Health care expenditures would double for the elderly in every state by 2022 if the Republican plan for Medicare is implemented. This is the finding of a detailed analysis of the Ryan plan for turning Medicare into a voucher program where the government’s cost would be fixed, leaving seniors to cover more of their health care costs.

According to the report by the US Congress Joint Economic Committee, if Medicare remains as is, Seniors in Arizona can expect to pay, on average, $5,364 out-of-pocket for their health care costs in 2022. Under the Ryan voucher version of Medicare, seniors in Arizona can expect to pay out $10,906 in 2022.

Analysis of the Ryan plan compared to traditional Medicare was carried out by the US Congress Joint Economic Committee. The report provides a state-by-state analysis of the Republican proposal’s impact on the health care costs of the typical 65-year-old in 2022. The report finds that the Republican plan for Medicare will double the out-of-pocket health care expenses of the elderly in every state, with some paying over $7,000 more than what they would have paid under traditional Medicare.

Excerpts from the committee report:

Under the Republican plan, Medicare will no longer function as a health insurance provider. Instead, Medicare beneficiaries will only receive a payment that they could use to purchase private health insurance. Medicare beneficiaries will bear the full brunt of all remaining health care expenses not covered by their insurance provider. Moreover, the Republican plan reopens the “donut hole,” which is the gap in Medicare Part D that had forced beneficiaries to pay 100 percent of their drug costs after they exceeded an initial coverage limit and until they qualified for catastrophic coverage. As a consequence, millions of older Americans will pay higher prescription drug costs.

Medicare is a lifeline for older Americans. The Republican Medicare plan will force millions of elderly Americans to pay more for medical care and could accelerate the rise in health care costs. More ominously, the Republican plan steers Medicare away from the goal the program has aspired to achieve for nearly five decades, which is to provide older Americans with universal access to high‐quality, affordable health insurance in their retirement years.

Medicare is in trouble, and the only way to save it is to reform the program and cut costs. But how to do this? It turns out the Affordable Care Act (aka “Obamacare”) provides some answers to this vexing question. The Affordable Care Act will cut or save billions of dollars for Medicare through new tools and resources to help crack down on fraud, waste, and abuse in the Medicare system, as well as reforming payment systems to reward high quality care.  These efforts are aimed at creating better health, better care, and lower costs for patients, providers, and taxpayers, according to the Centers for Medicare and Medicaid (CMS).

Here is how Medicare will save $120 billion over the next four years:

This last area of savings ($50 billion) is the amount of money Medicare expects to cut from Medicare Advantage plans.  I wonder if this number has been adjusted for recent changes that have been made to lessen the impact of payment cuts on the 11 million people enrolled in these private Medicare plans?  In Arizona over 45% of seniors in Maricopa, Pima, and Pinal counties are enrolled in Medicare Advantage plans.

Originally, Medicare was only going to reward top performing Advantage plans that earned 4 and 5 stars in the Medicare rating system. The reward is more money. Earlier this year, Medicare said it would also reward 3 star-rated Advantage plans. This is good news for Arizona as most of our Advantage plans get just 3 stars, meaning they are good but not excellent. I wrote about the Medicare Advantage star rating system late last year.

So, while Medicare will be taking away money from Medicare Advantage plans with one  hand, with the other hand Medicare will  give money to plans for providing high quality service to their members. The end result could be lower savings for Medicare, but happier seniors, who will not experience drastic changes in their Medicare coverage.

The full report on Medicare savings can be found at: http://www.cms.gov/apps/files/medicare-savings-report.pdf