Medicare a major issue in 2012 campaign

Medicare is a major issue in 2012 as more Baby Boomers begin to receive benefits.

According to Alliance for Retired Americans “Friday Alert,” last month Newt Gingrich and Mitt Romney both enthusiastically endorsed Sen. Ron Wyden’s and Rep. Paul Ryan’s Medicare premium support plan – a wonky middle ground between Ryan’s goal of complete Medicare privatization and the Democrats’ reliance on the growing market power of traditional Medicare to drive innovation in the health care system. Under the proposal, seniors would receive a voucher to purchase insurance from an exchange of private plans or Medicare. 

During a town hall meeting a week ago, Rick Santorum threw his support behind the Wyden/Ryan plan. Santorum is a strong supporter of Ryan’s original Medicare privation scheme to completely eliminate traditional Medicare as an option for seniors and has promised to accelerate its implementation. 

Medicare, however, has a better track record of controlling health care cost than private insurers and has introduced market innovation and payment reform that private plans later adopted. Medicare’s smaller administrated spending and its ability to use its sheer size and clout to bargain for cheaper services explains this advantage. In fact if Medicare cost had risen as fast as private insurance premiums, it would cost around 40 percent more than it does. If private insurers had done as well as Medicare at controlling cost, insurance would be a lot cheaper.

Edward Coyle, executive director of Alliance for Retired Americans, says, “Medicare privatization is shaping up to be the number one campaign issue in 2012."