Medicare privatization plans gets new name

Three proposals to privatize Medicare in Congress are similar to Rep. Paul Ryan's voucher program, but they are no longer called premium support plans. Essentially, the plan is similar to that of Ryan, R-Wis., but this time they are called "competitive bidding" healthcare plans, National Journal reported. Under Ryan's program to cut the cost of Medicare spending, seniors and people with disabilities would get a lump sum of money from the government each year to buy health insurance in the private market. However, if the senior had an expensive illness or extended hospital stay, he or she might have to pay the difference of what the insurance plan paid and the real cost of the illness out of his or her own pocket. There have been several proposals to privatize Medicare and while the plans remain essentially the same, only the names have been changed, the Columbia Journalism Review reported. "Premium support" was used because the government was supporting seniors to pay a private health insurance premium. Another Medicare privatization program was called "defined contribution," because in the context of Medicare, the government decided how much of a contribution to make toward private health insurance premiums. The term is borrowed from pension terminology, introduced by Ronald Reagan in the 1980s as "defined contribution," or 401(k), plans, which allowed the company to define if, or how much of a contribution, it would pay to an employee's retirement investment account. The employee also defined how much to put into his or her 401(k). This replaced the "defined benefit" plans, used to describe old-fashioned company pension plans -- defined by age and number of years worked at the company -- and paid until the worker died.