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Ways and Means Committee Explores the Ryan Budget’s Plan for Medicare

May 4, 2012—The House Ways and Means Committee April 27 held a hearing on the House-passed budget proposal’s plan to convert Medicare into a “premium support” model based on the plan introduced by House Budget Chair Paul Ryan (R-Wis.) and Senator Ron Wyden (D-Ore.).  The “premium support” proposal would provide seniors with a subsidy to purchase their health insurance through an exchange where both private plans and traditional Medicare would compete to bring down cost. The hearing’s goal was to highlight different bipartisan proposals that support a “premium support” model.

In his opening statement, Ways and Means Health Subcommittee Chair Wally Herger (R-Calif.) refuted the notion that Republicans do not support the Medicare program; however, he also said, “The Medicare program is in dire need of reform and improvement so that it meets the health care needs of its beneficiaries in the 21st Century…. Medicare’s antiquated design also inhibits care coordination, incentivizes overuse, and has led to financial challenges throughout Medicare’s history.” He continued, “Simply hoping to make the Medicare program solvent by cutting payments to providers is unrealistic….Instead, we should examine reforms that will protect and improve the Medicare program, and Premium Support is one way to do that.”

Ranking Member Pete Stark (D-Calif.) disagreed that the proposals in the Republican budget were bipartisan, and said in his opening remarks, “My Republican colleagues don’t like the sound of the word ‘voucher’ to describe their plan—so they’re cloaking it behind the term, ‘premium support.’ They also dislike being the sole owners of this proposal which is why they’re holding this hearing today. They want to share the blame.” He continued, “The only Democrat I’ve heard saying nice things about premium support these days is Senator Ron Wyden. Yet even he quickly disavowed the Ryan Budget earlier this year saying, ‘I didn’t write it and I can’t imagine a scenario where I would vote for it.”’

Witnesses included both Democrats and Republicans who have supported various forms of “premium support” models. Former Federal Reserve Vice Chair and White House Budget Director Alice Rivlin, Ph.D, testified that the Domenici-Rivlin Proposal is very similar to the plan included in the Ryan budget, but pointed out that the two differences are “Ryan-Wyden would phase in more slowly starting in 2022 and would only apply to new beneficiaries, while we would start in 2018 or even sooner. Ryan-Wyden also is more flexible about what would happen if the cap were breached, suggesting that Congress might choose among various kinds of reductions in provider payments in addition to the means-tested premium increase in our proposal.”

Additional witnessed included: former U.S. Senator John B. Breaux; John R. Antos, Ph.D, Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute; and Henry J. Aaron, Ph.D., senior fellow, economic studies, Brookings Institution.


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


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Jason Kleinman
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Telephone: 202-903-0806