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Medicare one of the clearest rifts between House hopefuls

Matt Varilek1 / 2
Rep. Kristi Noem2 / 2

This is the fourth story in a series on the issues and accusations in South Dakota's U.S. House race.

Medicare has long been called a political third rail: Touch it and die. But increasingly, politicians in both major parties are willing to discuss how to save, alter or improve Medicare. They greatly differ on how they would do it.

Rep. Kristi Noem, a Republican, and Matt Varilek, her Democratic challenger for South Dakota's lone House seat in the Nov. 6 election, disagree sharply on the future of Medicare, and also criticize the other for their stance on the program.

Medicare was enacted July 30, 1965, and today, 49.4 million Americans rely on it to help cover health-care costs, according to According to the website, 141,079 South Dakotans use the program in 2012. That's 17 percent of the state's population, higher than the national average of 15 percent.

Most of those South Dakotans on Medicare are seniors, with 86.4 percent of Medicare users being 65 and older. For many of these residents, and voters, it's a major issue.

Noem said she supports a proposal by Wisconsin Rep. Paul Ryan, the Republican congressman who is now the GOP vice-presidential nominee, and Sen. Ron Wyden, D-Ore. It calls for leaving the program as it is for people 55 and older, and creating a voucher system to "empower" people to purchase health care, as well as providing an option to stay on the current program.

If no action is taken, she said, Medicare will go bankrupt by 2024.

"I support a bipartisan plan that would save and strengthen Medicare for future generations, put patients in control of their own health care decisions and ensure nothing changes for anyone 55 or older," she wrote in an op-ed piece.

Varilek said he favors reforms to reward effective treatment, cut prescription drug costs and prosecute fraud.

"Medicare has played an essential role in improving the lives and health of America's senior citizens," he said after issuing a Medicare position paper this summer. "My plan will help to ensure it plays that same role far into the future. This is a major area of disagreement with my opponent, who has twice voted to privatize Medicare, jack up health care costs for South Dakota seniors, and give new tax breaks to the wealthiest Americans. Those priorities are upside-down, and I'm in this race to tip the balance back in favor of regular South Dakotans.

"I believe we must address our long-term fiscal challenges with a balanced approach that keeps our promise of guaranteed, affordable coverage for future Medicare beneficiaries, while meeting the needs of millions who rely on Medicare today," Varilek said.

Noem has said the Affordable Care Act, which has been dubbed Obamacare, would cut $716 billion from Medicare.

Varilek said that is incorrect.

Instead, the president sought to cut $716 billion from overpayments to insurance firms and hospitals, not people, he said. Former President Bill Clinton made the same argument during his recent speech at the Democratic National Convention.

PolitiFact, a Pulitzer Prize-winning investigative website, agreed with Varilek and Clinton.

Varilek said it is the Ryan-Wyden plan that would actually trim $716 billion from Medicare as part of Ryan's proposal to cut spending, while shifting costs to individuals. He said Noem is backing a proposal that would cripple or even kill Medicare.

Noem, however, has said she supports the plan because she wants to preserve Medicare to ensure it is still there for people in the future. If hard choices are not made, she warns, it will go bankrupt.

That's why she supports the Ryan plan. On the other side, Varilek supports President Obama's health care law, Noem said.

She wants to repeal the law and restore what she terms "cuts" in Medicare.

"Kristi Noem has voted for a bipartisan plan to ensure that Medicare is there for South Dakotans when they need it without changing the way those at or near retirement receive their care," said her campaign manager, Tom Erickson. "Medicare is going bankrupt, yet Matt Varilek has no real plan to protect South Dakota seniors."

Varilek said he welcomes the debate.

"This is one of the clearest differences between us," he said. "I released a plan for preserving and strengthening the traditional Medicare program that is so effective for so many South Dakota seniors. Rep. Noem twice voted for a radical plan that would dismantle traditional Medicare, subject seniors to the decision making of private insurance companies, and cost the average participant potentially as much as an extra $6,400 per year.

"Worst of all, Rep. Noem would impose that kind of sacrifice on seniors partly to finance huge new tax breaks to the wealthiest Americans. Those are outrageous priorities, and I'm in this race to defend South Dakota seniors against such priorities."

The Noem camp said Varilek is continuing his "pattern of dishonest campaigning" by claiming that the Ryan-Wyden plan would cost seniors an extra $6,400 a year.

PolitiFact said that there isn't enough data for Democrats to make such a claim.

"We've rated similar claims from Democrats about that extra cost, rating them 'Half True' and 'Mostly False' because they rely on an analysis of an outdated Republican plan," the website states.

"There is one clue that under the proposal, extra costs for seniors who wanted to keep traditional Medicare wouldn't come close to $6,400," PolitiFact reported. "A study published Aug. 1, 2012, in the Journal of the American Medical Association says that if Ryan's plan had been in place in 2009, the cost of the second cheapest Medicare Advantage plan (and thus the size of the premium support payment) would have been 9 percent less than traditional Medicare. That would have required an out-of-pocket payment for seniors who wanted to use traditional Medicare of $64 a month -- which adds up to less than $800 a year.

"Meanwhile, under the Ryan plan, seniors could also choose to buy the plan covered entirely by the premium support payment -- for no extra out-of-pocket cost. And all plans offered under the proposal would have to provide at least the actuarial equivalent of traditional Medicare."

However, PolitiFact reports, without more details from Ryan and an updated CBO analysis, it's unclear what would occur if new, marketbased payments grew faster than the Ryan plan's cap on Medicare spending.

Varilek's campaign manager, David Benson, said they will keep using that figure.

"We are basing the $6,400 figure on the most recent CBO report," Benson said.

"There is no disputing the fact that Congresswoman Noem voted for a plan that would cost seniors close to $6,400 in out-of-pocket costs. We will continue to discuss this fact with South Dakota voters to make it clear: Matt Varilek is the only candidate in this race that supports preserving and strengthening traditional Medicare for seniors now and in the future."

Varilek said one thing is clear: Noem's support of the Ryan plan is dangerous for people who rely on Medicare or plan to use it in the future.

"Rep. Noem voted twice for budget plans that include significant Medicare cost savings through reducing payments to certain health providers and insurance companies," he said. "Yet she criticizes me for supporting those very same savings. Unlike some politicians who have flip-flopped on an issue, she is both for the savings and against them at the very same time -- not exactly a case of being straightforward with South Dakotans."

The Noem camp disagrees.

"Matt is trying to scare South Dakota seniors by falsely claiming that Kristi Noem wants to 'end Medicare,' " Erickson said. "This charge is so over the top that PolitiFact called it 2011's 'Lie of the Year.'

"Matt is also lying to South Dakotans by saying he has a plan for Medicare. He has no plan to save the program from bankruptcy -- all he has is a set of talking points with empty promises and hollow rhetoric."