House Republicans Consider Privatizing Medicare

January 28, 2011 by  
Filed under Single-Payer News

From the AP

WASHINGTON — Months after they hammered Democrats for cutting Medicare, House Republicans are debating whether to relaunch their quest to privatize the health program for seniors. House Budget Committee Chairman Paul Ryan, R-Wis., is testing support for his idea to replace Medicare with a fixed payment to buy a private medical plan from a menu of coverage options.

Party leaders will determine if the so-called voucher plan will be part of the budget Republicans put forward in the spring.

“No decisions have been made on the details of our House GOP budget,” Michael Steel, a spokesman for Speaker John Boehner, R-Ohio, said Thursday. “There are a lot of ideas out there, and we’re going to listen to our members and the American people.”

Medicare was one of the most highly charged issues during last year’s congressional elections, which put the House back in GOP control. Republicans slammed Democrats for cutting Medicare by about 6 percent over 10 years to finance President Barack Obama’s health overhaul.

But replacing Medicare’s open-ended benefit with a fixed payment would cut projected spending much more deeply.

“Anyone who doesn’t think privatization will mean severe cuts to Medicare benefits, I have a bridge I’d like to sell them,” said Sen. Chuck Schumer, D-N.Y. “Privatization will make the cuts previously proposed by either party look tame.”

Republicans say it may be the only way to preserve taxpayer-funded health care for seniors in an aging society. The Congressional Budget Office reported this week that the government will borrow 40 cents of every dollar it spends this year, as the deficit hits a staggering $1.5 trillion. Over the long term, health care costs that keep growing more rapidly than the economy are the biggest challenge to the budget.

The idea of a Medicare voucher recently received bipartisan support from a debt reduction panel led by former Republican Sen. Pete Domenici of New Mexico and prominent Democratic economist Alice Rivlin, a former Federal Reserve vice chairman. Obama’s own debt commission said the idea should be considered as an option if other strategies fail to get health care costs under control.

Under Ryan’s plan, current Medicare recipients would get to stay in the program. People within 10 years of eligibility – ages 55 to 64 – would also go into Medicare. But those now 54 and under would get a fixed payment from the government when they become eligible at age 65. They would be able to use the voucher to buy a Medicare-approved private plan from a menu of coverage levels and options.

The amount of the voucher would be based on total current Medicare spending and indexed to grow year by year thereafter. But that growth would be less than the torrid pace of health care inflation now. Proponents say it would be like putting the health care system on a diet, forcing every player from drug companies to hospitals to be more efficient.

Americans are wary of the idea. An Associated Press-GfK poll last year found 51 percent opposed a voucher plan for Medicare, while 35 percent said they supported it. Opposition was strong among seniors and baby boomers. But those born after 1980 favored the approach by 47 percent to 41 percent.

House Republicans have backed Ryan’s idea before, in a 2009 budget plan supported by Boehner. It’s unclear whether they will do that now. They might save it for deficit reduction talks with Obama later in the year.

“We’ll outline our budget in the months ahead, after we see the president’s budget,” said Boehner spokesman Steel.

Comments

18 Responses to “House Republicans Consider Privatizing Medicare”
  1. John Barker says:

    What a miracle it is that we have Medicare. The same right wing forces now clammering to destroy Medicare, opposed it when it was enacted and have fought it ever since. To lose Medicare would be a disaster but it is not impossible. Consider what Americans just did, they elected foxes to guard the hen house. They elected the very people who are responsible for much of their economic and medical care problems. They just elected people who would force upon Americans medical care coverage that is a disaster for those under 65. Americans have before them what works and what does not work and if they are unable to distinguish that Medicare has worked and for profit health care has not worked , then they have to suffer the consequences. If Americans are unable to understand that they are voting against their own economic and medical interests by electing the very people who wish to keep the average American at economic disadvantage then Americans get what they deserve, they get what they vote for. Let’s hope that another miracle is not required as we continue down the path to medical and economic justice.

    • Donna says:

      I like much of what you said. Privitizing medicare for those who are disabled will be making new requirements to what makes a person disabled. Many may not pass the private insurance companies requirements, they may not want to insure a handicapped or ill person the rest of their lives below 65. this would put a greater burden on the states and if one is on medicare and medicaide, medicaide pays the medicare premium, the person may have to pay the insurance premeum and they can’t afford the premium is why they are also on medicaid. Tis may change their position on section 8 housing and food stamps etc. if not determined disabled any longer. dangerous move. Veterans will also be incluided in this change of disabliity on medicare. They have suffered enough all ready. This is a bad reputation to show the other countries who revere their elderly and veterans, to balance the budget by using the poor to take away from. Make the congress and senate to go on social security and on the insurance they want us to have, and not vote them selves so many raises in income on our backs. Tehy are the cause of the debt going higher to pay their costs. thanks for speaking up.

  2. Tom Beebe, St Louis says:

    Let’s end the horrendous tax code and the patchwork of entitlements including state and federal welfare, Medicare, Medicaid, Social Security, and even programs like Pell grants, student loans and farm and corporate subsidies. Cut government down to affordable size. Here’s one plan:

    TAX AND ENTITLEMENT REFORM

    1. All persons residing in the U.S. shall come together in households for the purpose of reporting all income from any source, each item to be identified by payer’s and payee’s tax number, and for receipt of federal and state benefits. Members of a household need not be related, need not reside together, and a household may consist of as few as one person.
    2. Each year congress shall set by legislation a “minimum wage” and a “tax rate”.
    3. The following income shall not be subject to taxation:
    • An amount equal to a year’s earnings at the minimum wage rate, for each adult (age 20-65) member of the household, decreasing 10% per year to 50% at age 15, and increasing 10% per year to 150% at age 70.
    • All payments for what is classified as necessary health care for all members of the household including medical care, any pharmaceuticals prescribed by a recognized health care professional, vision and hearing aids, and membership fees for health-enhancing entities such as gyms or other exercise facilities. Health care insurance premiums may be deducted but not health care expense paid for by such insurance.
    • All educational expenses including day care for young children or legally incompetent persons, that portion of state and local taxes identified as spent on education, that portion of parochial school tuition, fees and other expenses identified as going for non-sectarian education, tuition, fees and educational materials for private school education at any level, and a per-diem allowance for students traveling more than 50 miles from primary residence for education.
    • All income saved into an identified account from which investments may be made. All withdrawals from this account for the benefit of any member of the household shall be reported as income to that member.
    4. The “tax rate” shall be applied to any income over and above the deductions listed above, regardless of amount.
    5. For households whose deductions exceed total income, the Federal Government shall make payment equal to the tax rate multiplied by the shortfall in income, as shall municipalities and states.
    6. There shall be no federal tax on corporations or other business entities.
    7. The Office of Management and Budget shall compute revenues to be expected using the newly set tax rate and minimum wage, applied to the previous year’s reported incomes. No expenses in excess of that amount may be authorized or made by the federal government without approval by 75% of each house of Congress.
    8. At the request, by legislation duly enacted by a municipality having greater than 100,000 inhabitants or a state, a surtax may be imposed on citizens of that municipality or state which shall be applied in a manner exactly as applied for the Federal tax.

    Your suggestions sincerely requested. E-mail them to tbeebe6535@yahoo.com.

    • otherdoc says:

      Interesting, but didn’t the supreme court just rule that corporations are people? And therefore they should be taxed like people. Or they should not be treated like people, and not allowed to put funds into elections or election propaganda.

  3. Tom Beebe, St Louis says:

    “households” assures equal justuce under laww for families and singles alike
    setting the rate and minimum wage (personal exemption) each year assures the economy will receive annual review by the politcal process
    adjustments to the exemption for youth and seniors addresses their special needs
    health care, education and savings exemptions contribute to a productive citizenry, and their production increase tax base, thus growing government’s revenue without increasing tax rate
    applying the same tax rate to disposable income treats all equally; no more “stick it to the rich because they can afford it”
    the negative income tax was first proposed by daniel Patrick Monyhan when in Nixon’s cabinet. Probably the brightest DEMOCRAT senator ever.
    Where do you think corporations get every cent of the money they pay in taxes? From YOU, the consumer. Let’s make American products competitive in the flat world economy
    Run a modest surplus when the economy grows (which in most of the time) and a modest deficit when it contracts, to stabilizze the economy and pay off the debt over time
    costs of living vary from place to place; states and cities need money

    OK, that’s my story; let’s hear yours!

    • Sotten says:

      Absolutely not, Mr. Beebe. Corporations should pay taxes, and no more price transferring that allows them to pay zero taxes on billions of dollars in profits that are transferred to foreign soils. Absolutely yes on taxing the crap out of billionaires and the most wealthy. Most certainly yes for Medicare for all, and do not privatize one more thing. We are already owned by corporations, and with the Bush/Cheney rape and destroy Americans plan, too many things are privatized that need to be put back into government control. I am far more afraid of what corporations are doing to us than I am the government except where government is one and the same (i.e., politicians owning corporations or being bought off by corporations). This corruption needs to stop, and their should be a healthy balance between capitalism and socialism. Capitalism on crack (i.e., the current situation) is killing us.

      • John Barker says:

        Corporations pay taxes? Do they? Can they be made to pay taxes? I have a quote from, of all people, George Will.

        “Corporations do not pay taxes, they collect them, passing the burden to consumers as a cost of production. A corporate taxation is a feast of rent-seeking–a cornucopia of credits, exemptions and other subsidies conferred by the political class on favored, and grateful, corporations”.

        For once, in a George Will column we see the truth. Individuals pay taxes. Corporate taxes are smoke and mirrors to cover taxes charged to ordinary Americans–you pay them–they collect them. That’s not necessarily bad, taxes have to be paid, we need a civilized society. The point is there is no such thing as corporate taxation. There is no way to make corporations pay taxes without setting up a huge unsustainable bureaucracy to check every sale or business deal. So to all of those out there harranging about corporate taxes, get real, you are fighting windmills.

      • John Barker says:

        Corporations pay taxes? Do they? Can they be made to pay taxes? I have a quote from, of all people, George Will.

        “Corporations do not pay taxes, they collect them, passing the burden to consumers as a cost of production. And corporate taxation is a feast of rent-seeking–a cornucopia of credits, exemptions and other subsidies conferred by the political class on favored, and grateful, corporations”.

        For once, in a George Will column we see the truth. Individuals pay taxes. Corporate taxes are smoke and mirrors to cover taxes charged to ordinary Americans–you pay them–they collect them. That’s not necessarily bad, taxes have to be paid, we need a civilized society. The point is there is no such thing as corporate taxation. There is no way to make corporations pay taxes without setting up a huge unsustainable bureaucracy to check every sale or business deal. So to all of those out there harranging about corporate taxes, get real, you are fighting windmills.

  4. Rodney Hytonen says:

    (Beebe writes:) “6. There shall be no federal tax on corporations or other business entities.”

    Is this a joke? Or a scam to gather saleable email addresses….

    ALERT! VIOLATION OF TOS?

    (and btw – “stick it to the rich because they can afford it”
    is PRECISELY what the Founding Fathers intended taxation to be, becaue the working classes -in those days, farmers, COULD NOT -and they still can’t, without the rich paying proprotionally to their wealth.)

    “”The rich alone use imported articles, and on these alone the
    whole taxes of the General Government are levied…
    Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his
    earnings.” –Thomas Jefferson to Thaddeus Kosciusko, 1811.”

  5. Peter Brandt-Sorheim says:

    Thieves, liars, and Republicans! It seems we have returned to the culture of “The devil take the hindmost!” (an independent in the district of former Congressman Chris Lee)

  6. Smart doctor says:

    Why not cut out the middleman insurance companies which siphon funds away from healthcare and use those funds to insure everyone in the nation with a single payer system and allow doctors hospital to compete capitallistically bases on outcomes. Single payer could also bid on a drug formulary forcing the price of drugs down to what the rest of the world pays for thir mess. Single payer with an integrated emr and billing system would allow for instant recognition of fraud as well as outcome revelations.

    • otherdoc says:

      emr has been done very poorly. Integration is the key, and will take the feds or national health plan to establish a system that talks. A better plan would be to integrate all pharmacies and physicians (a national e-script plan) that way any doctor could access a med list; followed by integration of all radiologic facilities with all hospitals and physicians with the goal of decreasing repeated tests. And finally a national EKG access plan, that we may always have EKG comparisons available at a moments notice. Currently emr is useful intra facility and for insurance companies and research only. It is useful after the fact, not during the visit (unless it is intra connected).

  7. Arthur Wirsing says:

    My God.. Is it not enough that our elected political leaders get bombarded with special interest lobby money from all different industries?? We know whose side the Republicans and Conservatives are.. Big Corporate.. Look at the attempts the administration made in health care and finance reform!! And now they want to turn over Medicare’s zillions of dollars to the private insurance industry so they can “take care” of our elderly? One only has to look at the past record of this industry and their brutal deeds done in the attempt to secure “profit” for their stockholders to understand that giving a “voucher” to grandma and grandpa is so wrong. Single Payer “Nationalized” healthcare is the best answer.

  8. Robert Shorin says:

    America’s “corporate mentality” has taken over our values so that we use financial expenditures as the sole criteria for the provision of human services, and profits for evaluating the success of a program. Even in business this is not wise, but in providing for the needs of the people, it is self-defeating and damaging. Just think of what would have happened if our Social Security system was run by prvate enterprise during recent stock market crashes. The social security stockholders would be left “holding the bag” while the traders would continue to make money and corporate executives would give themselves obscenely high compensation for jobs that were NOT well done. One would have to be caught up in a delusion, and deny the facts of reality, to think that Social Security could be both privately run and be successful. The bi-partisan Congressional Budget Office has described our Social Security progam as being exceptionally well run. If we stopped borrowing money from it for other purposes, there would be no need for even minor modifications in the future.

  9. Bob Marston says:

    Hmmmmm…..Interesting The alarmist tenor of this piece compelled me to do a little bit of digging. And it didn’t take much to surface the rat ! Although the story was published by AP it was actually written by Ricardo Alonso-Zaldivar of the Huffington Post which explains the emotional pitch in the piece.

    Let’s get something straight.

    No legislation will be signed into law over the next 2 Years without alot of Democrats going along with it. Specifically, at least 12 Senators and a Signature from the guy residing at 1600 Pennslyvannia Avenue. And if he Vetos the legislation 48 Democrats in the House of Representatives will have to jump ship in order to override that veto.

    Whipping up unbridled fear and hysteria serves no constructive purpose. As a matter of fact it what it does do is distract us from building The Movement. Legislatively this edition of “As The Healthcare Legislation Turns” is out of our control. There is a very high likelihood that The Individual Mandate will be struck down in the courts thus precipitating the implosion of Obamacare. With the economy still flat on it’s back it is very unlikely the Obama Adiminstration will spend any more time and political capital on this issue for the remainder of its current term.

    Now is the time get people to sign your cards and organize meetings in order to educate them. Needless to say this turn of events will deepen the current Healthcare Crisis thus forcing Congress to revisit the issue. The question for us is will we be better prepared for the next round when it comes ? The answer to that question is up to you !

  10. Jerry Kann says:

    The heart of this story is in the very first paragraph: (Republican) House Budget Committee chair Paul Ryan’s “idea to replace Medicare with a fixed payment to buy a private medical plan…” The key word is “private.” We might substitute the word “corporate.” It amounts to the same thing.

    Where do you think Ryan got the idea? From Barack Obama and the Democrats.

    The key to the healthcare bill that passed Congress last year was the individual mandate. Tens of millions of Americans, starting in 2013, will have to pay for a private health insurance plan–unless there’s a rebellion against the plan. But if that does not happen, gigantic private insurance companies, already enormously powerful and drowning in profits, will become even more rich and powerful. They’re laughing all the way to the bank. They probably can’t believe how easy it’s been to rip off millions and millions of people.

    That atrocity of injustice came from Obama and the Democrats last year. Now come the House Republicans to do their part.

    Democrats will try to spin this story as the wicked corporate Republicans beating up on the good, kind, humane Democrats. This is nonsense. **Both** major parties are shilling for the insurance companies and selling out the vast majority of people in this country.

    Supporters of Healthcare-NOW! need to take a principled stand for Single Payer and blow the whistle on **both** the R’s and the D’s and not fall for the ludicrous story that the one party is made up of good guys and the other of bad guys. It’s obvious they’re **both** enemies of the people.

  11. Banes says:

    As the aging population continues its exponential growth and the finances required for this are “profitized”, it becomes more likely that the Republicans will turn to euthanasia once they recognize its tremendous monetary potential.
    Is not the absence of gun control an example of a mechanism of population control, no matter how perverse?

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