Republican voucher proposal breaks that promise. It’s the wrong way to fix our deficit problem.

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What has Lois Capps done about this???


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