Medicare privatization? Not so fast, some lawmakers say

Paul Ryan holding up ACA alternative plan
Paul Ryan's Affordable Care Act replacement plan includes proposed Medicare reforms that would move the program to a premium-support model.

Congressional Democrats are gearing up to fight House Republicans’ plans to remake Medicare—and they may have help from across the aisle.

House Speaker Paul Ryan said less than a week after the election that any discussion about replacing the Affordable Care Act should include Medicare reform. His previously proposed ACA replacement plan suggested moving the program to a premium-support model, which gives beneficiaries subsidies to purchase health plans on an open market.

But critics of that plan say it would give seniors subsidies whose value won't keep up with inflation, according to the Associated Press. The suggestion has Democrats up in arms, with incoming Senate minority leader Chuck Schumer saying his party—and voters—will not respond favorably to Medicare privatization.

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Senate Republicans seem lukewarm about the idea, saying it’s not a top priority given everything else on the party’s agenda. "When you take a look at the menu, that's probably one of the last courses," Sen. Ron Johnson of Wisconsin told the AP. Senate Finance Committee head Orrin Hatch of Utah expressed similar reticence, telling Politico that “we’ll have to see.” Sen. Lamar Alexander went even further, saying “my advice to them would be, save Medicare for another day,” according to Reuters.

Ryan’s plan seems to have the support of Rep. Kevin Brady, R-Texas, who heads the House Ways and Means Committee. He told the AP that Democrats’ scare tactics regarding Medicare changes no longer work with voters, who know steps must be taken to keep the program solvent. The latest estimates from Medicare trustees project that the program’s hospital insurance trust fund will run out by 2028.

But Brady indicated Republicans will move cautiously in their reform efforts, saying he envisions lawmakers taking only small steps in 2017.

Meanwhile, a large coalition of healthcare organizations is urging (PDF) Congress to repeal the long-controversial Independent Payment Advisory Board, which is a part of the Affordable Care Act designed to make Medicare cuts if spending growth outpaces a set limit.

“More than 55 million seniors rely on Medicare for access to routine care as well as lifesaving and life-strengthening therapies. This is a lifeline that shouldn’t be in the hands of an unelected board or one individual,” said Healthcare Leadership Council President Mary Grealy. Medicare could hit its spending limit, triggering action from the board, as early as 2017, her group notes.

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