Preserving the Medicare Guarantee: Why I've Been Working with Paul Ryan
(Note: This blog was originally posted by Senator Wyden on Huffington Post.)
People on both sides of the aisle want to know why a progressive Democrat is working with the author of last year's House Budget on Medicare reform. Here's why:
When I was 27 years old, I organized legal aid clinics to help low-income seniors. It was a life-altering experience. I'd be invited into someone's home and after coffee and a few stories about the grandkids or the Great Depression, my host would reluctantly pull out a shoebox, swallow his or her pride and ask for my help.
The shoebox would be full of supplemental Medicare insurance policies. Often there were more than 10 separate policies. These policies were supposed to cover the benefits, co-pays and deductibles that Medicare didn't, but most weren't worth the paper they were printed on. Unscrupulous insurance agents would prey on a senior's health concerns and fear of being a burden on loved ones in order to extract monthly payments often for multiple policies that offered benefits that the senior already had, didn't need and usually couldn't afford.
The victims of these scams -- seniors who had lived through two world wars -- would look at me with shame in their eyes and tell me that they should have known better.
Stopping those insurance rip-offs was one of the reasons I ran for Congress.
Fighting for Seniors
It took a little over a decade to build a coalition strong enough to beat the insurance companies, but in 1990, then Senator Tom Daschle and I passed a law regulating the private market for supplemental Medicare insurance policies. We created benefitstandards so that seniors would know exactly what they were signing up for and we imposed heavy fines on anyone who took advantage of seniors. That Medigap law is still the model for consumer protection today.
I didn't stop fighting for seniors there. In the early 1990s then Representative Olympia Snowe and I were among the first to propose bipartisan legislation to add a prescription drug benefit to Medicare. When a Medicare Prescription Drug benefit was ultimately added to Medicare, Senator Snowe and I began pressing for legislation that would empower Medicare to use its market power to negotiate the best prices for seniors.
Congressman Ed Markey and I authored a law to create Medicare's first home-based health program for seniors with chronic illnesses. I've written and passed laws to give Medicare beneficiaries access to life saving cancer drugs and to ensure that seniors don't have to give up the prospect of a cure when they go into hospice care. The Department of Health and Human Services recently reported that -- thanks in part to a reform I authored in the Affordable Care Act -- Medicare Advantage premiums are down, enrollment is up and more and more seniors have quality health coverage.
In just the last year, I have introduced legislation to expand a senior's choice of mental health professionals, reduce Medicare fraud and bring transparency to Medicare payments. I also authored a discussion paper with Chairman Paul Ryan exploring ways in which Democrats and Republicans might work together to ensure a sound future for Medicare.
The Medicare Guarantee is at Risk
I know that polls show that the majority of Americans like Medicare the way it is today. But don't let that number confuse what's at stake: unless Congress enacts meaningful Medicare reform in the near future, seniors will be faced with inevitable cost-shifting and eventual benefit cuts until Medicare doesn't look anything like the program does today.
The Congressional Budget Office projects that the Medicare Hospital Trust Fund will be out of money by 2022. And as MedPac explained in its report to Congress last year, Congress's continued inability to come up with a long-term solution for Medicare's reimbursement rate for doctors "is undermining confidence in the Medicare program."
Last year, Congress passed a mere 60-day extension of Medicare physician pay rates in order to avoid asking doctors to swallow a 27.4 percent cut to Medicare physician pay. Although a 'deal' was eventually reached to pay doctors for their services through the end of this year, chronic payment uncertainty and already low reimbursement rates are forcing more and more doctors to consider dropping or limiting the number of Medicare patients they are willing to treat. This is a significant problem given that retiring Baby-Boomers are no longer a theoretical problem. Starting this year, an average of 10,000 Americans will enroll in Medicare each day for the next 20 years.
The Medicare Guarantee is Our Nation's Most Solemn Promise
I believe the most important aspect of Medicare is not the structure of the program but the guarantee to all Americans that they will have high quality health care as they get older. I will always fight to protect traditional Medicare, but in my mind, what makes Medicare so important is its guarantee. It is one of our nation's most solemn promises and history has shown what can happen when it doesn't exist.
Before Congress created Medicare in 1965, more than 50 percent of American seniors didn't have health insurance, mostly because of its unaffordable cost. It was not uncommon for the sick elderly to be treated like second class citizens, and as a result, many aging Americans without family to care for them, ended up destitute without necessary health care, or on the street. It was a disgraceful time in our nation's history; we must take steps to ensure that it never happens again.
Traditional Medicare Doesn't Work the Same for Everyone
Contrary to popular belief, every Medicare beneficiary is not currently enrolled in Medicare's government-administered health insurance plan. In Oregon, for example, 56 percent of seniors currently get all or some of their health coverage from a private plan. (15 percent of Oregon seniors purchase private Medigap policies to supplement their traditional Medicare, while 41 percent of Oregon's Medicare beneficiaries are enrolled in private health insurance plans through Medicare Advantage.) It is worth noting that many Medicare Advantage plans in Oregon save money over traditional fee-for-service Medicare.
While most seniors are very happy with the Medicare benefits that they get from the government, it is important to remember that Medicare isn't perfect and doesn't work the same for everyone.
For example, traditional Medicare does not offer catastrophic coverage or dental benefits. To get those options, seniors have to pay for supplemental private insurance. While many private plans offer the option of prescription coverage as part of their insurance packages, under traditional Medicare, seniors have to sign up for those benefits separately. While some seniors like the freedom Medicare gives them to find and choose their own participating doctors, some prefer an integrated private health plan that has identified a network of doctors, testing facilities and pharmacies that work together, collaboratively on the needs of their enrollees.
And again, just because you are enrolled in Medicare's government-administered option does not mean that you are guaranteed to find a doctor willing to take on new Medicare patients. Seniors in historically-low reimbursement states like Oregon have long had difficulty finding doctors and more and more seniors in other parts of the country are starting to encounter this problem. For this reason, many seniors in Oregon have been grateful to learn that Medicare gave them the option of enrolling in a private plan.
Finally, Medicare's copays and deductibles are not insignificant for a senior living on a fixed income, regardless of plan choice. While Americans under the age of 65 pay an average of 3 percent of their total income on health care, Americans over the age of 65 are spending 16 percent of their total income on their health needs. It is projected that by 2020, that number will reach 26 percent. With nearly 62 percent of seniors living on incomes of less than $30,000 annually, this is particularly worrisome no matter what it says on a beneficiary's Medicare card.
Not All Plans that Include Private Insurance Choices are Created Equal
While allowing seniors to choose between traditional Medicare and privately-administered health plans would not "end Medicare as we know it," (since this choice already exists in Medicare) changing the program in a way that would undermine or end the Medicare Guarantee certainly deserves that description.
There is no question in my mind that last year's House Republican Budget would have ended the Medicare Guarantee, that is why I voted against it. Not only did the Republican plan eliminate Medicare's traditional government-administered insurance program, it failed to include tough consumer protections for seniors. The vouchers it would have given seniors to purchase health insurance weren't guaranteed to cover the cost of health insurance over time. Seniors aren't guaranteed to have health insurance if affordability isn't guaranteed as well.
Voters would be right to consider their representative's vote on that budget as an indication of their representative's commitment to the Medicare Guarantee. Put simply, if you want to be sure that your Member of Congress will not vote to end the Medicare Guarantee in the future, you would probably be better off with a representative who didn't vote to end it in the past.
But doing nothing is also a direct threat to the Medicare Guarantee. Congress must pass meaningful reform within the next few years and since it is highly unlikely that Democrats are going to win a super majority of seats in both the House and the Senate this year, the only way to pass legislation upholding the Guarantee is for Democrats and Republicans to work together. To protect Medicare, we have to get the dangerous ideas off the table and start looking for solutions that will ensure that seniors will always be able to get the care they need.
This is why I started talking to Paul Ryan about Medicare.
What Wyden-Ryan Really Says
There have been a lot of mischaracterizations. So, let's be clear about what the Wyden-Ryan plans really says.
Wyden-Ryan doesn't eliminate the traditional Medicare plan, instead it guarantees that seniors who want to enroll in Medicare's traditional fee for service plan will always have that option.
Wyden-Ryan doesn't privatize Medicare because Medicare beneficiaries already have the option of enrolling in private health insurance plans. Wyden-Ryan makes those private plans more robust and accountable by forcing them to -- for the first time -- compete directly with traditional Medicare.
Wyden-Ryan protects the purchasing power of traditional Medicare and private sector innovation to make both types of Medicare stronger and more senior-friendly. All participating private plans will be required to offer benefits that are at least as comprehensive as traditional Medicare and any plan that is found taking advantage of seniors or providing inadequate care will be kicked out of the system. Cherry picking healthier seniors will be made unprofitable by a robust risk-adjustment mechanism and policed by the Medicare administrators.
Wyden-Ryan would also uphold the Medicare Guarantee by ensuring that seniors will always be able to afford their health benefits. Unlike a voucher program that would give seniors a fixed amount of money to purchase health plans, Wyden-Ryan would adjust premium support payments each year to reflect the actual cost of health insurance premiums. In addition, low-income seniors, including dual-eligibles will receive additional benefits to cover out-of-pocket costs -- ensuring that seniors have the same choices regardless of income. Yes, if private plans are able to devise a way to provide the same health benefits as traditional Medicare for less money, a senior might have to pay extra if he or she still wants to enroll in the government option. But if you could get the exact same benefits for less money, why would you want to pay more?
Beyond that, Wyden-Ryan creates a catastrophic benefit that does not exist in traditional Medicare, ensuring that no senior is bankrupted by a major illness.
Finally, Wyden-Ryan isn't a piece of legislation. It does not include legislative language or specifications detailing exactly how the system would work. If Wyden-Ryan or something like Wyden-Ryan gets to the legislative stage, those specifications will be important to get right, as the devil is always in the details. Right now, however, Wyden-Ryan is simply a policy paper intended to start a conversation about how Democrats and Republicans might work together to uphold the Medicare Guarantee.
Using Wyden-Ryan for Political Cover Harms Seniors
Yes, just as some in my party criticize Wyden-Ryan without knowing what the plan really does, some Republicans will undoubtedly declare their support for Wyden-Ryan without knowing what that means or believing in its principles. Mitt Romney, for example, claims to have helped write Wyden-Ryan even though I have never spoken to him about Medicare reform and have yet to hear him declare that there should always be a role for traditional government-run Medicare.
Those who say they support Wyden-Ryan simply for political cover are neither helping seniors nor being bipartisan. Rather, using Wyden-Ryan for political purposes harms seniors by making a bipartisan agreement to uphold the Medicare Guarantee that much harder. Anyone who does this deserves to be called out on it.
However, by that same token, those of us who care about the Medicare Guarantee shouldn't discourage Republicans from working in a bipartisan way to preserve the program in the future. Even though it might blunt some political attacks, we should be encouraging Republicans to take dangerous reforms off the table and pledge their support for Medicare. Just as we should be working to educate our conservative colleagues about the importance of a program many of them clearly don't understand. The upcoming election is important, but after the election, we're going to have to pass Medicare reform and that is going to require us to work together.
This week, Congressman Ryan will be unveiling the House Republican Budget. I do not know what the details of the budget will be. I didn't write it and I can't imagine a scenario where I would vote for it. I do know, however, that because we worked together, Paul Ryan now knows more about the Medicare Guarantee and protecting seniors from unscrupulous insurance practices than he did before. If that is reflected in his budget this year, as someone who has been fighting for seniors since he was 27 years old, I think that's a step in the right direction.