Medicare row escalates with Romney's VP pick

Updated: 2012-08-20 10:25

(Xinhua)

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COMPETING VISIONS

Ryan has also been criticized by some Democratic foes as he was the defender of the wealthy on issues including Medicare, and they are not accurate either. His budget blueprint would give less Medicare support to the wealthy seniors but provide additional assistance for the low-income beneficiaries and the sick.

In Ryan and other Republican lawmakers' views, Medicare's failed reliance on bureaucratic price controls, combined with rising health care costs, was threatening to bankrupt the system.

The different stances on the Medicare issue shed light on the starkly opposing views on health care reforms. Democrats intended to remain the current system largely intact with efforts to enhance its coverage and service quality, while some Republicans wanted market competition to do its work.

The premium-support option was much better than the traditional approaches including trying to save money with price controls on health-care providers. Price controls were notoriously ineffective, because health-care providers adapt by ordering more tests and procedures and they were politically unsustainable due to lobbying pressure, contended Daniel Mitchell, a senior fellow at the Cato Institute, a Washington-based think tank.

A fairer question was whether market competition can always drive down healthcare costs more effectively than a government monolith.

Over the 40 years from 1970 to 2009, Medicare spending per enrollee grew by an average of 1 percentage point less each year than private health insurance premiums, due to factors including bigger bargaining power of the traditional government-run Medicare program, noted Paul N. Van de Water, a senior fellow at the Washington-based Center on Budget and Policy Priorities.

As Ryan's Medicare plan drew concerns from senior Americans as they were worried that the new plan might shred the current social safety net, US GOP presumed presidential nominee Mitt Romney seemed to distance himself from some parts of the controversial proposal.

Romney has been criticizing that the Obama administration intended to reduce 716 billion dollars from Medicare spending over the next decade through the "Obamacare," saying he would restore the $716 billion to the Medicare trust fund and get Medicare on track to be solvent over the long run, although those cuts were part of Ryan's budget plan.

Government funding set aside for Medicare program in the trust fund, which was financed by payroll taxes, was expected to be exhausted in 2024, according to a recent report from the Social Security and Medicare boards of trustees.

In a recent analysis article, Ron Haskins, a senior fellow at Brookings Institution, held that "my fear is that Romney will find ways to back away from Ryan's budget plan and his proposal for premium support in particular. No matter what Romney does, Democrats are going to roll out all their 'Mediscare' tactics and try to make the elderly think Romney/Ryan have a plan to destroy Medicare."

Addressing seniors in the US state of Florida on Saturday to quell doubts about his proposal to overhaul Medicare, Ryan said Obama was running the election on "fear and smear," adding that " our plan does not affect the benefits for people who are in or near retirement" but Medicare needed reform "for my generation so it doesn't go bankrupt when we want to retire."

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