Rep. Paul Ryan said Stephen Goss, left, writes analyses that "should be require reading for policymakers" and that Rick Foster, right, has non-partisan analysis that is "second-to-none." (Mattias Gugel/Medill)
WASHINGTON — Republicans and Democrats on the House Budget Committee Tuesday agreed on one thing during a two-hour hearing: Health care for the elderly and government-funded retirement benefits are on an unsustainable path. But they couldn’t seem to agree on how to preserve them.
The Republican-controlled committee led by Wisconsin Rep. Paul Ryan has been heavily focused on overhauling the entitlements as part of its plan to preserve them while reducing the federal debt. The House passed Ryan’s budget proposal last year, but it did not pass in the Senate.
The leading Democrat on the committee, Maryland Rep. Chris Van Hollen, reiterated Democratic mantra and said any plan needs to be “balanced” and include decreasing costs and raising revenues. He said he worries that Medicare beneficiaries would have to “pay thousands more or settle for a plan that does not fit their needs” if Republicans turn Medicare into a voucher-like system.
Democrats suggested that rising health care costs are another problem that makes Medicare and Medicaid reform difficult, saying that more needs to be done to restrain the rate of healthcare cost growth.
“The more we can contain costs, the more we can preserve benefits,” said the newest member of the committee, Rep. Suzanne Bonamici, D-Ore., at her first hearing.
Last May, the Social Security and Medicare Boards of Trustees projected that Medicare’s funds will be exhausted by 2024 and Social Security will exhaust its funds by 2036. The boards forecast that Social Security costs will increase from 4.5 percent to 6 percent of GDP and Medicare costs will almost double over the next 20 to 30 years.
“That’s a big increase,” Chief Actuary for the Social Security Administration Stephen Goss said at the committee hearing Tuesday. “If we desire to maintain the same relative retirement income and health care, these increased costs as a share of GDP will have to be met.”
Medicare rose from 10 percent of national health expenditures in 1976 to 20 percent in 2010. Individuals’ out-of-pocket costs have dropped by over 50 percent from 27 percent of national health expenditures in 1976 to 12 percent in 2010.
Richard Foster, chief actuary for the Centers for Medicare and Medicaid Services, said the increases were not due to the aging of baby boomers as many have said, noting the first members of that generation only reached 65 in 2011.
Ryan pointed out that there is growing bipartisan support for reforms that “ensure no disruptions for those in or near retirement, while offering the next generation a patient-centered Medicare program that offers more choices and more security.” He has recently collaborated with Sen. Ron Wyden, D-Ore., on a plan that would allow beneficiaries to choose between private insurance programs or traditional Medicare.
Last week, Sens. Tom Coburn, R-Okla., and Richard Burr, R-N.C., unveiled a proposal to reform Medicare in an attempt to make the health care program sustainable. The plan, called the Seniors’ Choice Act, would create an out-of-pocket maximum limit, increase the costs on wealthier seniors and raise the age of eligibility.
Coburn and Burr also proposed a “premium support” system in which Medicare would provide a voucher-type payment and a list of coverage options from which recipients could. Their blueprint includes aspects from Ryan’s budget plan and a previous Medicare reform proposal by Coburn and Sen. Joseph Lieberman, I-Conn.
“Right now, the American people have little faith in Congress’ ability to do anything to fix the problems facing our nation, and with good reason. But let’s prove them wrong. The Medicare program is broken, and we have an obligation and an opportunity to fix it,” Coburn said at a news conference last Tuesday.
