GOP’s proposed Medicare voucher program would lead to demise of the system

A request for public comment from the Centers for Medicare and Medicaid Services (CMS) has caught the eye of a group of Democratic Senators, alarmed about its implications for the future of Medicare. 

In February, 15 Senators sent a letter to CMS Administrator Seema Verma expressing concern over a Fall, 2017 Request for Information (RFI) regarding a “new direction” for Medicare’s Innovation Center — and the agency’s subsequent failure to make public the more than 1,000 comments it received.

{mosads}At the heart of the Senator’s concerns is ambiguous language in the RFI that suggests a shift toward converting Medicare into a voucher program, which would, “fundamentally restructure the guaranteed benefit traditional Medicare provides to older adults and people with disabilities.”  

“We applaud your efforts to seek input on the Innovation Center’s work,” write the Senators, “However, we are alarmed that you opted to solicit input on such an ambiguous concept.” 

In other words, if CMS is truly considering a “premium support” or voucher model, CMS should have made that abundantly clear in the RFI so that Congress and “diverse stakeholders” could comment appropriately.  

Since CMS has not made public the comments from the RFI, there is no way for Congress to evaluate the input the agency received or know how to meaningfully add to it.  

The Senator’s concerns are well-founded, since Republicans in Congress (most prominently, Speaker Paul Ryan) have long-dreamed of privatizing Medicare by turning it into a voucher system — something that we and other senior organizations adamantly oppose. 

We call it “coupon care,” because (as the Senators point out), instead of receiving a guaranteed health benefit, patients would be given what amounts to a coupon with which to purchase traditional Medicare or private insurance. 

Seniors choosing a plan costing more than the average amount determined through competitive bidding would be required to pay the difference between the voucher and the plan’s premium. In some geographic areas, traditional Medicare could be more expensive. This would make it harder for seniors, particularly lower-income beneficiaries, to choose their own doctors if their only affordable options are private plans that have limited provider network. 

A voucher system could eventually lead to the demise of traditional Medicare.  Former House Speaker Newt Gingrich gleefully declared back in 1995 that such a strategy would cause traditional Medicare to “wither on the vine” — and he was absolutely right. 

Under the GOP’s voucher system, private plans could tailor their benefits to attract the youngest and healthiest seniors, leaving traditional Medicare with older and sicker beneficiaries. 

Their higher health care costs would lead to higher premiums that seniors would be unable or unwilling to pay, resulting in a death spiral for traditional Medicare.  

This latest action is part of an ideological tilt to the right by CMS under Verma’s leadership — with subversion of traditional Medicare as one of the apparent aims. 

The agency has demonstrated a bias toward private Medicare Advantage plans over traditional Medicare. 

In other areas affecting older Americans, CMS has suspended Obama-era regulations intended to improve quality of care and safety at nursing homes, loosened requirements for Medicaid waivers — allowing states to impose onerous, new restrictions on beneficiaries, and supported repeal of the Affordable Care Act. 

Such policies may be good for private sector profits, but harmful to patients — especially the poor, the old, and the sick. 

In the case of the implicit shift toward privatizing Medicare, the 15 Senators suggest that CMS may be breaking the law. 

“We believe you are violating statutory requirements to safeguard older adults and people with disabilities from paying onerous out-of-pocket costs and going without needed health care,” says their letter to Verma.

If what the Senators allege is true, CMS is also violating its own mission statement, in which the agency pledges to ensure that “beneficiaries have achieved their highest level of health, and disparities in health care quality and access have been eliminated.” 

It’s hard to see how undermining Medicare to benefit the private sector helps achieve that mission.

Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare, a membership organization which promotes the financial security, health, and well being of current and future generations of maturing Americans.