Wasserman Schultz’s bogus claim that the GOP Medicare plan will ‘throw you to the wolves’

at 06:00 AM ET, 06/01/2011


(Alex Brandon/AP)

“The Republicans have a plan to end Medicare as we know it. What they would do is they would take the people who are younger than 55 years old today and tell them, ‘You know what? You’re on your own. Go and find private health insurance in the health-care insurance market. We’re going to throw you to the wolves and allow insurance companies to deny you coverage and drop you for pre-existing conditions. We’re going to give you X amount of dollars and you figure it out.’ ”

— Rep. Debbie Wasserman Schultz (Fla.), chair of the Democratic National Committee, May 29, 2011

Something about the debate over Medicare prompts eye-popping rhetoric. A few weeks ago, it was Health and Human Services Secretary Kathleen Sebelius saying the Republican plan for Medicare would let cancer patients “die sooner.” This weekend, on CBS’s “Face The Nation,” Wasserman Schultz said Republicans would “throw you to the wolves.”

We’ve previously taken Republicans to task for claiming their plan is “a system just like members of Congress and federal employees have.” Not so. We also criticized Sebelius for her assertion. So where does the DNC leader stand in this collection of conflicting claims?

The Facts

 The current Medicare system, in place since the mid-1960s, is essentially a government-run health care program, with hospital and doctors fees paid by the government, though beneficiaries also pay premiums for some services as well as deductibles and coinsurance. The new system envisioned by House Republicans would transform Medicare into a competitive market for people who are now younger than 55.

Retirees would get from the government what Rep. Paul Ryan (R-Wisc.), the chairman of the House Budget Committee, calls “premium support” — a set payment adjusted to inflation; they would use that money to pick from a range of plans offered by insurance companies through what is termed a Medicare exchange. Democrats tend to refer to this payment by the more ominous-sounding word “voucher.”

Wasserman Schultz did not say voucher, but her statement suggests that people would be handed a check (“X number of dollars”) and then have to go out and find a plan that they can afford. She also said the plan would “allow insurance companies to deny you coverage and drop you for pre-existing conditions.”

Neither of those claims are true. The system as envisioned by Republicans would operate much like the Medicare prescription drug plan currently does. The government would not give people a check or anything like that; the government would handle the funds, just as they do under the drug plan. As the nonpartisan Congressional Budget Office said when it examined the plan, “The premium support payments would go directly from the government to the plans that people selected.”

 Meanwhile, different plans approved by Medicare would compete for business, as under the drug plan. Moreover, the GOP proposal specifically says that to participate in the Medicare exchange, insurance companies would have to accept all retirees.

 Again, from the CBO evaluation: “The proposal includes rules that would govern the Medicare exchange — including requiring insurers to issue insurance to all people eligible for Medicare who apply, requiring that each insurer charges the same premium for all enrollees of the same age, and using a risk-adjustment mechanism. In CBO’s judgment, those rules are essential for ensuring that a large fraction of eligible individuals would enroll.”

 Where does Wasserman Schultz come up with her claims? DNC spokesman Hari Sevugan provided a links to a study and quotes from various experts that mostly focused on whether the premium support envisioned under the plan would be adequate for most people.

Certainly, the CBO raises serious questions about whether the premium payment would be adequate over time. The CBO analysis estimated that by 2030, the government would pay just 32 percent of the health care costs, less than half of what the federal plan currently pays. The other 68 percent of the plan would have to be shouldered by the retiree. (The CBO estimated that if traditional Medicare stayed in place, the government would pay 70 to 75 percent of the costs.)

 “As numerous independent authorities have found, the Ryan plan to end Medicare as we know it doesn’t guarantee coverage,” Sevugan said. “The bottom line is that the vouchers he proposes to hand out to seniors would not cover their costs — especially for those with pre-existing conditions – and they would be denied the care they need. The only thing the Republican plan guarantees is that you will have to pay substantially more out of your pocket for substantially less coverage if you end up getting covered at all.”

 But this is different than claiming the plan would “allow insurance companies to deny you coverage.” Wasserman Schultz is offering a prediction, not a fact.

 We checked with Michael Cannon, director of health policy at the libertarian Cato Institute, one of the experts cited by Sevugan as backing up Wasserman Schultz’s claim. Cannon described her comment as “high-octane idiocy.”

 “Ryan’s plan says that insurance companies could not turn away seniors.  I’m not sure whether that means only (A) that insurers must issue a policy to all applicants (i.e., guaranteed issue) or whether Ryan’s plan would go further and (B) prevent insurers from charging sick enrollees more (i.e., price controls),” Cannon said. “I hope Ryan would not include such price controls, but I see hints that that’s where he’s leaning. If so, then the Ryan plan would include the very government guarantee that the DNC is complaining isn’t there.”

The Pinocchio Test

 One can certainly raise serious questions about whether the Republican plan is adequately funded and, over time, would shift too much of the financial burden to beneficiaries. One could also question whether the elderly would be eager to navigate different choices for their health-care coverage, compared to the much simpler system that now exists. There are certainly details in the GOP plan, which has not been drafted as actual legislation, that need to be addressed. But Wasserman Schultz is jumping to conclusions — not to mention scaremongering metaphors — to describe provisions in the GOP Medicare plan that just do not exist.

Three Pinocchios

 

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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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