A plan to get Medicare on a sound footing introduced by Republican Paul Ryan and Democrat Ron Wyden at least deserves serious discussion.
Few people would disagree that Medicare needs to be reformed. The costs of Medicare, driven by continuing increases in health care costs and facing the onrushing wave of retiring baby boomers, are spiraling out of control.
Even with cost-control and quality measures contained in the 2010 Affordable Care Act, unpopular with many seniors, Medicare is scheduled to run out of money in 2024, five years earlier than its trustees estimated a year ago. Long-range projections show the program accounting for a larger and larger part of federal expenditures. In short, it's not sustainable in its present form.
That's why we think the Medicare reform plan offered recently by Republican Paul Ryan and Democrat Ron Wyden deserves serious consideration — it's at least a start on tackling one of the country's most intractable financial problems.
Ryan, a U.S. representative from Wisconsin who is chairman of the House Budget Committee and senior member of the House Ways and Means Committee, was scourged earlier this year by Medicare proponents for his proposal that would have essentially privatized Medicare. Wyden, a U.S. senator from Oregon, has a history of proposals on health care, introducing the Healthy Americans Act with conservative Republican Sen. Bob Bennett of Utah in 2006.
While there are no shortage of proposals being floated to reform Medicare, which generally is available for people age 65 or older and younger people with disabilities, the Ryan-Wyden proposal at least has the benefit of being a bipartisan attempt to address an issue consumed by unyielding partisanship.
The Ryan-Wyden plan is similar to plans proposed by current GOP presidential candidate Mitt Romney, and former Senate Budget Committee Chairman Pete Domenici and former White House Budget Director and Federal Reserve Vice Chair Alice Rivlin.
Under the Ryan-Wyden plan, which would start in 2022, current beneficiaries and those close to retirement would be "grandfathered" in, as it were — they would get to remain in Medicare as it is now.
But the program would be changed for those 54 and younger. At 65, future retirees would have a choice between traditional Medicare and regulated private insurance plans, all competing to lower costs and provide quality care. Seniors would get a fixed amount to spend on a health plan, no matter which coverage they selected. Low-income, and older, sicker people would get more money. The plan would cap Medicare spending at 1 percent above GDP.
In introducing the plan in mid-December, Ryan and Wyden said they wanted to start a dialogue on Medicare. Of course, there was the usual immediate political reaction: a White House spokesman blasted the plan to overhaul Medicare, saying it would undermine the health care program for seniors and disabled people, leaving it to "wither on the vine."
Unfortunately, each side seems to be more interested in scoring political points against the other in anticipation of the 2012 election than in doing the hard work necessary to put the program on a sound financial footing. But make no mistake about it, out of necessity there will be big changes in Medicare no matter who wins the presidency or control of Congress in 2012. And with more than 1.5 million baby boomers a year signing up, the future of Medicare is one of the most important economic issues for anyone now 50 or older.
While the Ryan-Wyden plan is a starting point for discussion, the ultimate solution for getting Medicare on a sound footing may be even harder to attain: reducing ever-increasing health care costs by changing the fee-for-service payment system for doctors and health care providers.