Sarah Kliff reports that Mitt Romney has provided us with a bit more detail about how he'd reform Medicare:
The plan has two major things in common with the Medicare reforms that House budget chairman Paul Ryan (R-Wis.) proposed earlier this year. First, it would provide seniors with a specified amount of money to purchase health benefits. The level of benefits would depend on the recipient’s income, as those with lower incomes would get more money to spend on Medicare. Second, it would allow private carriers into the Medicare space with two key requirements: They would have to provide a set of benefits comparable to the entitlement program and offer coverage to any senior who applied. The argument is that prices would drop as Medicare plans compete for business.
But there’s one big difference between the Ryan and Romney plans: While Ryan would have phased out traditional Medicare completely, Romney would leave it as an option for seniors. “We’d allows providers to compete to provide the best care at lowest cost,” a Romney campaign official told reporters Friday. “One of the choices will be to remain in traditional Medicare.”
Hmmm. That sure sounds a lot like a combination of traditional Medicare and Medicare Advantage. In other words, exactly what we have today. Romney apparently hasn't decided how he'd set premium support for the private plans,1 but that hardly matters if you keep the traditional program around. Premiums either keep up enough to compete with traditional Medicare, or else everyone eventually migrates to traditional Medicare and the private plans go out of business. So I guess I don't really get this.
Romney also wants to raise the Medicare eligibility age to 67. This would be extremely unpopular and it wouldn't really do much to lower Medicare costs. So I think we can safely consider that a nonstarter.
Other than that, Romney's plan sounds great.
1The big criticism of Paul Ryan's premium support plan was that the size of the voucher grew so slowly that within a couple of decades seniors would be paying huge amounts out of pocket for medical care. So as wonky as it sounds, the precise mechanism by which premium supports are calculated each year is really, really important.