Wednesday, August 22, 2012

Two Visions for Preserving Medicare

By Congressman Joe Pitts
Guest columnist

Medicare is broken and must be fixed. This isn’t my opinion or a political talking point. The Medicare Trustees stated in their annual report that the trust fund will be exhausted in twelve years.

This isn’t because the trust fund was robbed or because of waste and fraud. If not one dime were scammed from the program by criminals over the next decade, it would still go bankrupt.

The way the program currently runs is simply unsustainable. Just last year, Medicare took in around $530 billion in taxes, but paid out nearly $550 billion in benefits. With 10,000 seniors entering the program every day, that imbalance is quickly growing.

Something has to be done.

Some Democrats claim that Republicans want to “end Medicare as we know it.” The truth is that Republicans are working to save Medicare while Democratic leaders appear content to fiddle while Medicare burns, hoping to score political points.  Even worse than doing nothing, “Obamacare” will cut $700 billion out of the already struggling Medicare to pay for new entitlement programs.

Democrats attack the Republicans’ plan, because they don’t want to talk about their own: the Independent Payment Advisory Board. Buried in the 2,700 page law is a new board of fifteen unelected, unaccountable bureaucrats that will have the power to cut spending on treatments and severely limit the health care services available to Medicare beneficiaries. Only a Congressional supermajority could overrule IPAB (including an unprecedented three-fifths majority in the Senate).

IPAB decisions won’t be debated in public and won’t be subject to court challenge.

It also won’t save Medicare. Nevertheless, the President says he wants to give IPAB even more power to make cuts.

The other part of the Democrats’ plan is to start using general tax revenue to pay for Medicare. Medicare runs on FICA taxes that workers contribute in each paycheck. But now the president wants to raise income tax rates on small businesses and high earners, fundamentally transforming Medicare from an insurance program into a super-expensive welfare program.

You can’t find the Democrats’ plan on a website. It doesn’t have a label or a name.  But it is obvious from their actions and rhetoric how they would combine tax increases with bureaucratic cuts to keep the program running.

Republicans have a different vision. We will not change the program for those currently retired or nearly retired. Those Americans have already planned for their retirements, and we respect that. We will reform the program for future generations of Americans.

Younger Americans would have the option of participating in a new premium support Medicare plan.  These future retirees would be able to choose their health care plan, similar to the way federal employees (including members of Congress) do right now. These plans would not be paid for with a voucher, as some are claiming. They would be supported by a direct payment from the government.

Today, Medicare is a government monopoly and suffers from all the problems that come from lack of accountability and lack of competition.  Under our plan, competition between plans would lower costs and increase efficiency.  Even so, future retirees who don’t want to elect one of these new plans could choose to stay in traditional Medicare. Our plan wouldn’t require any additional taxes and wouldn’t place health decisions in the hands of unelected bureaucrats.

In the coming months, you probably won’t hear President Obama talk about his vision for the future of Medicare. You certainly won’t hear him talk about the $716 billion raided from Medicare to pay for new programs. Instead, you’ll hear misleading attacks. 

Don’t fall for the scare tactics. We can save Medicare for everyone, without taking more of your money and without slashing benefits.

We have a plan that works, and we want you to know about it.  Please visit to read more.

U.S. Rep. Joe Pitts, a Republican who represents Pennsylvania’s 16th Congressional District,  is chairman of the Health Subcommittee of the Energy and Commerce Committee in the House of Representatives. 

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