Path 2

News Wednesday, Oct 10 2012

BRIDGE BRIEFING: Ryan And Medicare

Oct 10, 2012

The Ryan Plan Would End Medicare As We Know It By Turning The Program Into a Voucher

Wall Street Journal: Ryan Plan Would “Essentially End Medicare.” According to Naftali Bendavid at the Wall Street Journal, “The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills.” [Wall Street Journal, 4/4/11]

Wall Street Journal: Romney’s Proposal Would Privatize Medicare. According to the Wall Street Journal, “Mitt Romney waded into the hot-button issue of Medicare, proposing to offer future seniors a choice between the current fee-for-service health plan or a voucher to purchase health insurance plans offered by private insurance companies. The Romney Medicare plan could become a hallmark of the 2012 presidential campaign should he win the Republican nomination. Democrats had already planned to make the Ryan plan a centerpiece of their efforts to unseat Republicans in Congress. Now, Mr. Romney has thrust Medicare privatization into the presidential race.” [Wall Street Journal, 11/4/11]

Medicare Would Be Turned Into A Voucher System

Politifact: Claim That Ryan’s Budget Plan Would Turn Medicare Into A “Voucher” Was Mostly True. According to Politifact, “U.S. Sen. Robert Menendez yesterday attacked a Medicare reform proposal from Republican vice presidential nominee Paul Ryan by claiming it would turn the health care program into a voucher system…It’s accurate that Ryan’s plan, starting in 2023, 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.” [Politifact, 10/5/12]

Ryan’s Alternative Plan To The Health Care Bill Replaced Medicare For Everyone Under 55 With A Voucher System. According to a New York Times column, “In recent weeks, critics have done a nice job highlighting flaws in the White House plan (which Congress is now turning into an actual bill). What the critics have not done nearly so well, however, is explain which politically realistic plan they prefer.  Paul Ryan, the top Republican on the House Budget Committee, has admirably produced a detailed alternative to the Democrats’ plan. It would balance the budget by getting rid of Medicare for everyone under 55 and replacing it with a voucher system. When I recently asked another high-ranking Republican what he thought about the Ryan plan, however, he replied, ‘Paul is very thoughtful.’ Follow-up questions did not yield further details  So I agree that health reform should do more to reduce spiraling medical costs. But saying so doesn’t qualify as hard-headed fiscal realism. In fact, it’s the easy thing to say. The bigger issue is how policy makers can achieve the goal, given the political realities.” [The New York Times, Column, 3/10/10]

Guaranteed Benefit For Individuals Turning 65 Would Be Eliminated

The Ryan Medicare Bill Called For Beginning In 2022, Individuals Turning 65 Would No Longer Would Receive A Guaranteed Benefit, The Government Would Provide A “Premium Support” That Would Be Adjusted Annually For Inflation. According to Health and Social Work, “A central component of the Ryan bill is its transformation of Medicare from a defined benefit plan to essentially a defined contribution plan. Beginning in 2022, individuals turning 65 would no longer receive Medicare’s traditional guaranteed benefit. Instead, the government would provide a sum of money ($8,000), or a ‘premium support’ which would be applied toward the purchase of private health insurance. This payment would be ‘adjusted’ on the basis of an individual’s health, age, and income (Kaiser Family Foundation Program on Medicare Policy, 2011). Plans would be required to cover all Medicare-eligible individuals and ‘charge the same premiums to individuals in the same age group’ (p. 4). Although plans would have to cover certain benefits, it is unlikely that ‘a uniform or specified defined set of benefits’ (Kaiser Family Foundation Program on Medicare Policy, 2011, p. 2) would be required.” [Health & Social Work, 8/1/11]

Opt-out For New Enrollees Would Jeopardize Benefits For Current Recipients

Ryan Plan Would Set Off A Spiral Of Increased Premiums For Traditional Medicare As Healthy Individuals Abandoned It For Private Plans. According to the Center On Budget and Policy Priorities, “Second, Chairman Ryan claims that his proposal ‘ensur[es] that traditional Medicare remains an option.’ Unfortunately, that’s not the case. Under premium support, traditional Medicare would tend to attract a less healthy pool of enrollees, while private plans would attract healthier enrollees (as occurs today with Medicare and private Medicare Advantage plans). Although the proposal calls for ‘risk adjusting’ payments to health plans — that is, adjusting them to reflect the average health status of their enrollees — the risk adjustment process is highly imperfect and captures only part of the differences in costs across plans that stem from differences in the health of enrollees. Inadequate risk adjustment would mean that traditional Medicare would be only partially compensated for its higher-cost enrollees, which would force Medicare to raise beneficiary premiums to make up the difference. The higher premiums would lead more of Medicare’s healthier enrollees to abandon it for private plans, very possibly setting off a spiral of rising premium costs and falling enrollment for traditional Medicare. Over time, traditional Medicare would become less financially viable and could unravel — not because it was less efficient than the private plans, but because it was competing on an unlevel playing field in which private plans captured the healthier beneficiaries and incurred lower costs as a result. Ryan also would allow private plans to tailor their benefit packages to attract healthier beneficiaries and deter sicker ones, which only makes this outcome more likely.” [Center On Budget and Policy Priorities, 3/28/12]

Opt-Option Would Increase Costs For Current Recipients By Reducing Bargaining Power And Making The Risk-Pool Older And Sicker. According to the Center On Budget and Policy Priorities, “Third, Chairman Ryan says that his proposal would not affect people age 55 and older, but this claim would likely turn out untrue. As fewer new beneficiaries enrolled in traditional Medicare when they reached the eligibility age, the population in traditional Medicare would gradually get older, sicker, fewer in number, and much more expensive per person to cover. Moreover, as the size of the Medicare population shrank, administrative costs would rise relative to benefit payments, traditional Medicare’s power to demand lower payment rates from providers would erode, and providers would have less incentive to participate in the program. As a result, people now age 55 and older might well face higher premiums and cost sharing for traditional Medicare, a more limited choice of providers, or both.” [Center On Budget and Policy Priorities, 3/28/12]

Opt-Out Option For Younger Employees Would Lead To Higher Medicare Premiums Or Reduced Benefits As the Risk-Poll Shrinks. According to the National Journal, “The plan to grandfather traditional Medicare for those older than 55 could also have negative consequences for current seniors: In 2022, when the limited-subsidy program would be introduced, seniors who qualified for traditional Medicare would be allowed to switch to the new program. If healthier or younger beneficiaries make the change to lower their out-of-pocket costs, those still participating in Medicare would be part of an insurance pool that is less healthy and more expensive. To cover those higher per-person costs, Medicare might well be forced to either raise premiums or limit reimbursements to health care providers—which could prompt many to stop taking Medicare patients. [National Journal, 6/6/11]

Future Enrollees Would Be Forced To Buy Private Coverage

Editorial: The Ryan Plan Would Make Future Medicare Enrollees “Buy Private Medicare Coverage, But The Government Would Pick Up Some Of The Cost,” And Would Block-Grant Medicaid; Should Be Means-Tested. According to the Seattle Times, “Entitlements require a limit. For most of the programs the money should be limited to the people with the greatest need. Medicare may have to be means-tested. Rep. Paul Ryan, R-Wis., has proposed that future Medicare enrollees buy private medical coverage, but the government would pick up some of the cost. How much might depend on the income of the recipient. Ryan also proposed that Medicaid, which is already means-tested, be block-granted to the states. It is a harsh proposal, but it does solve the problem. From the liberal side there is a thought of a single-payer system for everyone, which could be harsh in a different way. Both approaches are radical departures from what exists now, but each may contain some element of a solution that would work, and that Americans would accept.” [Seattle Times, 9/18/11]

Seniors Would Be Offered An “Allowance” To Stay On Existing Medicare System

The FY 2013 Ryan Plan Offered Seniors An “Allowance” That Would Be Used To Buy Private Insurance Or Stay In The Existing Medicare System. According to the New York Times, “Instead, the elderly would be offered an allowance that could be used to buy a private plan or the existing government coverage, a proposal embraced by the House Budget Committee chairman, Paul D. Ryan, Republican of Wisconsin, and Senator Ron Wyden, Democrat of Oregon. House Republicans are using Mr. Wyden’s name as a political shield. In an interview, Ms. Hayworth used the term Wyden-Ryan three times. But some Republicans are returning to the Medicare fight with trepidation this election year.” [New York Times, 3/13/12]

Under The Ryan Plan, Medicare Would Face Reduced Spending And Higher Costs

Boston Globe: Ryan Plan Would Cut More Than $5 Trillion In Spending, Built Around Drastic “Reshaping” Of Medicare. According to The Boston Globe, “Ryan’s plan would cut more than $5 trillion in spending over the next decade, built around a drastic reshaping of Medicare and other federal entitlement programs, and would lower the tax rate for the nation’s top earners.” [The Boston Globe, 4/13/11]

The Ryan Plan Would Cause Seniors To Pay More In Out-Of-Pocket Costs 

The Congressional Budget Office Concluded That Under Ryan’s 2011 Medicare Plan “Most Elderly People Would Pay More For Health Care.” According to New York Times, “Analyzing the 2011 proposal for Medicare, the Congressional Budget Office said that ‘most elderly people would pay more for their health care’ — $6,400 on average by 2022 — requiring older Americans to ‘reduce their use of health care services, spend less on other goods and services, or save more in advance of retirement.’ Since then, Mr. Ryan has said beneficiaries could keep existing Medicare benefits, though that concession could significantly reduce the savings he seeks.” [New York Times, 8/11/12]

A CBO Analysis Found That The Ryan Plan Would “Shift The Work Of Trying To Keep Up With Medical Inflation To Individual Retirees.” According to the Dallas Morning News, “The chief drawback, according to the Congressional Budget Office, is that Ryan’s plan would shift the work of trying to keep up with medical inflation to individual retirees. Seniors would have to cover thousands of dollars of medical bills.” [Dallas Morning News, 10/26/11]

Ryan Plan Would Cap The Value Of Medicare Coverage In Future Years And “Would Shift Some Costs To Future Retirees.” According to the Milwaukee Journal Sentinel, “House Republicans, spearheaded by Rep. Paul Ryan (RWis.), have proposed capping the value of Medicare coverage in future years. That would shift some costs to future retirees, although Ryan’s proposal would include subsidies for people with limited incomes.” [Milwaukee Journal Sentinel, 5/22/11]

The Ryan Plan Would Double Out-Of-Pocket Costs For Seniors While Cutting Spending On Medicaid. According to Sun-Sentinel, “The Ryan budget plan would cut federal spending on Medicaid, which provides health care for the poor, and begin distributing money by block grant to states. The plan would do away with Medicare’s direct payment for health care for seniors, replacing it with a voucher system in which recipients choose private insurers. The Congressional Budget Office found that part of the plan, which would take effect in 2022, could nearly double out-of-pocket costs for seniors.” [Sun-Sentinel, 4/16/11]

…Even If Private Plans Became Cheaper

Under Ryan’s Plan, Seniors Would Pay More For Medicare Even If Private Plans Became Cheaper. According to Politico, “Traditional Medicare would still be an option — but you might pay more Ryan’s first Medicare plan got hammered for not keeping traditional Medicare around for future seniors who want it — a provision that Romney also favored. So Ryan changed course. He worked out a new version with Democratic Sen. Ron Wyden of Oregon that would keep traditional Medicare for seniors who want it. And that’s how his latest House-passed budget works. That doesn’t mean they can just keep it and not pay more, though. If traditional Medicare ends up costing more than some of the private plans it’s competing with, seniors would have to pay the difference. Here’s how it works: The amount of money the government would put in would be set by the prices of the competing plans, and would either be the second-least-expensive private plan or traditional Medicare — whichever one is cheaper. But if a senior chooses a plan that’s more expensive than the government allowance, the extra cost will come out of pocket. So if they want traditional Medicare, and it’s not the cheapest plan, they’ll pay extra.” [Politico, 8/11/12]

…And Would Reduce Beneficiary Spending By Up To 42%

Ryan Budget Would Result In Reduced Federal Spending On Each Medicare Beneficiary By 35-42%, Forcing Beneficiaries To Cover Remaining Cost Out Of Pocket. According to the Center for Budget and Policy Priorities, “The Ryan plan would also replace Medicare’s guarantee of health coverage with premium-support payments to seniors (starting with new beneficiaries in 2023) that they would use to buy coverage from private insurance companies or traditional Medicare. The growth in these payments each year would be limited to the percentage increase in per capita GDP plus one-half percentage point. For more than 30 years, however, health care costs per beneficiary in the United States have risen an average of about two percentage points per year faster than GDP per capita. CBO thus projects that under the Ryan budget, federal Medicare expenditures on behalf of an average 67-year-old beneficiary would, by 2050, be 35 percent to 42 percent lower than under current law. Under the Ryan budget, moreover, Medicare would no longer make payments to health care providers such as doctors and hospitals; it would instead provide premium-support vouchers to beneficiaries that they’d use to help buy coverage from private insurance companies or traditional Medicare. Therefore, the only way to keep Medicare cost growth within the GDP +0.5 percentage-point target would be to limit the annual increase in the government’s premium-support vouchers. That would very likely cause the vouchers to grow more slowly than health care costs — and hence purchase less coverage with each passing year. Over time, more costs would likely be pushed on to beneficiaries.” [Center for Budget and Policy Priorities, 3/20/12]

Ryan Plan Would Raise The Eligibility Age From 65 To 67 While Providing No Safety Net

Ryan’s Plan Would Raise The Medicare Eligibility Age To 67 By 2034. According to the Charlotte Observer, “Ryan’s plan would gradually raise the Medicare eligibility age to 67 by 2034. It would cap Medicare spending growth and turn Medicaid, the federal health program for the poor, over to the states in the form of a federal block grant for each state. His budget would give future Medicare beneficiaries – people now under 55 — money to buy either a private health plan or a government-administered plan through a new Medicare exchange.” [Charlotte Observer, 7/18/12]

Ryan Budget Would Raise Medicare Retirement Age From 65 To 67, But Also Repeal Affordable Care Act – Thereby Leaving 65 And 66-Year-Old Individuals Without Any Guarantee Of Health Insurance. According to the Center for Budget and Policy Priorities, “The CBO analysis states that the Ryan plan would raise the age at which people become eligible for Medicare from 65 to 67, even as it repeals the health reform law’s coverage provisions. This means 65- and 66-year-olds would have neither Medicare nor access to health insurance exchanges in which they could buy coverage at an affordable price and receive subsidies to help them secure coverage if their incomes are low. This change would put many more 65- and 66-year-olds who don’t have employer coverage into the individual insurance market, where the premiums charged to people in this age group tend to be extremely high — thereby leaving many of them uninsured. People of limited means would be affected most harshly because they would not be able to afford private coverage. In addition, many 65- and 66-year-olds with a pre-existing medical condition would not be able to purchase coverage at any price.” [Center for Budget and Policy Priorities, 3/20/12]

The Ryan Plan Included The Same Medicare Savings Ryan Used To Attack President Obama

Ryan Said Obama “Funneled” $716 Billion From Medicare To Fund The Affordable Care Act. According to Romney For President, during his speech to the Republican National Convention in Tampa, Ryan said “…even with all the hidden taxes to pay for the health care takeover, even with new taxes on nearly a million small businesses, the planners in Washington still didn’t have enough money. They needed more.  They needed hundreds of billions more. So, they just took it all away from Medicare. Seven hundred and sixteen billion dollars, funneled out of Medicare by President Obama. An obligation we have to our parents and grandparents is being sacrificed, all to pay for a new entitlement we didn’t even ask for. The greatest threat to Medicare is Obamacare, and we’re going to stop it.” [Romney For President, 8/29/12]

FactCheck.Org: Ryan Criticized Obama’s Medicare Savings, Yet Proposed The Same Cuts In His Budget Plan. According to FactCheck.Org, “Ryan himself proposed keeping most of these same spending cuts in his most recent ‘Path to Prosperity’ budget. Yet, Ryan criticized Obama’s cuts as ‘the biggest, coldest power play of all’ and suggested seniors would suffer as a result. Ryan, Aug. 29: And the biggest, coldest power play of all in Obamacare came at the expense of the elderly. … [T]hey just took it all away from Medicare, $716 billion funneled out of Medicare by President Obama. The Affordable Care Act calls for a $716 billion reduction in the future growth of Medicare spending over 10 years, with most of that — about $415 billion — coming from a reduction in the future growth of payments to hospitals through Medicare Part A. And Medicare Part A’s trust fund, as we’ve explained before, is in trouble financially. It’s set to be insolvent in 2024, even with these spending cuts. Without them, the trust fund wouldn’t be able to fully pay projected benefits in 2016, the Medicare trustees estimate.” [FactCheck.Org, 8/30/12]

Ryan Has Spent His Career Trying To Cut Medicare

Associated Press: Ryan Has Been Talking About Plan To Scale Back Medicare Coverage For Senior Citizens For Years. According to The Associated Press, “Most voters in Rep. Paul Ryan’s district in Wisconsin are familiar with his plan to scale back Medicare coverage for senior citizens. He has been talking about it for years as a way to keep the Medicare program solvent. But the possible impact became more real to his friends and neighbors this week when House Republicans declared that they will make the Ryan plan an issue in the 2012 elections. Some voters say they give Ryan credit for tackling the problem. But many also worry senior citizens might not be able to get needed medical treatment without full Medicare coverage. The issue has been the talk of the town, and opinion is divided. The debate helps explain why most politicians, including presidential hopefuls, won’t talk specifically about the plan.” [The Associated Press, 4/10/11]

2010: Ryan’s Alternative Plan To The Health Care Bill Replaced Medicare For Everyone Under 55 With A Voucher System. According to a New York Times column, “In recent weeks, critics have done a nice job highlighting flaws in the White House plan (which Congress is now turning into an actual bill). What the critics have not done nearly so well, however, is explain which politically realistic plan they prefer.  Paul Ryan, the top Republican on the House Budget Committee, has admirably produced a detailed alternative to the Democrats’ plan. It would balance the budget by getting rid of Medicare for everyone under 55 and replacing it with a voucher system. When I recently asked another high-ranking Republican what he thought about the Ryan plan, however, he replied, ‘Paul is very thoughtful.’ Follow-up questions did not yield further details  So I agree that health reform should do more to reduce spiraling medical costs. But saying so doesn’t qualify as hard-headed fiscal realism. In fact, it’s the easy thing to say. The bigger issue is how policy makers can achieve the goal, given the political realities.” [The New York Times, Column, 3/10/10]

Ryan’s 2009 Budget Alternative Included Cuts To Social Security And Medicare. According to The Washington Post, “The lack of a Republican alternative to the budget has been a sore spot for the party, which is trying to shake the image that it is the ‘party of no.’ GOP leaders were roundly ridiculed last week when the ‘budget’ they unveiled turned out to be a 19-page brochure without any numbers. Rep. Paul Ryan (Wis.), the top Republican on the House Budget Committee, tried again yesterday at a news conference in the House TV studio. This time, the document had ‘real numbers,’ he boasted, including cuts to Social Security and Medicare that made it a political non-starter. ‘This is a bill which reflects the consensus of our conference,’ Ryan announced. Oh? Within minutes of Ryan’s news conference, word spread that the conservative Republican Study Committee, a group representing 111 of the 178 House Republicans, would be issuing a budget plan of its own today.” [The Washington Post, 4/2/09]

2008: Ryan Proposed Giving Seniors $9,500 To Buy Private Health Insurance In 2018. According to National Journal’s Congressdaily, “House Budget Committee ranking member Paul Ryan unveiled legislation today that would restructure the tax code to reduce healthcare and retirement entitlement spending. The nation is ‘trying to meet the needs of a rapidly changing world with outdated programs that are growing themselves right into extinction,’ Ryan said at a press conference. Under Ryan’s plan, individuals who are not enrolled in Medicare or military health plans would receive a $2,500 tax credit — $5,000 for families — that can be used in any state to help purchase healthcare coverage. The proposal would initially preserve Medicare for those over 55. But for those under 55, the plan would provide a $9,500 payment that would be adjusted for inflation and based on income. He said the bill would strengthen Medicaid by reforming high-risk pools and giving states maximum flexibility to tailor Medicaid programs to the specific needs of their populations. For Social Security, the plan would keep the system as is for people over 55, but allow workers under 55 the option of investing over one-third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees.” [National Journal’s Congressdaily, 5/21/08]

Ryan Proposed Deep Cuts To Medicare In 2007. “Ryan said Republicans opposed the measure because they considered the SCHIP and Medicare legislation an expansion of government-run health care, which they philosophically oppose. Ryan offered an alternative budget this year that would slice deeply into the growth of Medicare, but Democrats opposed his plan.” [National Journal’s Congressdaily, 10/05/07]

Ryan Even Proposed Block Granting Medicare In 2008

2008: Ryan Proposed Block Granting Medicare. According to National Journal’s Congressdaily, “House Budget Committee ranking member Paul Ryan unveiled legislation today that would restructure the tax code to reduce healthcare and retirement entitlement spending. The nation is ‘trying to meet the needs of a rapidly changing world with outdated programs that are growing themselves right into extinction,’ Ryan said at a press conference. Under Ryan’s plan, individuals who are not enrolled in Medicare or military health plans would receive a $2,500 tax credit — $5,000 for families — that can be used in any state to help purchase healthcare coverage. The proposal would initially preserve Medicare for those over 55. But for those under 55, the plan would provide a $9,500 payment that would be adjusted for inflation and based on income. He said the bill would strengthen Medicaid by reforming high-risk pools and giving states maximum flexibility to tailor Medicaid programs to the specific needs of their populations. For Social Security, the plan would keep the system as is for people over 55, but allow workers under 55 the option of investing over one-third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees.” [National Journal’s Congressdaily, 5/21/08]


Published: Oct 10, 2012

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