Medicare is the one health insurance plan that will cover virtually every American at some point in life, and Republican Mitt Romney is proposing the biggest changes since its creation nearly 50 years ago.
The Associated Press asked the Romney campaign five questions about how its Medicare plan would affect consumers on critical matters of costs and benefits.
Some of the questions remained unresolved after the campaign's responses. It may take electing Romney to find out how his plan would work. The AP also sent President Barack Obama's campaign a set of questions about his plans for Medicare.
"One of the things that concerns me about both campaigns is that they tend to use jargon terms like `competition' or `protection for benefits' without spelling out how they would deal with the challenges that come up," said economist Marilyn Moon, a former trustee overseeing Medicare finances. "Their answer is to attack the other side, or simply reinforce the same jargon, rather than explaining how things would work."
Broadly speaking, Romney calls for shifting people now age 54 and younger into a different sort of Medicare. Once eligible, these people would get a fixed payment from the government, adjusted for inflation, to pay for either private insurance or a government plan modeled on Medicare. Current beneficiaries and those nearing retirement could stay in the traditional program.
Romney says it's time for bold action because Medicare faces insolvency in 2024, the tip of its long-term financing woes. Private insurance plans would get waste out of the system while protecting quality and affordability, he says.
Some Medicare questions for consumers to keep in mind, along with answers from the Romney campaign and the views of several experts:
Q: What happens if Romney's fixed health insurance payment for future retirees fails to keep up with rising medical costs?
A: Thousands of dollars in costs could get shifted to retirees, punching holes in household budgets. Health care inflation is now in a lull, but historically it has grown faster than the economy, overall inflation, and workers' wages.
Romney's campaign says his goal is to avoid cost shifting and to secure for future Medicare beneficiaries affordable coverage options at least as good as what's available for today's seniors. Lower-income Medicare recipients would get more money from the government for their health insurance.
Competition among insurers will keep costs in check, says the Romney campaign. The government payment will be based on competitive bids. "As plans compete with each other to provide better care more efficiently, the growth in (health) costs will slow dramatically and place Medicare on a sustainable long-term footing," writes Romney policy director Lanhee Chen.
Earlier this year, the nonpartisan Congressional Budget Office analyzed a similar Medicare plan by Romney's running mate, Wisconsin Rep. Paul Ryan. It found that by 2030, seven years after the proposal would take effect, Medicare would be spending about $2,200 less on a typical 66-year-old than would be the case under current policies.
That may not be a problem if competition works. But Obama's first Medicare administrator says the numbers are so big he doesn't see how Romney can avoid cost shifting.
"I would hope through quality improvements we can mitigate rate increases. But Romney has not been clear about how he will cause improvements in care to happen," said Don Berwick. "I think the consequences will be that costs will continue to rise."
Tom Scully, Medicare administrator under President George W. Bush, says Congress would intervene to make up the difference. "The reality is if inflation outstrips that payment, Congress will probably make an adjustment," said Scully.
Q: Will there be a set of guaranteed benefits that private plans must cover in Romney's revamped Medicare?
A: The question is important because having a basic set of benefits would allow consumers to make apples-to-apples comparisons among plans. The Medicare prescription drug program and private insurance plans currently available through Medicare Advantage have a floor of protection.
The Romney campaign website says, "All insurance plans must offer coverage at least comparable to what Medicare provides today."
Some experts say that's too vague. "Comparable" can mean similar in dollar value, but quite different in terms of coverage. Insurance companies can design benefits to cherry-pick healthier customers. A high co-payment for home health care, for example, would discourage frail patients.
Q: Romney has said he would repeal Obama's health care overhaul. Would he reinstate Medicare benefits improved by the law? They include closing the prescription drug coverage gap -- the "doughnut hole" -- and expanding coverage of preventive care with no copays.
A: The campaign is silent on this issue, although Vice President Joe Biden is hammering the GOP nominee, saying Romney's repeal of the health law would lead to an immediate loss of benefits for millions of current Medicare recipients.
"I think it would be very hard for (Romney) to take that away," said Berwick.
Q: Romney would turn the Medicaid program for low-income people over to the states, sharply limiting its the future growth. The costliest Medicaid cases are some 9 million elderly and disabled people who also have Medicare, more than 1 million of them in nursing homes. Would Romney require states to institute special protections for this vulnerable group?
A: The campaign says Medicaid spending would grow under Romney's plan, and states will have the flexibility to design programs that serve low-income people most effectively. But several experts said the federal government also has to require accountability from states.
"If there is no protection for these people a lot of states are going to start knocking them off the rolls," said former AARP CEO Bill Novelli, now at Georgetown University in Washington. "These are the most vulnerable among us. There has to be a way to deal with Medicaid without leaving it entirely to the states."
Q: Romney's privatization plan would not affect current beneficiaries or anyone joining Medicare before 2023. But does Romney also guarantee that he will protect traditional Medicare from any future cuts?
A: The campaign is silent on this issue. Moon, the former trustee, says it's an important question, and deserves an answer.
"I would be very nervous about remaining in a program that it has been announced is going away," said Moon, now with the nonpartisan American Institutes for Research. "Because there will be fewer and fewer people who will speak up for it over time."