At the Democratic National Convention Tuesday night, the White House dispatched its top health official to make the case against the Romney-Ryan plan to convert Medicare into a voucher-like system.
But Health and Human Services Secretary Kathleen Sebelius attacked the plan with a claim based on an outmoded analysis.
“What’s missing from the Romney-Ryan plan for Medicare is Medicare,” she told the Charlotte, N.C. crowd. “Instead of the Medicare guarantee, Republicans would give seniors a voucher that limits what is covered, costing seniors as much as $6,400 more a year.”
It’s not a new claim. The Obama campaign invoked the same figure last week:
FACT: The Romney-Ryan plan to turn Medicare into a voucher system could force new retirees to pay up to $6,400 more a year for health care.
— Barack Obama (@BarackObama) August 30, 2012
It’s misleading — or at best unsubstantiated. The figure is based on the Congressional Budget Office’s scoring of Paul Ryan’s Medicare plan released in 2011. It does not apply to his less harsh 2012 Medicare blueprint — which mirrors the Romney campaign’s plan.
The key differences between the two approaches: the 2011 Ryan plan phases out traditional Medicare entirely, beginning in 10 years, and provides private insurance vouchers that grow at the rate of inflation — lower than typical health care cost growth. Romney’s 2012 plan, by contrast, sustains traditional Medicare as a government-run insurance option and pegs the value of the vouchers to the price of the second cheapest policy in the system. That is its common thread with Ryan’s 2012 plan, which also caps program growth below GDP+0.5. It’s unclear who bears the costs if insurer bids exceed the growth cap.
In the long-run, seniors are likely to pay more for Medicare under Romney-Ryan. But conveniently for them, their current plan — which unwinds the coverage guarantee — is structured in a way that leaves CBO unable to project how much more seniors might pay.
“The restraints on Medicare spending could lead to reduced access to health care; diminished quality of care for Medicare beneficiaries; greater efficiency of health care delivery; less investment in new, high-cost technologies; or some combination of those outcomes,” the budget office concluded of Ryan’s plan released in 2012. “CBO does not have the capability at this time to estimate effects.”
Sahil Kapur
Sahil Kapur is a congressional reporter for TPM. He previously covered politics and public policy for numerous publications including The Guardian and The Huffington Post. He can be reached at sahil [at] talkingpointsmemo.com.
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