Paul Ryan to announce new approach to preserving Medicare

House Budget Committee Chairman Paul Ryan, who has been castigated by Democrats and hailed by Republicans for his plan to privatize Medicare, will on Thursday unveil a new approach that would preserve the 46-year-old federal health program.

Working with Democratic Sen. Ron Wyden (Ore.), the Wisconsin Republican is developing a framework that would offer traditional, government-run Medicare as an option for future retirees along with a variety of private plans.

Graphic

A look at how health-care overhaul law got to the Supreme Court and what issues are in play.

More on this Story

• Ryan to announce new approach to Medicare
• Gingrich's plan to "Newtify" Medicare Advantage
• Plan to raise Medicare premiums for upper-income retirees would affect middle class as well
• Wonkblog: Why the high-risk pools failed

Seniors would still receive a set amount of money from the government to buy insurance, as they would under the Medicare proposal Ryan included in the budget blueprint that passed the House last year. But the new approach would let that subsidy, known as premium support, rise or fall along with the actual cost of the policies — creating more protection for seniors and saving potentially far less in the budget.

Wyden is the first elected Democrat to publicly endorse Ryan’s premium support plan, and their unusual alliance could complicate election-year politics for both parties on an explosive issue. In recent days, Republican presidential candidate Mitt Romney has embraced the Ryan privatization plan, and GOP front-runner Newt Gingrich has offered qualified support. Democrats, meanwhile, have been gearing up to challenge the GOP across the board on the issue, accusing Republicans of pushing to “end the Medicare guarantee.”

Ryan and Wyden said in an interview Tuesday that they joined forces in hopes of lifting the Medicare debate above the divisive political rhetoric and forging a genuine compromise that could save the program along with the government’s solvency. Since unveiling his premium support plan last spring, Ryan has been working with Democrats to modify the idea to build bipartisan support.

“We want to demonstrate that there is an emerging consensus developing on how to preserve Medicare. We want to move that consensus forward,” Ryan said. “This program’s got to be reformed to be saved. The country’s at stake.”

Wyden said that adding traditional Medicare to Ryan’s premium support plan combines the best ideas of both parties, creating “the opportunity for progressives and conservatives to come together and address the real challenges” of the federal entitlement program: rising health costs and an aging population.

“There’s a lot to work with here in terms of trying to find common ground,” Wyden said. “This doesn’t end Medicare as we know it. People can go to bed knowing that traditional Medicare will be there for them for all time.”

The pair said they would not draft legislation. With Congress at an impasse over more immediate deadline matters, such as the extension of a temporary payroll tax cut, Ryan said he does not expect action on major issues such as Medicare until a new Congress is seated in 2013.

“There’s no point in drafting legislation if you know it’s not going to pass,” Ryan said.

Ryan and Wyden, a longtime advocate for seniors, plan to release their proposal at a breakfast Thursday morning hosted by the Bipartisan Policy Center, one of many players in the year-long debate over the national debt. The center formed its own debt-reduction committee, chaired by former senator Pete Domenici (R-N.M.) and former Clinton budget director Alice Rivlin, who has also worked with Ryan on his premium support approach to Medicare.