To state the obvious, it’s a big election year. The frustrating truth about presidential political platforms is that they are purposefully vague, particularly for those of us whose businesses are intricately linked to Medicare and Medicaid. Another fact of election time is that you can’t believe everything you read and hear—“mistruths” are common, and it can be a challenge to decipher fact from fiction.
Before casting your votes on November 6, I urge you to research the candidates’ positions, particularly on issues like competitive bidding, as well as larger health-care issues. Have they supported the industry’s position to repeal and replace competitive bidding? Have they shown that they understand the value of home care in our nation’s health-care system? If you are unsure of a candidate’s position, call their office and ask. Here’s a brief primer on the presidential candidates’ positions on Medicare and Medicaid:
President Obama’s Medicare Plan—Obama’s platform states that he intends to build upon the structure put in place by the 2009 Patient Protection and Affordable Care Act. Under the health reform law, the general structure of entitlements remains intact, but the law makes some changes to the way Medicare pays doctors, hospitals and other providers. Overall, the law cuts $500 billion over 10 years by reducing future payment adjustments; establishing pilot programs meant to encourage higher quality and lower cost care; creating an independent board to keep Medicare spending under control if costs rise too quickly; and cutting subsidies to private insurance companies that offer health plans under the managed care Medicare Advantage program. The Obama-Biden team believes that new payment models, such as Accountable Care Organizations, will save money, increase quality and avoid the need to cut benefits or raise premiums.
President Obama’s Medicaid Plan—The health reform law will significantly expand the size of the Medicaid program in 2014. Eligibility will be extended in all states to all individuals and families earning up to 133 percent of the federal poverty limit (about $29,000 for a family of four). About 17 million people are expected to be added to state Medicaid programs, which will require significant changes by many states. The Supreme Court’s decision earlier this year made this expansion optional for states, and a few states are expected to opt out.
Mitt Romney’s Medicare Plan—Under the Republican plan seniors would buy medical coverage from private insurers or from traditional Medicare, which would compete with private plans. Participating private health plans would have to offer coverage equivalent to traditional Medicare and would not be allowed to reject Medicare beneficiaries.
The plan would convert the Medicare Program into a collection of private, competing health-care plans. In 10 years, when an individual turns 65, he/she would receive a voucher to buy coverage, priced according to an undefined system. Seniors would be able to choose among private insurance options or the traditional fee-for-service Medicare program. There are few details available about how the program would work, including how the value of the voucher or subsidy would be set. The key question is how the government will set the level of the premium support/voucher, and whether it would keep pace with inflation. Vice presidential candidate Paul Ryan would index the growth of the Medicare voucher to a set target. The objective is to lower costs through market competition, providing insurers an incentive to attract customers and giving individual beneficiaries an incentive to seek the cheapest policies. Romney would also slowly raise the retirement age by indexing it to life expectancy and would vary some premiums according to beneficiaries’ incomes.
Mitt Romney’s Medicaid Plan—Romney would completely restructure Medicaid programs to give the states more control, but with less money. Currently, the federal government pays a percentage of all Medicaid medical costs and sets rules about the minimum benefits and eligible populations. Romney would change Medicaid to a block grant program that would give cash grants to states with few policy constraints. The amounts would increase at the rate of gross domestic product growth plus 1 percent. Romney says his plan would give states more flexibility and would create incentives to improve efficiency and root out abuse.
