One of the Democratic Party’s prominent voices on fiscal issues has thrown a hand grenade into the debate over the long-run sustainability of Medicare, the signature Great Society health program for the elderly.
Alice Rivlin, the 79-year-old former budget director under President Clinton, has teamed up with 40-year-old Rep. Paul Ryan, R-Wis., the incoming chairman of the House Budget Committee, on a plan to essentially privatize Medicare for those turning 65 a decade from now.
It’s very similar to Ryan’s “Roadmap for America’s Future” in that seniors would get lump-sum payments for the value of their Medicare benefits and use them to buy coverage in the private marketplace . . .
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Rivlin has long backed the idea of a “premium support” program, which would keep traditional Medicare as the default for seniors but would charge them more out of pocket. Seniors who didn’t want to pay the higher premiums could take a voucher and enter a “Medicare Exchange,” similar to the health care exchanges being set up for uninsured people under the new health care law . . . Rivlin, now with the Brookings Institution, said the pain would not be as acute as some might think, because seniors’ out-of-pocket costs would go down as managed care plans competed for their business. And no one could be turned away from the Medicare exchange.