Paul Ryan health care plan less than coverage for Congress members

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Paul Ryan has likened his Medicare overhaul to the health-care coverage available to members of Congress. It differs in one main respect: It's less generous.

Republican vice presidential candidate Ryan's plan to revamp the health-care program for the elderly wouldn't have the safeguards against rising costs included in the coverage that lawmakers and other federal workers receive.

Those differences, which help explain the savings claimed in Ryan's budget, are sparking complaints that Republicans want to impose a plan on the elderly that's inferior to their own. Ryan, a Wisconsin lawmaker, is chairman of the House Budget Committee.

"Their proposal would give seniors on Medicare a much worse deal than members of Congress have," said Representative Chris Van Hollen of Maryland, the top Democrat on the Budget Committee.

Ryan's proposal to tackle spiraling Medicare costs by offering seniors subsidies to buy private insurance is taking center stage in this year's presidential contest.

Republicans reject the complaints, saying Ryan's plan would harness market forces to control costs, ensuring seniors won't face larger health-care bills.

"These desperate distortions are nothing more than an attempt to distract Americans from the fact that the President has already raided $716 billion from Medicare to fund Obamacare and has no plan to prevent it from going bankrupt," said Brendan Buck, a Romney campaign spokesman. "Governor Romney and Congressman Ryan are the only ones with a plan that protects Medicare for today's seniors and strengthens it for future generations." Federal Health Coverage At issue is the Federal Employees Health Benefits program, the nation's largest employer-sponsored health-insurance program. It covers more than 8 million civilian employees, retirees and their families, including members of Congress. Lawmakers participate in the $43 billion program on the same terms as other federal workers.

Much like Ryan's Medicare proposal, the federal workers' plan offers employees a menu of private-insurance options. As with Ryan's plan, that's designed to require insurance companies to hold down costs to compete for federal workers' business. Also like in Ryan's plan, the government shoulders much of the cost of premiums.

Ryan emphasizes the similarities.

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"Future Medicare beneficiaries will be able to choose a plan the same way members of Congress do," his budget proposal says.

Federal Program The difference comes with how the government chips in. Under the federal employees' program, the government covers a fixed share of the costs as determined by what's known as the "fair share formula." It amounts to about 70 percent of the program's costs, according to the nonpartisan Congressional Budget Office.

Starting in 2023, Ryan's plan would offer seniors a fixed- dollar amount of support based on a competitive bidding process. Aid would be pegged to the second-lowest bid by a health- insurance plan in a geographic area. Beneficiaries could choose more expensive plans, though they would have to pay more while those accepting the less costly plan would get a rebate.

The idea is that insurers would have to compete for seniors' business, which would lower costs. If it doesn't, Ryan's budget has a backup plan -- a cap limiting annual spending increases to the rate of economic growth plus a half percent.