House Passes GOP Budget To Privatize Medicare For 5th Straight Year

March 25, 2015 6:29 p.m.

WASHINGTON — The Republican-led House of Representatives passed a far-reaching budget blueprint for the fifth consecutive year that partially privatizes Medicare.

The budget was approved Wednesday by a vote of 219-208, overcoming Republican defections.

Like previous proposals by Rep. Paul Ryan (R-WI), the new plan by House Budget Chair Tom Price (R-GA) transforms Medicare after 10 years into a market exchange (which bears many similarities to Obamacare) where seniors receive a federal subsidy to buy insurance from a menu of options.

The menu includes private insurance plans and the option of staying in traditional Medicare. Like Ryan’s proposal last year, it does not impose a cap on how much Medicare is allowed to spend per beneficiary, a GOP budget aide said. It is a response to criticism that the “premium support” structure could lead to high out-of-pocket costs that make coverage unaffordable for seniors.

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The rest of the non-binding budget blueprint includes features similar to Ryan’s previous budgets: across-the-board tax cuts, massive cuts to domestic programs, higher military spending (inflated by using an “overseas contingency fund” reserve to placate defense hawks), and a repeal of Obamacare. Notably, the budget avoids proposing any politically perilous benefit cuts to Medicare and Social Security in the next 10 years.

There are two other significant changes: It affirms a House rule adopted in January that could force a showdown over Social Security next year. And it does not set tax rates, but instead making a vague call for “comprehensive tax reform” that includes lower rates and fewer “special interest loopholes.”

In order to stave of a humiliating defeat by their own defectors, House GOP leaders brought up the budget under the obscure “queen of the hill” rule, in which multiple budgets by both parties get a vote and the one with the highest tally wins.

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