By Julie Appleby, Mary Agnes Carey and Laurie McGinley
KHN Staff Writers
Provided by Kaiser Health News
Seniors and the disabled would pay sharply more for their Medicare coverage under a new plan by House Republicans aimed at curbing the nation’s growing deficit, a Congressional Budget Office analysis shows.
For example, by 2030, under the plan, typical 65 year olds would be required to pay 68 percent of the total cost of their coverage, which includes premiums, deductibles, and other out-of-pocket costs, according to CBO. That compares with the 25 percent they would pay under current law, CBO said.
The GOP budget proposal also would raise the eligibility age for the politically popular program – and repeal big chunks of the health care overhaul law approved by Congress last year.
Budget Committee Chairman Paul Ryan of Wisconsin unveiled the fiscal 2012 budget at a packed press conference where he was flanked by Republican members of the budget panel. The proposal comes amid growing concern over the federal budget deficit and is part of an overall GOP effort to reduce federal spending by at least $5 trillion over the coming decade.
“Washington has been making empty promises for a government going broke,” Ryan said. Unless something is done, “the red ink is going to destroy our economy.”
Besides overhauling Medicare, his 10-year budget proposal also would give states more control over Medicaid, the state-federal program for the poor, but cut the amount states would receive for the program from federal coffers by hundreds of billions of dollars over a decade.
Americans would not be required to buy health insurance, under the proposal – and employers would not have to offer it either. States would not be on the hook to set up new insurance marketplaces.
The changes immediately drew criticism from Democrats and advocates for the elderly and the poor. Many zeroed in on proposed changes to the Medicare program. The Ryan proposal would do away with the traditional Medicare program and shift beneficiaries into private insurance plans in 2022, under a model called “premium support.”
Medicare enrollees would be given a set amount from the government to purchase private plans. Those plans would cost considerably more than traditional Medicare, the CBO says, partly because private plans pay hospitals, doctors and other providers more and have higher administrative costs. At the same time, enrollees would also pay a higher percentage of the overall cost of their coverage.
“What CBO is saying is beneficiaries would pay much less under traditional Medicare for two reasons. The overall cost of the plan would be much cheaper and they would pay a lesser share of that less costly plan,” said Edwin Park of the left-leaning Center on Budget and Policy Priorities.
Ryan’s proposal also would scrap the health care law’s Medicaid expansion and repeal a voluntary long-term care insurance program as well as cancel an advisory board created in the law to recommend changes to Medicare spending.
Ryan appears to have retained the health law’s Medicare payment cuts to hospitals and Medicare Advantage plans.
Chip Kahn, president and chief executive officer of the Federation of American Hospitals, said that Ryan’s plan to repeal the law’s coverage expansions but keep the provider cuts “will severely impact access to essential medical care for seniors, as well as the lowest income Americans.” In last November’s elections, Republicans criticized the Democrats for the Medicare provider cuts, saying they would jeopardize seniors’ access to care.
“They’ve taken those savings – the same ones that they’ve criticized – in their plan,” Budget Committee ranking member Rep. Chris Van Hollen, D.- Md. said, adding that “the health care reforms enacted in the Affordable Care Act, which they say they’re repealing, they’re not repealing at all.”
The CBO highlighted key features of the proposal, based on information from Ryan’s staff and its own analysis, including:
- Starting in 2022, the eligibility age for Medicare would increase by two months per year until it reached 67 in 2033.
- The so-called “doughnut hole” in the Medicare prescription drug benefit – in which beneficiaries pay 100 percent of drug costs – would continue under the Ryan plan. The health law passed last year calls for the coverage gap to be ended by 2020.
- The private plans offered to Medicare enrollees starting in 2022 would have to comply with a standard for benefits set by the Office of Personnel Management, and would have to charge the same premiums for all enrollees of the same age.
- The premium support payments would vary depending on the health status and the incomes of the beneficiaries.
The CBO report also said that in 2022 the average government payment for a 65 year old in Medicare would be $8,000. In each successive year, it would increase to reflect inflation and the enrollee’s age. Patients’ share would rise sharply. Higher-income beneficiaries would get a lower premium support payment.
See Related Video
Ryan, Van Hollen Duel On Medicare Spending In Proposed GOP Budget
House Republican Budget Plans: What It Means, What’s Next
Plans And Proposals
- CBO Outlines ‘Key Features’ Of Ryan Budget Proposal
- Resources & Proposals For Curbing Medicare Cost Growth
- Understanding Rep. Ryan’s Plan For Medicare
- Health On The Hill: What It Means, What’s Next
- Video: Ryan, Van Hollen Duel On Medicare Spending In Proposed GOP Budget
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.
Can we stop having this partisan, corporate-interest hackery on the SDN main page?
Great! Medicare and other entitlements have placed us on the road to financial destruction.
It’s almost blatantly obvious that the 3 journalists who wrote this article are liberals with an agenda. First off, the title is misleading and inaccurate. Under Ryan’s plan seniors will pay LESS since there will be competition among insurance companies so senior’s premiums will go DOWN not up. Let’s get our facts straight.
Next, this Democratic administration is the most fiscally irresponsible group I have ever seen. They are spending money like drunken sailors. Their loose monetary policy is devaluing the dollar and single-handedly creating inflation in the US — which hurts the poor, the middle-class AND SENIORS. Anyone with some knowledge of economics can appreciate the damage the Democrats have caused to this country.
In short, if SDN is going to post liberal garbage like this next week I expect a full article on how Harry Reid was blowing millions of tax payer dollars on the annual Cowboy Poetry conference held in his home state. Money that could have been used towards education, healthcare, etc. Only to keep it fair, you know.
DS
Awesome. This is just scratching the surface of the cuts that need to be made in order to save our country from financial collapse.
Really, DoctorSaib? You better hope your not living pass 65 years old or you better be start saving for the medical cost now! Since you will have to pay all your medical cost by yourself! Oh yea! your a doctor, Im sure you will just write the prescriptions for yourself, that will save you some money! You sure the Democrats are to blame for this fiscal crisis? Who was in charge when the two wars started? Oh right! Bush! Do you know how much a Tomahawk missile cost? The cost of war is not cheap! nor the destruction and suffering it causes is ignorable! So before you point the finger, look at the history moron! This is the problem with this country, people pointing finger!
DoctorSaib, do you even have a clue about economics at all?!
Devaluing the dollar (quantitative easing) is meant to make American goods cheaper and boost US imports and you call that irresponsible?
On the other hand, people need to get the hell over their incessant simplistic urge to turn everything into T.V. melodrama by assigning black hats(Conservatives) and white hats(liberals) to people who are actual humans trying to do an impossibly complex job under the most difficult circumstances in a decade.
And while you are at it, please go read a book and educate yourself.
“and boost US Exports”……not imports
I can’t believe I have to explain this to someone. Listen, the US currently has a huge trade deficit. That means import >>>> exports. Our factories are shut down and our manufacturing jobs have shifted either overseas or into the service industry. QE would only make sense if our economy was like China’s where our exports >>> imports. Only then would making our goods “cheaper” make sense.
As it stands now, the current administration has done tremendous damage to our currency and to ability to stay competitive in the global marketplace. I’m not going to go back and forth on this as it’s very clear to me that a few of you can benefit from basic economics 101 and perhaps a book on Austrian economics.
But let’s focus on the inaccuracies of this article and the 3 liberals with an agenda who wrote it. And for the love of God stop blaming GWB for everything. You will go nowhere with that sclerotic argument.
@Tom’s: Not sure how the wars makes Medicare more expensive which is the topic at hand. Pretty sure the Dems get to take the blame for Medicare.
SDN is a wrong place to ask this poll question. Majority of MD’s want to make more money at the expense of patients and country. Obviously, most of the MD’s are ardent Republicans. This poll would be highly biased.
Really? Competition between insurance companies would lower premiums? How’s that been working for those under 65?
Paul Ryan’s proposal is not serious in the least bit. I mean 25% top tax rate? He’s just trying to move the debate to the far-right so the new “center” will move with him. Instead of a debate between ideas like Medicare-for-all on the left and cutting benefits on the right, we have a debate between simply maintaining Medicare at all and privatising it (putting the elderly at the mercy of profit-seekers). I hope my grandma likes the taste of cat food.
And about QE, any economist worth his weight in salt knows that in a liquidity trap such as this economy is in, loose money (low interest rates) is exactly what is needed.
“Reality has a well-known liberal bias.”- Stephen Colbert
There is no competition in the current healthcare system. Insurance companies do not compete across state lines. That is one big reason why they can charge such high rates. The ball is in their court.
Paul Ryans plan is every bit serious. The US is in serious debt. Our reckless govt continues to spend money it doesn’t have. The time has come for SERIOUS debt control and downsizing of our gov’t. Yesterday’s $38.5 billion cut is peanuts compared to what actually needs to be cut.
All entitlement programs needs to be restructured. I’d start with Social Insecurity — the biggest ponzi scheme of all.
Your liquidity trap argument is an epic fail. Classic Keynesian nonsense. The billions of dollars helicopter Bernake printed and the gov’t spent on banks hoping to stimulate the economy did little for the average American. Why? B/c instead of loaning the money the banks either held onto it or invested it overseas. They made billions in profits. The American tax payer got screwed.
I suggest you hit the economics books again. You can start with Friedman, Sowell or Hayek for a change.
Amazing will be the day when our “educated” look at things for how they ACTUALLY work. When we begin to analyze systems from an energetics standpoint, political and social beliefs will appropriately fall apart.
Nick,
Doctors making “money” at the expense of patients. Do you care to elaborate? Are you accusing physicians of doing multiple procedures to make money? Or are you just implying that physicians should be indentured servants to the masses? Please elaborate. I am anxious to hear your response.
BTW, last time I checked, the patient has to make the initial contact with the physician and agree to the procedures that are suggested. I have never forced anyone to do anything they feel uncomfortable with. Definitely never held anyone down to “take their money” as you seem to be suggesting.
Can we please stop having this partisan, corporate-interest hackery on the SDN main page? Well said AC.
“Under Ryan’s plan seniors will pay LESS since there will be competition among insurance companies so senior’s premiums will go DOWN not up.”
No, they won’t. Ryan’s “plan” doesn’t address health care costs. All it does is shift costs back onto seniors. Competition between insurance companies? Really? What insurance company in their right mind would want to insure a person who is pretty much more likely to A) to have higher costs due to deteriorating health and B) have a shorter life span, thus paying less premiums? Why do you think they invented Medicare to begin with? It’s because those beloved insurance companies of yours didn’t want to insure the elderly.
“Next, this Democratic administration is the most fiscally irresponsible group I have ever seen.”
More fiscally irresponsible than an administration that turned a record surplus into a deficit?
“Their loose monetary policy is devaluing the dollar and single-handedly creating inflation in the US”
Have you read any economists lately? Inflation is so low right now that many are talking about the risk of deflation. Read some Krugman and then we can discuss.
By the way, what is our current inflation rate?
“In short, if SDN is going to post liberal garbage like this next week”
First of all, the CBO definitely did say these things. How reporting that fact is somehow a “liberal bias” is mind boggling. Secondly, I seem to recall an article a few months ago put out by a conservative think tank about health care reform, which needless to say was so full of holes and half truths it looked like Swiss cheese. Spare us the indignation regarding the “liberal media”. There is no such thing. There’s really only the corporate media. And they ain’t liberals. Fox News and CNBC anyone?
“Listen, the US currently has a huge trade deficit. That means import >>>> exports.”
Wow. You actually wrote something that was factually correct. Good Job!
“Our factories are shut down and our manufacturing jobs have shifted either overseas or into the service industry.”
We’re in a recession, skippy. That means demand has been depressed. People aren’t spending money when they’re unsure about their jobs. People aren’t going to invest when they’re unsure if there is even a market for a product. Something needs to shore up demand. That’s why government stimulus was/is needed. And there’s historical precedent for why it works: World War II. Also, a much higher marginal tax rate. But that’s a topic for another day.
“As it stands now, the current administration has done tremendous damage to our currency and to ability to stay competitive in the global marketplace.”
Um, no. If our currency is so bad why are countries continuing to buy treasury bonds, backed in full faith by the government? Don’t tell anyone here to take Economics 101 or to read your free-market extremists from the Austrian school if you’re not even going to bother getting your facts straight.
And whatever our current ability to stay competitive in the global marketplace is, it was/is damaged by lop-sided trade policies like NAFTA (a conservative/free-market bill of goods liked by Democrats and Republicans). Read some History 101.
“And for the love of God stop blaming GWB for everything.”
Drawing attention to the plethora of things he screwed up is not “everything”. I guess you can’t handle the truth: his administration was the worst in the history of the United States.
“Paul Ryans plan is every bit serious. The US is in serious debt.”
Not only is it not serious (there is no way in hell you can eliminate the debt while lowering taxes) it is a fraud. It is physically impossible to get the things it promised. 2.8% unemployment? Really?
“I’d start with Social Insecurity — the biggest ponzi scheme of all.”
Or the most successful and popular social program ever enacted. You don’t even know what a Ponzi scheme is. You also don’t know jack squat about economics other than what you can piece together from that fraud and dictator lover Milton Friedman. Nuff said.
a ponzi scheme is a pyramid where new investors pay out for the first or prior investors…how does that not dscribe soc sec..just beccause something is popular doesnt mean it good….look at cocain and crack