Ryan Plan Ends the Promise of Guaranteed Health Care for Seniors who Rely on Medicare for Health Care

No matter what you read in today's paper, here is the real fact: the Paul Ryan plan ends the promise of guaranteed health care for seniors who rely on Medicare for health care.

Forty-six million Americans rely on Medicare for health care, and about half of those live on incomes of less than $30,000 per year.  For these seniors, Medicare is relied upon and is essential for health care, which is incredibly expensive, is getting more expensive, and which is even more expensive for seniors.

Here are some real facts:

• The Ryan plan means an end of the guarantee of heath care for Seniors under Medicare, and an end to guaranteed health care.

While the Ryan plan lacks the specifics required in the legislative process, the proposal would end Medicare’s basic guarantee of access to care. Ryan would replace the practice of having the federal government reimburse providers for covered services with a system providing limited support for beneficiaries to enable them to purchase coverage from private insurers. The federal government would pay a health plan a set amount toward the cost of the premium; if the federal subsidy is insufficient, it would be up to the Medicare enrollee to cover the difference. Larger subsidies would be provided to lower-income beneficiaries and to those with greater health risks; subsidies would grow over time, but at a lower rate than medical inflation. With the subsidy covering a smaller share of the premium over time, Medicare beneficiaries would either have to pay more or buy a less generous plan. As the Congressional Budget Office (CBO) notes, Ryan’s plan would raise the total cost of health care for Medicare enrollees by 25-45%.  The Ryan plan is essentially a cost-shifting approach to long-term deficit reduction.

• The Ryan plan replaces the guarantee of Medicare with a voucher system that transforms the program and necessarily sharply reduces health care benefits for Seniors.

Ryan's plan gives beneficiaries a fixed amount of money that they can use to buy insurance in the private market. This is what most people would consider a voucher system. The Congressional Budget Office's projections indicate that it would raise the cost of buying Medicare equivalent policies by $34 trillion, approximately 5 times the size of the projected Social Security shortfall.

• In addition to the information above, here is additional info on how benefits for Seniors in Medicare will be reduced as it is a voucher program.  $39 trillion less in health care for Seniors over the 75 year planning period is a significant difference between Medicare and the Ryan Voucher plan 

The Republicans can try to deny that their plan actually ends Medicare and hope that voters will be sufficiently confused that they won’t hold the vote against them. They have already been staking out this ground, claiming that they just want to “change” Medicare. Instead of saying that they would give beneficiaries a voucher to use to buy a health insurance policy, which would allow people to understand their proposal, they are instead saying that it is a system of “premium support,” which is a term that no one understands.

This may help with a few pundits, but if the Republicans can’t keep their political opponents from pointing out that their plan actually does replace Medicare’s insurance with a voucher system, this silly charade will not buy them much. People know the difference between being handed a check for $8,000 and being told to go buy insurance and the current Medicare system, which covers most of the cost of most care. According to the Congressional Budget Office, this difference comes to $39 trillion over Medicare’s 75-year planning period, more than five times the size of the projected Social Security shortfall.

• Additionally, here is some info on the disparities in future projections of current Medicare and Ryan Voucher plan (also note the rather strong analysis on how an AP 'fact check' got some key items wrong)

According to the Congressional Budget Office's (CBO) projections, the cost of a Medicare equivalent plan for a person at age 65 would be equal to 44 percent of the median person's income by 2030. It would have risen to 68 percent of the median 65-year old's income by 2050. (This ignores the fact that the plan increases the age of eligibility to 67 by 2046. )

Health care costs are higher for older retirees. CBO's projections imply that by 2050 the cost of a Medicare equivalent plan for someone age 75 would be 143 percent of the median 75-year-old's income and 200 percent of the median 85-year-old's income. Given the huge gap between the cost of care and the ability of seniors to pay it is wrong to imply, as Fact Check does, that the Ryan plan in any way ensures that seniors will get decent coverage. As Wasserman claimed, if the Ryan subsidy is insufficient to pay for care, the plan tells seniors that they are on their own.

• Ryan plan ends guaranteed Medicare and introduces privatization

Under the Ryan-Rivlin proposal, Medicare beneficiaries would no longer have access to a guaranteed set of health benefits but would instead receive a voucher to be used to purchase private health insurance.  

• Finally, this analysis from columnist Paul Krugman is insightful

The plan would replace our current system, in which the government pays major health costs, with a voucher system, in which seniors would, in effect, be handed a coupon and told to go find private coverage.

The new program might still be called Medicare — hey, we could replace government coverage of major expenses with an allowance of two free aspirins a day, and still call it “Medicare” — but it wouldn’t be the same program. And if the cost estimates of the Congressional Budget Office are at all right, the inadequate size of the vouchers — which by 2030 would cover only about a third of seniors’ health costs — would leave many if not most older Americans unable to afford essential care.