What Romney's Medicare Plan Actually Does


DC journos have spent much of the 2012 election trying to answer the question of how exactly a President Romney would governor. On one side, there are the skeptics who never bought into Romney’s rhetoric during the Republican nomination. They argue Romney is, at heart, still a moderate northeastern governor, a businessman unsuited for the extremism that has come to dominate his party. Others are equally convinced that Romney must be taken at face value. Sure he might have positioned himself in the middle while he governed a state dominated by Democrats, but he has spent the past five years running for president full-time, aligning himself with every right-wing whim over the course of his two campaigns. He’s the Republican who sought the endorsement of Ted Nugent, discarded a gay spokesman, and calls corporations people. Lest we forget, it was Romney who was poised to run as the right-wing challenger to John McCain and Rudy Giuliani in 2008 before Mike Huckabee swooped in to steal the evangelical vote.
The best measure to get at the real Romney is to read his actual proposals and ignore the standard posturing at campaign stops or TV interviews. These are the documents directed primarily at the obsessive political class, barely noticed by your average voter, thus freeing Romney to be closer to his true self. They’re probably the most important piece of evidence for any politician before an election. As Jonathan Bernstein has convincingly argued, presidential pledges should be taken at face value, as newly elected presidents are almost always constrained by the commitments they made during the campaign.
When weighed by this measure, Romney is undoubtably aligned with the far right-wing vision of his policy, particularly on budgetary and fiscal matters. He’s advocated not only for the extension of the Bush tax cuts, but has suggested even further reductions in the U.S. tax rate that would heavily benefit the wealthy. He’s endorsed the Paul Ryan budget wholesale, an Ayn Randian vision of the limited government that even Newt Gingrich termed “right wing social engineering” when it was initially introduced.
One of the key elements of the Ryan/Romney overlapping vision is how the government should handle the exploding costs of Medicare. The New York Times delved into Romney’s proposals in contrast with Obama’s in an article Tuesday. The piece unfortunately falls into the pitfalls of equivocating newspaper journalism, weighing both plans largely by the attacks poised by the opponent rather than independent descriptions of what each candidate is suggesting. Romney’s plan is introduced as “ending Medicare as we know it” in Obama’s words, while the article introduces the Affordable Care Act as such:
The president’s 2010 health care law, Mr. Romney says, “could lead to the rationing or denial of care for seniors,” as it will squeeze nearly a half-trillion dollars from the growth of Medicare over 10 years while putting the program’s future “in the hands of 15 unelected bureaucrats.”
Either side of the political divide can agree that Medicare is on a perilous path. Health care expenditures as a whole are eating up an increasingly large share of the country’s GDP, and the number of Medicare enrollees is set to jump as the Baby Boomers start to retire. The government has projected that by 2024 the Medicare fund will no longer be able to match the full cost of expected benefits.
This concern is one of the primary reasons Obama pushed health care reform early in his administration. Alongside the measures that make it easier for low and middle income Americans to purchase health insurance, the Affordable Care Act takes a first stab at tackling the looming problem. The bill included a variety of measures to incentivize cheaper, more effective health care to bring down costs throughout the health care market, along with a medical advisory board that will suggest best practices to keep the tab lower on Medicare. Meanwhile, Romney and Ryan's strategy is to largely ignore the general growing cost of health care, instead focusing on Medicare itself. They would turn Medicare into a premium support plan—essentially a voucher program that would shift the burden of health spending off the government ledger by forcing future retirees to spend far more of their own funds on health services. These vouchers would initially meet the value of buying insurance on the private market, but they would soon fall behind the actual cost for consumers if the general price of health care continues to rise unabated.
Romney has not yet released a proposal with all of the details, but it is safe to assume that his premium support plan would largely follow the model set forth by Ryan. Under that plan—which has already passed the Republican controlled House before it was blocked by Democrats in the Senate—all Medicare enrollees who enter the program beginning in 2023 would have to enter the voucher program, and, as the Center for Budget and Policy Priorities has highlighted, by 2050 Medicare expenditures would be 35 to 42 percent lower for each participant, primarily by shifting the cost burden onto enrollees rather than lowering the overall cost of the care they consume.

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