THE NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY & MEDICARE
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February 16, 2012

NEWS RELEASE

Latest Medicare Voucher Plan Adopts Same Failed Privatization Strategy

then forces seniors, employers and states to pay the bill

Senators Tom Coburn (R-OK) and Richard Burr (R-NC) have doubled down on Congressman Ryan's voucher plan offering what appears to be the same failed privatization approach to Medicare reform that has been rejected by the majority of Americans. The Coburn/Burr legislation proposed today would:  provide seniors a voucher for their health care that could shift a growing share of Medicare costs to beneficiaries without reducing overall costs in the program, undermine traditional Medicare, leave millions of seniors without health coverage in retirement, and raise premiums for middle-class retirees.  The Coburn/Burr proposal forces these changes even earlier than the Ryan plan.

"This latest Medicare privatization scheme is nothing more than the GOP/Ryan plan on steroids.  Not only does it promise savings that most private insurers have never achieved in providing coverage to seniors, it also delays healthcare coverage to age 67, and raises premiums for millions of American retirees.  Budget hawks keep promising that private market competition will drive down costs yet history proves just the opposite. Private insurers offering Medicare Advantage plans have raked in billions of dollars in overpayments in the past decade and seniors, whether they participated in MA or not, paid for those subsidies with higher premiums.

This legislation would take us back to the days when America's aged and infirm were forced to find health insurance in a private marketplace that wouldn't serve them because it simply wasn't profitable.  We can continue to provide health coverage for our nation's retired workers without simply telling them 'here's a coupon, good luck'.  This is another flawed privatization model that makes no sense for seniors, taxpayers, or our nation." Max Richtman , NCPSSM President/CEO

The Coburn/Burr plan would end Medicare as we know it, replacing it with voucher plan designed to fundamentally change the way seniors' get access to health insurance:

• The Coburn/Burr proposal could actually increase Medicare costs because it expands private Medicare plans that cost an average of 10 percent more than what the same coverage cost in traditional Medicare.
  
• If younger retirees enter the new program and the oldest and sickest remain in traditional Medicare, the program will be faced with a pool of increasingly costly beneficiaries. Medicare spending would go up and seniors who remain in traditional Medicare would see their costs go up as well.

• Raising the Medicare eligibility age would save the federal government money, but it would increase the cost of health care for everyone else. Employers who provide health care coverage to their retirees would face higher costs as more 65- and 66-year olds received primary coverage through their employer rather than Medicare. State Medicaid programs , whose costs would rise as some of the people who lost Medicare coverage, would shift to Medicaid. Seniors who would lose Medicare coverage would also face higher out-of-pocket health care costs. Two-thirds of this group - 3.3 million people - would face an average of $2,200 more each year in premiums and cost-sharing charges.

• The number of Medicare beneficiaries subject to means-tested premiums is already increasing. Proposals, like Coburn/Burr, that would subject even more Medicare beneficiaries to income-related premiums could ultimately impact beneficiaries with modest incomes.

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The National Committee, a nonprofit, nonpartisan organization acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.

Media Inquiries to:
Pamela Causey 202-216-8378/202-236-2123
Kim Wright 202-216-8414
www.ncpssm.org