Republicans have introduced their “Pathway to Prosperity”, a plan for slashing the federal budget by four trillions dollars over the next ten years. The Republican plan will end Medicare as we know it and create a new program in which seniors and disabled Americans will buy private insurance with vouchers from the government.

People who turn 55 this year, and everyone already over 55, will be able to participate in the current Medicare program.  Younger Americans will participate in the Republican version of Medicare.

But there is one little detail those youngsters need to be aware of…..   Republicans plan to raise the eligibility age for Medicare to 67. So if you are 50 now and were thinking you’d retire with Medicare health insurance at 65…..think again.  The Republican plan adds two months each year to the Medicare eligibility age until 2033, when it reaches 67.

Something else for youngsters to consider….The Republican “Pathway to Prosperity” also calls for repeal of the Affordable Care Act which makes health insurance available to everyone starting in 2014.  Without the Affordable Care Act…  if you are too fat, too skinny, a cancer survivor, a diabetic.. .or if you have one of 40 to 50 pre-existing conditions….  you are uninsurable.  That means, no matter how much money you are willing or able to pay for health insurance….  you will be denied.

I have met far too many people who were elated to turn 65 so they could finally get health insurance…  or get rid of the expensive, high-deductible plan they had been paying $800 per month for….   and finally get decent health insurance with Medicare.  Getting Medicare will be further down the Republican “Pathway to Prosperity”.

The Republican plan will put an end to Medicare, which has administrative costs of 3 to 6%.  Republicans will turn over the health and welfare of seniors and disabled people to insurance companies, which have overhead costs of around 20% – including profit margins. The Republican plan does nothing to address the rising cost of health care.

The only good thing I see about “The Pathway to Prosperity” is that Republicans are being very honest about their plans for Medicare.  This issue will be at the heart of the 2012 elections, and voters  will have to decide if they want their old age benefits in the hands of Republicans and insurance companies or the government.  It should be an interesting election season in 2012.

A common theme among the many proposals to reduce Medicare spending is that seniors and the disabled must pay a larger portion of the cost of their health care.

The theory is that when people have to pay more for medical services, they will be less likely to overuse health care.  This is called “consumer-driven” health care, where the individual decides to take a pass on physical therapy or knee replacement surgery because they have some co-pay which they deem to be too much.  Of course, the question can be asked if seniors will avoid going to the doctor, or getting treatment they really need because of higher co-pays and deductibles.

Kaiser Health News covered some of the proposals for passing on costs to Medicare beneficiaries:

CHANGING MEDICARE’S DEDUCTIBLE AND MEDIGAP COVERAGE: Medicare charges beneficiaries separate deductibles for their hospital care (Part A) and for outpatient and physician services (Part B). This year, in Part A, beneficiaries pay $1,132 for each hospital stay, and enrollees also pay daily co-payments for extended hospital and skilled nursing care. For Medicare Part B, the annual deductible this year is $162. Nearly one in five beneficiaries in Medicare’s fee-for-service program have supplemental insurance known as Medigap coverage to help with those costs.

Some proposals, including one advanced by the president’s deficit panel chaired by former GOP Sen. Alan Simpson and former Clinton chief of staff Erskine Bowles, have suggested combining the Part A and B deductibles into one $550 yearly deductible. That could reduce beneficiaries’ costs for hospital care but be more expensive for seniors who mostly use Part B. In addition, some proposals suggest a 10 to 20 percent co-payment for all services until beneficiaries reach a catastrophic limit. Others argue for making that $550 deductible ineligible for Medigap coverage so that beneficiaries are responsible for covering the cost of those initial services.

How Much Would It Save? Instituting the change in deductibles, co-pays and Medigap rules would save about $93 billion over the next decade, CBO estimates.

The Gain: Medicare would save money, but not just because beneficiaries were putting up more of their own. If Medigap plans were less generous, analysts believe beneficiaries would be more careful about spending and that could help lower Medicare costs.

The Pain: Once again, this proposal would shift costs to individuals.

The full article in Kaiser Health News can be found here.