Proposal calls for quicker move to Medicare reform

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Politics,Beltway Confidential,Philip Klein

This week, Sens. Tom Coburn, R-Okla., and Richard Burr, R-N.C., offered the latest plan to reform Medicare. Among its many ideas, it would transition the program to a "premium support" system in which beneficiaries can use their Medicare subsidies to choose among private plans and traditional Medicare -- but sonner than in other similar plans.

It's worth backing up a bit. Last year, Rep. Paul Ryan, R-Wis., released a Medicare plan as part of a Republican budget that moved toward a premium support model. But in the original proposal, the only options were privately administered. In December, he released a modified version of the plan with Sen. Ron Wyden, D-Ore., that preserved traditional Medicare as an option. But both plans waited a decade to transition into this new system. Under Coburn-Burr's proposal, known as the Seniors' Choice Act, that change would start earlier, in 2016. I think that's an improvement.

As I wrote when Wyden-Ryan came out, I'm skeptical of any proposal that preserves traditional Medicare as an option, because I question whether there could ever be a truly level playing field when one of the plans is government-backed. But if a proposal is going to keep traditional Medicare as an option anyway, it would be a lot better if that transition occured sooner rather than later.

Ryan is set to release the new Republican budget by early April, and it will include a Medicare reform proposal.

When I asked spokesman Conor Sweeney what Ryan thought about speeding up the transition to a premium support model, he said the Budget Committee Chairman was "open and eager" to discuss any ideas to move the ball forward on Medicare reform. He cited the proposal as more evidence of a growing momentum behind the idea of introducing individual choices to Medicare, as opposed to embracing President Obama's vision of having an unelected board make cost-cutting decisions.

Beyond premium support, Coburn-Burr plan also builds off a collaboration by Coburn and Sen. Joe Lieberman, I-Conn. It would gradually raise the retirement age and ask wealthier seniors to pay more, among other ideas.

There's no estimate of the plan by the Congressional Budget Office, but Coburn and Burr say it would conservatively save between $200 billion and $500 billion over the next decade, though that could be much higher if the competitive reforms, which are harder to make projections on, work as expected. Ultimately, the true goal is to put the system on a sustainable fiscal path over time.

For a bullish take on Coburn-Burr, check out Avik Roy, who declared it the best one yet.

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