Romney makes a key refinement to his Medicare plan

According to Mitt Romney’s website, his plan for Medicare hasn’t changed much since I reacted to it last year. I refer you to these two posts.

But it has changed a little. There is something new on his website:

“Traditional” fee-for-service Medicare will be offered by the government as an insurance plan, meaning that seniors can purchase that form of coverage if they prefer it; however, if it costs the government more to provide that service than it costs private plans to offer their versions, then the premiums charged by the government will have to be higher and seniors will have to pay the difference to enroll in the traditional Medicare option. [Bold mine.]

That’s true of private plans too, under Romney’s vision: if you enroll in one that charges a premium higher than the support (subsidy) offered by the government, you’d pay the difference out-of-pocket. While that’s already the case for Medicare Advantage (MA) plans today, it is not so for traditional Medicare, not in the same sense as for MA plans. MA plans in a market are judged against a common benchmark. Stepping over some complexities, basically, in relation to that benchmark, plans that cost more have to charge more in out-of-pocket premium. Traditional Medicare is not judged according to the same benchmark. It stands alone.

Romney seems to want all plans, private and public, to participate on a “level playing field,” all compared to the same benchmark. So, this aspect of Romney’s plan is a departure from current law. It is consistent with the premium support idea I explored in a long series earlier this year. That’s not to say Romney’s plan is the same as what I explored. I do not believe Romney has specified his vision in enough detail to make a determination.


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