The Politics Of Changing How Medicare Works

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On Wednesday, the Senate defeated the House GOP Medicare plan. Host Michel Martin speaks with Kaiser Health News senior correspondent Mary Agnes Carey about what Medicare does, why some have objected to Rep. Paul Ryan's (R-WI) plan, and why five Republicans joined Democrats to vote down the GOP Medicare proposal.

MICHEL MARTIN, host: We wanted to talk a bit more about the politics of Medicare, especially the politics of trying to change the way it works. On Wednesday, the Senate voted down the House Republican plan put forward by House Budget Committee chair Paul Ryan. Five Republican senators broke with their party to help defeat it. We wanted to talk about the significance of these events and we've called Mary Agnes Carey, a senior correspondent at Kaiser Health News, for some perspective. I just want to emphasize that Kaiser Health News is an independent news service. It is not affiliated with the health insurance company. And she is here with us in our Washington, D.C. studio. Welcome back, thanks for joining us.

AGNES CAREY: Thanks for having me.

MARTIN: I just wanted to ask the same question I asked Congresswoman-elect Kathy Hochul. She's of course a Democrat. She just won this district that has been held by Republicans for decades. I asked her whether her election was, in fact, a referendum on this proposal. What do you think?

CAREY: I think it absolutely was. I mean, it was possibly - I think it was the first election that came up after Paul Ryan's plan was introduced in the House and the House approved it. She talked about, in your interview with her, how heavily she campaigned on Medicare and Paul Ryan's plan and her opponent's support for that - if she had been in Congress she would have voted for it. And so this was heavily watched by both sides. Six million dollars spent in this race.

Democratic analysts are certainly spinning this in their favor, saying this is an absolute repudiation of Paul Ryan's Medicare plan. And this is kind of a winning strategy for them if they go into 2012.

MARTIN: As we mentioned, that Mr. Ryan and other national Republicans are saying that the plan has been mischaracterized. So why don't you tell us what it does? And, first of all, for people who don't know, what does Medicare do?

MARY AGNES CAREY: Medicare is the health insurance plan for people over age 65, and some disabled Americans can get it if they're younger. What Paul Ryan's plan would do is if you are 54 or younger, when you enter Medicare, the Medicare program will negotiate with a series of private plans and give you choices of private health insurance plans and a set amount of money from which - for which you can use to buy health insurance.

But the traditional fee-for-service plan - which now, something like 70 percent, 75 percent of Medicare beneficiaries are in - that goes away. The traditional fee-for-service plan is contracts with hospitals and doctors and other health providers, where they're paid a set amount of money to take care of you. The Medicare advantage plan, what the private plans currently are, is a set amount of money, again, for those health plans to take care of you. And the private insurance market would dominate in Paul Ryan's plan. There's no more traditional fee for service.

MARTIN: And what are people concerned about, those who oppose the plan? Is it just the - is it philosophical? They just don't believe that something like that should be privatized? Or what's the objection to the plan, to those who object to it?

CAREY: That's one of the objections. You shouldn't put Medicare completely, solely in the hands of the private insurance industry. There's also concern about will there be a set package - minimum package of benefits that have to be covered. That is unclear. They're also concerned about the amount of money that Paul Ryan has specified at this point in his plan. It won't be enough. And as time goes on and health inflation increases, that seniors will have to contribute thousands of dollars out of their own pockets for their coverage.

MARTIN: In fact, there's a study to that effect that identifies a number. Is that a credible study? It says that some - more than $6,000, in fact, that seniors would have to pay that much more per person. Is that a credible study?

CAREY: Yeah. The Congressional Budget Office are known around Washington as the CBO, which is sort of the official scorekeeper - nonpartisan scorekeeper of Washington - came out with those findings. It came out the day Paul Ryan announced his plan, and it was definitely - he got a lot of attention.

MARTIN: And on the other side, though, that people even in the Democratic Party are cautioning that something has to be done about Medicare. Why is that?

CAREY: Well, if you look at the long-term budget picture, our long-term federal debt, that entitlements are contributing to that. So Democrats are saying we have to have this part of the discussion. Republicans are saying we have to have this as part of the discussion. But what we've just seen in this election and in the debate over Paul Ryan's Medicare plan shows how politically polarizing this is.

A voter, a typical American may say, yes. I want you to control entitlement spending, but when it comes down to changing their Medicare program, they object. And that's the difficult thing that everyone faces here as we have this discussion.

MARTIN: And, finally, before we let you go, what can you tell me about the five Republican senators who joined with the Democrats to defeat the Republican plan in the Senate? They're known as moderates. But can you just tell us a bit more about why they voted against their party on this very difficult issue?

CAREY: They thought that Paul Ryan's approach was too radical, it was too far. Republicans are trying to find their place on this. Some are unapologetic about the Ryan plan. They absolutely agree with it. Some want it modified, and some want absolutely nothing to do with it. So I think they want a more moderate approach on this than what Paul Ryan has taken.

MARTIN: Mary Agnes Carey is a senior correspondent for Kaiser Health News. That's an independent news service that is not affiliated with the health insurance company. And she was kind enough to join us here in our Washington, D.C. studio. Mary Agnes, thanks so much for joining us.

CAREY: Thanks for having me.

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