Can Anyone Out There Vouch for the GOP Voucher Program?
In this heated 2012 election, Medicare has been a major talking point for both parties. Each touts their own plan while demonizing the opposition, making it very confusing for voters caught in the middle. When your own health care is on the line, it’s difficult to see through the rhetoric and understand the real consequences for your own future.
The Democratic Party has warned that a Romney Presidency will transform Medicare into an expensive voucher program. The term has been floated for months, ever since Romney appointed Paul Ryan as his running mate, promoting Ryan’s highly conservative budget. Obama’s team has claimed that Ryan’s plan would cause seniors to pay thousands more per year for basic Medicare; during the vice-presidential debates, VP Joe Biden said that the Republicans would eliminate the guarantee of Medicare. But what exactly is this voucher program? If Romney took the White House, what would it actually mean for seniors?
A Plan By Any Other Name
If you ask a Republican about their Medicare plan, you won’t hear the v-word anytime soon. The GOP prefers the term “premium support” to “voucher,” but no matter what you call it, the concept fundamentally alters the payment structure of Medicare. Under the current system, hospital and physician fees are paid for directly from the federal government. It is a defined-benefit plan, structured around the provided services rather than the contributed money. Medicare is guaranteed, insofar as you will definitely receive benefits when you turn 65, and those services are not altered based on a monetary sum you must pay.
Unfortunately, traditional Medicare is fraught with issues. When the program was first created in 1965, it only covered Part A insurance for hospital stays, inpatient procedures, and medical devices. As the average American lifespan has increased and the needs of seniors have changed, Medicare has tried to change with it; however, the basic guaranteed benefits are so lacking that an entire industry has popped up to help fill in the gaps. While the basic government program is a good start, it has some serious holes that must be patched with private plans.
Under the Romney-Ryan plan, this would change. Medicare would become much more like a private, defined-contribution plan. Rather than pay the fees for services rendered, the government would offer Medicare beneficiaries a fixed sum of money, intended to subsidize the cost of purchasing a private plan. This subsidy is the much-maligned voucher; using these government credits, recipients would choose between plans in a competitive marketplace. The insurance companies would have to comply with federal standards for these plans—at minimum, they would have to provide coverage that roughly compares to basic Medicare.
It’s difficult to say whether this plan would work in the long term. Proponents claim that it would provide seniors with a range of choices, streamlining the process and avoiding confusion about Medigap and supplemental plans. However, there are no guarantees that Romney would maintain the Medicare guarantee, or that the private companies would keep costs down over the long run. The basic voucher may not reduce out-of-pocket costs for seniors, and could restrict their health care choices at a time when they need them most. And if the traditional healthcare system is any indication, competition alone is not a good incentive for insurers to keep rates down.
Whatever the outcome of this year’s election, Medicare is in for some changes—and changes are necessary to prolong the life of the program. The fundamental differences between the two political parties lie in the methods of change, and the reliance on the private or public sector. Neither party is perfect; however, the media spin and hype in this election cycle has proven the importance of seeking the truth and knowing the facts before you head into the polls. It’s not just about red versus blue; it’s about your health, your values, and the best plan for America’s future as a whole.