Ryan strikes Democrats with third plan for Medicare

A year after House Republicans misfired on their plan to overhaul Medicare, they’re going right back at it in the budget they proposed Tuesday, tweaking the details but signaling their willingness to engage in a political battle over entitlement reform — even in an election year.

It’s the third such GOP plan in the past month to try to change Medicare, and it runs smack into the White House and congressional Democrats, who say the GOP is tangling with an issue that will cost them votes in November.

The plan introduced Tuesday came from House Budget Committee Chairman Paul Ryan, who revised key elements of his Medicare plan from last year, but still proposes having the federal program compete with private plans and giving seniors a voucher to choose the plan they like.

“If we allow entitlement politics — fear that your adversaries will turn your reforms into a political weapon used against you, and we cow to that — then America is going to have a debt crisis,” the Wisconsin Republican said.

Medicare is the fastest-growing large entitlement program and could eclipse Social Security spending by 2040, far outstripping the funding sources Congress has dedicated to it.

All sides agree that it needs changes — a task that demands raising taxes, cutting benefits or some combination of the two. But Republicans and Democrats are struggling to find any common ground over how to make it sustainable.

Instead of doing away entirely with fee-for-service Medicare, as his plan suggested last year, Mr. Ryan proposes maintaining the traditional plan while allowing private plans to compete in an exchange where seniors could use vouchers to select from a number of options. Those currently younger than 55 would participate in the system starting in 2023, while the plan wouldn’t change things for current seniors.

Mr. Ryan unveiled the plan in December along with Sen. Ron Wyden, Oregon Democrat, and on Tuesday he included it in his 2013 budget proposal, on which he will ask his House colleagues to vote.

Other Republicans also have tried to tackle the issue, though those plans — one led by Sen. Tom Coburn of Oklahoma, and another last week by four Republican senators, led by Sen. Rand Paul of Kentucky — have yet to win any Democratic backing.

A major difference is over how much to cut Medicare spending, with Mr. Ryan proposing spending $205 billion less on the entitlement program over 10 years than what President Obama had suggested. Mr. Ryan’s plan would hold Medicare spending to 4.75 percent of gross domestic product by 2050, down from the likely scenario of 7.25 percent projected by the Congressional Budget Office.

Mr. Obama, in his 2013 budget, proposed cutting $267 billion from Medicare over a decade.

Another key sticking point is how to curb Medicare costs. Republicans argue that they have a better strategy than Democrats.

In Mr. Ryan’s vision, plans in the new exchange would compete annually to determine the dollar amount of the subsidy seniors could use to purchase coverage, with the second least expensive private plan or fee-for-service Medicare — whichever is cheaper — to be used as a benchmark.

If seniors chose a more expensive plan, they would be responsible for paying the difference, while those selecting a less-expensive plan would be awarded a rebate. Growth would be capped at GDP plus 0.5 percent in case the bidding failed to contain costs.

Democrats blasted the plan, saying it would shift costs to seniors.

“Instead of strengthening Medicare, the House budget would end Medicare as we know it, turning the guarantee of retirement security into a voucher that will shift higher and higher costs to seniors over time,” White House spokesman Dan Pfeiffer said.

House Minority Leader Nancy Pelosi, California Democrat, said Mr. Ryan’s plan would let Medicare “wither on the vine” and vowed that Democrats would defeat it.

“The American people have already rejected this plan before, and this year will be no different,” Mrs. Pelosi said. “Americans’ priorities are clear: Republicans must work with Democrats to preserve and strengthen Medicare, not dismantle it.”

But Republicans predict that the approach taken under Mr. Obama’s health care law will severely undercut the program, pushing doctors out of Medicare by cutting their payments. Under the law, appointed members of the Independent Payment Advisory Board will recommend cuts to keep costs in check — an approach Republicans say gives unelected appointees too much power.

“It doesn’t make any difference what you call it, the fact of the matter is, the board is in place that will deny payment for services to seniors,” said Rep. Tom Price, Georgia Republican. “Seniors know that’s wrong.”

Tremors also have been coming from the Senate in recent weeks, indicating that Republicans intend to put Medicare front and center this year.

Sens. Richard Burr, North Carolina Republican, and Tom Coburn, Oklahoma Republican, introduced Medicare reform in February that is similar to the Ryan plan, although it would speed up implementing the competitive bidding and premium supports to 2016.

Last week, Mr. Paul, along with fellow Republican Sens. Mike Lee of Utah and Jim DeMint and Lindsey Graham, both of South Carolina, introduced a plan to end the traditional fee-for-service and enroll seniors in the same health care program used by federal employees while gradually raising the eligibility age. Depending on their income levels, seniors would receive subsidies covering up to 75 percent of their plans.