In his debt limit speech before a Wall Street crowd at the Economic Club of New York Monday evening, House Speaker John Boehner defended the GOP’s Medicare plan in broad terms. But in particular, he defended one aspect of the proposal that’s largely distinct from its two most controversial parts — privatization, and deep benefit cuts. Specifically, Boehner endorsed the idea that Medicare — whether private or public — should be means tested.
In a Q&A session with one of the event’s moderators — Wall Street billionare-turned-deficit-scold Pete Peterson — Boehner said wealthy beneficiaries should pay for their Medicare premiums.“Pete, I love you to death, but I don’t think the taxpayers ought to be paying your Medicare premium,” Boehner said. “And under Paul Ryan’s plan, what it says is, let’s allow the American people to decide which health care plan fits their needs. And if you’re middle-income, lower income, we are going to pay, just like we do today, for the cost of those premiums. But for people of means, there’s no reason why we should subsidize Pete Peterson’s premium. I’m sorry. He ought to pay the full cost of his premium to be in Medicare.”
Under the plan in the GOP budget, beneficiaries would get means-tested subsidies to buy private insurance. But those subsidies would shrink relative to the cost of health care over time, and soon prove inadequate. Here Boehner is endorsing the concept of means testing, whether applied to Medicare as it exists right now, or privatized Medicare.
“For those who have substantial means, you can pay your own premium,” he added.
That’s still a controversial position particularly given the relatively modest savings. In essence it would mean requiring a wealthier subset of seniors to pay thousands-more dollars a year out of pocket, after they paid their whole lives into a program meant to significantly limit their costs. And to an extent, it cuts against the basic compact of entitlements — that by treating wealthy and poor beneficiaries equally, the programs win much broader buy-in from the public, which protects them from the sorts of political attacks that make welfare programs so vulnerable.
But if the GOP moves off its privatization plan, it’s easy to imagine them taking up means-testing as a “compromise” position.