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By Bill Wichert September 10, 2012

Republicans plan to convert Medicare into a “voucher program,” Democratic congressional candidate says

From state Assemblyman Upendra Chivukula to President Barack Obama, Democratic leaders have been denouncing what they consider the Republicans’ plan to turn Medicare into a voucher system.

Chivukula, who is looking to unseat Republican Congressman Leonard Lance this November, repeated that claim in a TV interview leading up to the Democratic National Convention in Charlotte, N.C.

"The Republicans have declared war on women," Chivukula, who represents parts of Middlesex and Somerset counties, said in the Aug. 31 interview on NJToday. "They have declared that they’re going to convert the Medicare program into a voucher program."

PolitiFact National issued a Mostly True ruling on a similar claim made by Obama last month. The president claimed Republican presidential candidate Mitt Romney and his running mate, Paul Ryan, "want to turn Medicare into a voucher system."

Just as in that fact-check, Chivukula’s claim is mostly on solid ground.

The Medicare proposal backed by Romney and Ryan would provide "premium support" payments to future beneficiaries to purchase health insurance. There are some distinctions between the two terms, but the word "voucher" generally describes this approach.

Chivukula told us "voucher" is an appropriate way of describing the proposal, adding that the system would force beneficiaries to shop around for coverage.

First, let’s explain how the plan works.

Under the traditional Medicare program, which is available to anyone 65 or older, the government pays health care providers directly for services. Beneficiaries must bear the cost of deductibles and co-insurance.

Ryan, a Wisconsin congressman, has been the chief architect of a proposal to dramatically restructure Medicare. Romney has said his and Ryan’s Medicare plans are the "same if not identical -- it’s probably close to identical."

The latest version of Ryan’s plan was approved in March by the GOP-controlled House as part of a budget resolution, but it was later rejected by the Democrat-led Senate.

The plan would not affect current Medicare beneficiaries and individuals who become eligible before 2023. But starting in 2023, newly eligible beneficiaries would receive a premium support payment to purchase private insurance or a plan that acts like traditional Medicare. The payments would either pay for or offset the cost of health care premiums.

In a report accompanying their budget resolution, House Republicans argued the proposal was not about providing vouchers.

"This is not a voucher program; a Medicare premium-support payment would be paid, by Medicare, directly to the plan or the fee-for-service program to subsidize its cost," according to the report.

So, the claims by Obama and Chivukula raised the same question: Is it reasonable to refer to premium support payments as vouchers?

As our PolitiFact colleagues noted, there are distinctions between the two terms, dealing with the type of inflation adjustment used and the degree of marketplace regulation imposed. Ryan’s most recent plan more closely reflects a pure premium support, but substantively, it’s somewhere between the two approaches.

Henry Aaron, a senior fellow of economic studies at the Brookings Institution, a policy think tank, told PolitiFact National "that premium support is a type of voucher."

But Robert Moffit, a health policy analyst at the conservative Heritage Foundation, told PolitiFact National that the Obama campaign’s use of the term "voucher" is not justified, since the Ryan plan includes more regulation than for, say, airline vouchers for food and drink.

Our ruling

In a TV interview, Chivukula claimed Republicans "have declared that they’re going to convert the Medicare program into a voucher program."

Starting in 2023, the Republicans’ plan would provide premium support payments for new beneficiaries to purchase private insurance or a plan that acts like traditional Medicare. The term "voucher" generally describes this approach.

We rate the statement Mostly True.

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Our Sources

NJToday, NJ Democrats Prepare for National Convention in Charlotte, Aug. 31, 2012

PolitiFact, Do Mitt Romney and Paul Ryan want to turn Medicare into a voucher program?, Aug. 16, 2012

The Path to Prosperity: A Blueprint for American Renewal, accessed Aug. 17, 2012

THOMAS, House Concurrent Resolution 112, accessed Sept. 7, 2012

Congressional Budget Office, The Long-Term Budgetary Impact of Paths for Federal Revenues and Spending Specified by Chairman Ryan, March 2012

Congressional Research Service, Overview of Health Care Changes in the FY2013 Budget Proposal Offered by House Budget Committee Chairman Ryan, March 29, 2012

Interview with Upendra Chivukula, Sept. 7, 2012

National Review Online, That Terrifying Medicare Voucher Threat, Sept. 4, 2012

The Washington Post, Senate rejects Obama budget, Republican alternatives, May 16, 2012

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More by Bill Wichert

Republicans plan to convert Medicare into a “voucher program,” Democratic congressional candidate says

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