There's a reason people throw partiies on the day they get their Medicare card. People over the age of 50 who have struggled to pay for individual insurance that costs more than the mortgage--or had to go without health insurance--can only feel blessed relief about the red, white and blue card in their wallets. Even Tea Partiers who say they want the government out of their lives chant "Don't Touch My Medicare."
Presidential Candidate Mitt Romney may think he can get around it by proposing to privatize Medicare--except for people who want to keep Medicare. But if he ever gets around to filling in the details, he'll discover he's found the perfect way to raise the nation's overall medical costs while crippling Medicare.
Romney's plan is a mash-up of government vouchers for private health insurance (Rep. Paul Ryan's now-vanished idea) and traditional Medicare--but with seniors paying more, maybe much more, as the value of the vouchers slowly shrinks.
Of course, no private health insurance can match Medicare's tiny administrative overhead.
So private plans have to cut back coverage or increase co-pays, etc., no matter what they offer in gym membership or vision care perks. So the vouchers (or as Romney calls it, premium support), would attract mainly two classes of senior--a few who are willing to put ideology above medical security, and healthy people who might buy a plan that the voucher covers completely. So right off the bat, Medicare's proportion of sicker people--and costs--would go up.
One key point of Romney's plan is that if private plans are cheaper, those still in Medicare will have to pay extra to make up the difference. The sickest people who need Medicare the most will cling to it the hardest, opening a can of cat food for dinner if they have to, Ultimately the proportion of older, sicker people in Medicare could price out new entrants..
At that point, seniors using the Romney vouchers to buy a private plan will realize that it no longer covers their premium. Their co-pays and other out of pocket costs are rising fast. More of their usual care is being denied and insurers are cutting down their doctor networks.
Maybe it wouldn't happen that way. Maybe, as some conservative blogs are claiming (or smirking). Romney's plan is really a test of the "public option,". Maybe Medicare's lower overhead would out-compete the vouchers from the beginning.
If private insurers had to offer care equal to Medicare, probably true. But insurers would be almost certainly be free under the Romney free-market vouchers to cut medical benefits, subtly discourage applicants with chronic diseases and spend a billion or so on gauzy direct marketing to healthy seniors, In that case, Medicare would slowly wither--until it was too late to revive the nation's best-loved safety net.
It's true that government spending on Medicare would go down. But far more would come out of seniors' pockets. Overall medical costs would rise, not fall.