Legislative Update For Week Ending March 16, 2012

Legislative Update For Week Ending March 16, 2012

Action on Capitol Hill was slow this week as Members of the House returned to their districts for a week-long recess, and most Members of the Senate kept their focus on a transportation bill and a series of judicial nominations. However, on Thursday, four Senators unveiled a drastic plan to phase out Medicare.

Senate Group Proposes Medicare Phase-Out

On Thursday, a group of four Senators – Rand Paul (KY), Mike Lee (UT), Lindsey Graham (SC), and Jim DeMint (SC) – unveiled a major new plan to transition Medicare enrollees into the same health care program offered to employees of the federal government, including Members of Congress.  According to the group, the plan will “provide Medicare patients with the best health care in America and will forever protect seniors’ interests by aligning them with self-interested politicians.”

Although it hasn’t been introduced as legislation yet, some specifics were outlined in a fact sheet released by the group. Under the plan, the government would pay for three-quarters of the cost of the average plan, and for the most expensive enrollees, it would pay ninety percent of the cost. Wealthy seniors would pay a larger share of the cost, and low-income seniors would receive assistance from Medicaid. In addition, the age of eligibility would increase by three months each year, until it hits seventy in 2034.

According to the group, the plan would reduce the deficit by $1 trillion and it would save enrollees approximately $1,500 per year, but it’s controversial for two major reasons. First, it would completely eliminate traditional Medicare, whereas many other reform proposals would keep it as an option. Second, those already enrolled in Medicare would be affected by the transition, which would have a 2014 start date. Other reform proposals would delay implementation to protect seniors from any drastic or sudden changes.

It’s unlikely that Congress will move forward on this plan or any Medicare reform proposals before a critical election, but The Senior Citizens League will keep a close eye on the negotiations.