Despite Public Sentiment, House GOP Moving Ahead With Medicare "Premium Support"

A recent Kaiser Family Foundation survey found 70% of Americans prefer that Medicare's benefit structure remain intact.
Published Online: August 10, 2015
Mary K. Caffrey
House Republicans are making plans for an ambitious Medicare overhaul after the 2016 elections, the National Journal reported today, which would include the long-discussed change to “premium support,” which Democrats deride as a voucher plan.

US Representative Kevin Brady, the Texas Republican who chairs the House Ways and Means Health subcommittee, said the tough work of drafting language for changes to Medicare would get under way now in time for introduction in early 2017, when Republicans hope they will no longer be dealing with divided government.

Republicans hope to achieve 2 goals at that time: first, they seek to combine Medicare Part A and B into a single umbrella with 1 deductible and an out-of-pocket spending cap, something that President Obama has said he is willing to discuss now.

But Democrats have resisted the other long-term GOP goal for moving Medicare into the private sector. This element of “premium support” calls for giving seniors a set amount of money to use to shop for a private health plan. Some favor leaving traditional Medicare as an option, but others do not.

The change from traditional Medicare, a “defined benefit” plan that outlines what will be covered, vs premium support, which is a “defined contribution” plan that only states what the government will pay, would be the most fundamental shift in coverage for seniors since the program began 50 years ago. How this would be permitted alongside the Affordable Care Act, which outlines a set of essential health benefits is unclear.

The House GOP subcommittee is moving forward with bill crafting despite overwhelming opposition from the public to changing the fundamental structure of Medicare. A recent Kaiser Family Foundation health survey found that Americans overwhelming support the program as is, with 70% wanting to keep the current system of paying benefits intact. Only 26% supported a voucher-style program, and support for the current structure is shared among self-identified Republicans, Democrats, and independents.

According to the most recent report from Medicare’s trustees, the trust fund is on track to meet all obligations until 2030, when it will be able to meet 86% of its costs. However, that is an improvement of prior reports, as per-enrollee costs were declining. Much of the cost of Medicare came from prescription drugs, and both President Obama and HHS Secretary Sylvia Mathews Burwell have called for Congress to give the administration the power to use the size of the Medicare Part D to negotiate for better drug prices, as is the case in Medicaid.
 


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