April 05, 2011 4:05 pm ET - by Meredith Kormes
In the flurry of coverage of Rep. Paul Ryan's (R-WI) budget proposal there has been a lot of discussion about his plan for entitlements. Ryan told Chris Wallace on Fox News Sunday that his plan for Medicare contains premium supports, not vouchers, and that they are "very different" things.
Yet many believe vouchers and premium supports to be similar financing tools. As Kaiser Health News explains, "vouchers tend to be a specific dollar amount with growth pegged to an inflation gauge or the growth in the economy plus one percentage point. Under premium support, enrollees would likely get a certain percentage of their premiums covered by the government." And John Goodman, president of the conservative National Center for Policy Analysis, said, "I use the words interchangeably...It just means that the government limits the amount of money that it puts up, and people have to add to it if market prices are higher."
Despite being a stickler for the difference between the two, Ryan acknowledged at the American Enterprise Institute today that his plan, "from a budget savings standpoint...achieves the same result" as vouchers:
REPORTER: Just on the Medicare proposals, two related things. First of all, you've drawn — you've made a point of drawing a distinction between vouchers and premium supports. Now while I get the mechanical difference that they'd be going — they wouldn't be, you know, a voucher that people would then purchase insurance with. It would go to the plans and subsidizes the plans that they choose. But though there's a mechanical difference, it's hard to see what the effective economic difference would be.
RYAN: It achieves a similar scoring result. So, they achieve the same kind of savings path. My Roadmap does have vouchers, but I worked with Alice Rivlin who was the OMB in the Clinton administration. I think she was Vice Chair of the Fed, right, Kevin, in the Clinton administration as well. She and I were the chairs of the Health Care Task Force in the Commission and we agreed on a structure which is not the voucher structure but the premium support structure. So, it mechanically works a lot different. And CBO calls it, not a voucher, but premium support. The whole point is that it works more like programs people are already familiar with. It works like the Part D benefit seniors are familiar with. It works like the federal employee health benefit plan that I am very familiar with as a federal employee. And it's important to make these distinctions, I think, so people don't, basically, inaccurately or incorrectly try and tell us what we're doing, or describe our plans. But from a budget savings standpoint, from a reliability of getting the savings going forward, it achieves the same result.
So this is really a game of semantics. Perhaps the reason why Ryan is forcing this distinction is because the idea to replace Medicare with a voucher system has polled poorly in the past. But whether the funding mechanism is called vouchers or premium supports, in the end the proposal will 'achieve the same result' of shifting costs to seniors.
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