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Top Republican and Liberal Democrat Seek Medicare Compromise

They say plan would preserve Medicare, allow flexibility

Here’s how the plan would work:

  • The program would stay the same for those 55 and older. Those who turn 65 after 2022 would choose between traditional Medicare and a private insurance plan. The federal government would give each person money to pay the premium, with the amount set at the cost of the second-lowest of the plans available, whether it’s a private plan or Medicare. Anyone who opted for a cheaper plan would pocket the difference. Those who wanted a more expensive private plan would pay the extra themselves.
  • To restrain growing health costs for the government, the Medicare system would be capped at the growth of the economy plus one percentage point. Wyden says he hopes the changes to the system will do enough to keep costs in line, but if they don’t, Congress will be charged with coming up with a way to cover the costs. That could mean higher premiums for older people. But Ryan said other options are available to Congress as well, such as limiting doctor payments or charging more to wealthier seniors. AARP has opposed charging people more. “We feel seniors already are asked to pay enough,” says Ariel Gonzalez, AARP’s director of health and family advocacy.
  •  Lower-income seniors eligible for Medicaid would get protection from premium increases and money to cover out-of-pocket costs.

  • Workers at companies with up to 100 employees would be able to use employer health insurance funding for private plans outside that company’s offerings, without any tax penalties. That idea, long pushed by Wyden, is aimed at holding costs down for employees who can shop around and at putting pressure on insurers to keep costs low.

Wyden and Ryan say the plan is not yet written with the kind of detail needed for a legislative proposal and realistically won’t be considered by Congress soon, but they wanted to prove a bipartisan solution is possible on the divisive issue. Both parties have used Medicare as a campaign issue, and because Ryan’s original proposal had been so roundly criticized, Democratic candidates were anxious to revive the issue. Wyden’s support complicates the politics.

Ryan, a leading advocate of cutting government spending, says the issue needs to be considered quickly before the Medicare system’s long-term shortfalls become more serious.

“We are in a precarious position as a country,” Ryan says, noting that ignoring the problem and ending up like debt-plagued European countries could lead to higher taxes and benefit cuts. “These entitlements are promising trillions of dollars in empty promises.”

Medicare reform has a long history of being a bipartisan effort, Moffit says. Wyden’s involvement with the proposal will make it harder for the White House to paint reform as a Republican effort to cut Medicare.

“It’s a new beginning for a national conversation on the future of Medicare,” Moffit says.

Also of interest: Saving Medicare. >>

Tamara Lytle has covered politics and government in Washington for more than 20 years.

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