Congressional Democrats are having to recalibrate their attack lines against Rep. Paul Ryan’s budget due to a change in this year’s plan.
{mosads}Democrats have for the last three years repeatedly said that Ryan’s budget “ends the Medicare guarantee, shifting rising costs onto seniors” in an effort to turn the proposal into a political liability for Republicans.
But Ryan made a change to this year’s proposal that could allow Republicans to argue that they are lowering costs for seniors while preserving traditional Medicare.
As in the past, Ryan proposes future seniors being given the choice of buying private health insurance partly by using government subsidies. His first budget as chairman did not contain the choice of traditional Medicare, but he included it in the plans for 2013, 2014 and 2015.
Now he has gone one step further. Unlike the budgets from 2012 to 2014, the new plan does not include a hard cap on federal premium support payments.
Growth in the payments had previously been linked in the budgets to the growth of the gross domestic product plus 0.5 percent. The new budget notes that CBO last year found that under one model without a cap, premiums for seniors would decline by 6 percent in 2020 and the federal government would save $15 billion.
In 2011, the Congressional Budget Office had analyzed a plan with a cap and concluded seniors would pay thousands of dollars more out of pocket as health costs grew faster than the economy.
This prompted Democrats to pounce.
“Once again, this Republican budget does not reform Medicare, it deforms. It proposes to end the Medicare guarantee, shifting rising costs onto seniors and disabled individuals,” House Budget Committee Ranking Member Chris Van Hollen (R-Md.) said on the House floor in March 2012. “And despite claims that market competition is going to bring down those rising costs, the plan creates that artificial cap on voucher support.”
The 2011 CBO report is now outdated, given the changes to the Ryan plan, and Van Hollen is making a more subtle argument.
“In the Republican budget, seniors who wish to use traditional Medicare instead of a private plan will be forced to pay premiums 25 percent higher, on average. Their plan would also destabilize the traditional Medicare program,” he said this week.
“This violates the Medicare guarantee, as seniors will have to pay to stay in traditional Medicare, and over time that program will collapse into an insurance death spiral,” he argued.
Van Hollen noted that the savings under the plan without the hard cap is not likely to be very great.
“There is no evidence that this plan will reduce Medicare spending sufficiently to make the program solvent or fundamentally improve the long-term deficit projections,” he said through his spokesperson.
Ryan’s office anticipated the new attack line and has a response.
“It appears Rep. Van Hollen is citing the CBO report on premium support from last fall. Unfortunately, he mistakes the reforms proposed in that report for those proposed in our budget,” Ryan spokesman William Allison said.
He said that the Ryan plan begins later, grandfathers those near retirement and uses different assumptions from CBO.
“The CBO report is important, however, because it demonstrates-using two different premium-support models-that choice and competition can produce savings for both taxpayers and seniors. This is something we have seen in Medicare Part D, where choice and competition have brought program spending under projections every year,” Allison added.
“Last year, CBO did not have the tools to analyze what effect these same forces would have on Medicare, but they have clearly made progress since then and can now show that reforms like these yield benefits across the board.”