GOP senators float 'premium support' Medicare overhaul

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Sen. Tom Coburn (R-OK)
Sen. Tom Coburn (R-OK)

A new Medicare overhaul proposed by two Republican senators on Thursday would save an estimated $200 billion to $500 billion over 10 years by way of “premium support.”

The plan, proposed by Tom Coburn (R-OK) and Richard Burr (R-NC), is similar to the plan pitched last year by Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-OR), except that it would start in 2016. Like the Ryan-Wyden plan, it increases the Medicare eligibility age to 67, limits the use of private supplemental insurance, and raises premiums for middle- and upper-class beneficiaries.

Under Coburn-Burr plan, seniors would be given a fixed amount of money to put toward a private health care plan or a plan modeled after Medicare. The senators say it's modeled after the Medicare Part D competitive bid model, the Associated Press reports.

Critics of the plan argue that the cheaper private-plan option would attract only the healthiest beneficiaries, leaving the sickest and most expensive individuals with the federal plan, where costs would surge.

Observers say the plan is unlikely to catch on in an election year.

In other budget news, House and Senate committee members voted to cancel a schedule physician pay cut yesterday afternoon known as the “doc fix.” Congressional leaders struck a deal this week to extend the payroll tax cut.