Medicare has often stood as the elephant in the room in federal budget discussions.
Now, as budget discussions head toward a showdown, the government health insurance program is consuming much of the political spotlight.
Medicare gained top-shelf attention earlier this year when U.S. Rep. Paul Ryan (R-Wis.) introduced his plan to cut the deficit. Ryan’s budget proposal would gradually transform Medicare from a government-run system that pays seniors’ medical bills into a system under which beneficiaries buy insurance plans subsidized by the federal government.
Under the Ryan plan, approved by the GOP-controlled House in April, people who are covered by Medicare would begin receiving a set amount of money, starting in 2022, to offset the cost of buying a private insurance plan.
This week, the House budget proposal, including the Ryan Medicare plan, may get a vote in the Democratic-controlled Senate. A national poll was released Monday on Medicare. And Medicare has reverberated in the 2012 presidential campaign.
The program covers roughly 47 million Americans — people 65 and older and the disabled. That total includes more than 1 million Georgians. The program’s price tag keeps mounting, with a cost of more than $500 billion in annual federal spending.
Not only is Medicare a big factor in the budget, but it’s also a heavyweight political issue because of seniors’ voting power.
Democratic leaders oppose the Ryan plan, and they have tried to turn it to their political advantage by launching a nationwide attack on it. They say seniors would pay much more out of pocket for Medicare coverage under the Ryan transformation.
AARP, the powerful advocacy organization for seniors, opposes the Ryan changes, too.
The new state director of AARP Georgia, Pamela Roshell, said Monday that the Ryan plan places arbitrary limits on spending for Medicare. The plan ‘’would require across-the-board spending cuts to Medicare,’’ Roshell said.
‘’We think it’s cost-shifting’’ to seniors, she said.
Experts see crisis, but does public?
In a new poll released Monday, more than half of Americans (54 percent) said it’s possible to balance the budget without cutting spending for Medicare. Fifty-nine percent said the same about Social Security.
Medicare is difficult to fix because the cost of modern medicine is going up faster than the overall cost of living, outpacing economic growth as well as tax revenues, the Associated Press pointed out, in a story on the AP GfK poll.
“Medicare is an incredibly complex area,” former U.S. Sen. Judd Gregg (R-N.H.), who chaired the Budget Committee from 2005 to 2007, told the AP. “It’s a matrix that is almost incomprehensible. Unlike Social Security, which has four or five moving parts, Medicare has hundreds of thousands. There is no single approach to Medicare, whereas with Social Security everyone knows where the problem is.”
Social Security and Medicare together account for about one-third of government spending, a share that will only grow, the AP said. The cost of retirement programs for an aging society is the most serious budget problem facing the nation, economic experts say.
On the deficit front, the United States reached its $14.3 trillion debt limit last week, and the Treasury Department says it can stave off a default until early August.
Roshell said AARP is concerned about the rising national debt. “We believe America needs to pay its bills.” AARP priorities on health care spending, she said, include targeting fraud and focusing on patient safety. The organization also supports provisions of the national health reform law that improve quality of care and will result in savings.
The baby boomer factor
Recently the Ryan plan took center stage in presidential politics. Former U.S. House Speaker Newt Gingrich, the former Georgia congressman who’s running for president, called Ryan’s Medicare proposal “right-wing social engineering.” Gingrich took his words back a few days later after drawing harsh criticism from conservatives. Gingrich also called Ryan to apologize for the comments, and said he would have voted for Ryan’s proposal if he were still in Congress.
Ryan, in an interview Sunday on “Meet the Press,” challenged the Democrats to specify what they would do about Medicare spending, Fox News reported. “We’re offering details,’’ he said.’’ “We have no partners on the other side of the aisle offering anything but misleading scare tactics.”
“Of course people are scared of entitlement reform,” Ryan said, “because every time you put entitlement reform out there, the other party uses it as a political weapon against you.”
U.S. Rep. Chris Van Hollen (D-Md.), also appearing on “Meet the Press,” suggested that one way to cut Medicare spending would be to lower the price the government pays for prescription drugs, Reuters reported. Van Hollen reiterated the Democratic contention that any debt-reduction plan would require higher taxes.
Overall, 72 percent of respondents in the poll said Medicare is “extremely” or “very” important to their financial security in retirement.
The poll showed that many Americans aren’t buying the idea that Medicare needs to be cut to balance the budget. Yet the basic arithmetic on Medicare suggests that something must be done to control spending.
After all, the first baby boomers are signing up for Medicare this year.