What is the Paul Ryan plan for Medicare? 1) Limit government responsibility for the cost of Medicare; 2) Make people covered by Medicare pay more of their health care costs; 3) Hand Medicare over to insurance companies.
1) The Ryan plan would give vouchers, worth around $8,000 per year, to Medicare beneficiaries. Medicare beneficiaries would then buy their own health insurance. The Medicare budget would be fixed and capped, and voucher payouts would be raised a little bit each year.
2) Democrats say Ryan’s proposals for raising the voucher amounts each year would be less than cost increases in health insurance premiums. This would leave seniors with less coverage and more out-of-pocket expenses for their medical care.
3) The Ryan plan would turn Medicare into a for-profit business for insurance companies.
I don’t know how points 1 and 2 might work out as I am not a policy wonk. I do have an opinion on point 3.
I don’t see how the Ryan plan is fiscally conservative. Medicare’s administrative costs are around 3 – 4% of the Medicare budget. Insurance company admin costs are about 15%. How can anyone think it will save taxpayer money to turn Medicare into a much less efficient business model?
We already have privatized Medicare in the form of Medicare Advantage plans which are run by insurance companies and paid for by Medicare. But those plans are not paid a capped amount because insurance companies don’t want to take on the risk of losing money. Instead, Advantage plans get paid more money if their members are sicker and more costly. This is called “risk adjustment”.
Advantage plans get to make a profit from doing business with Medicare. Profit margins might be just 4 or 5%, which doesn’t sound like much. But when the annual revenue for one Medicare Advantage plan company is in the billions of dollars (taxpayer money), 5% turns out to be….. a lot of money that is taken out of the Medicare system. How is that fiscally conservative? Isn’t that a misuse of taxpayer money?
As an insurance broker, I should be excited about the prospect of all those seniors needing a private Medicare plan. What an incredible business opportunity!! So many dazed and confused seniors! So many choices! So many new clients each year as plan premiums get too high and seniors need to make a change!
Isn’t there something wrong with this picture? Why would we want to make Medicare more confusing? Oh, I forgot…. free market competition will make everything better…. and less expensive…. and everyone will have more freedom.
Why not fix Medicare instead of throwing it out completely? The Ryan plan doesn’t even address rising costs for medical care. Why have Republicans consistently pushed for privatizing Medicare?
And one more thing:
The Ryan plan calls for the Medicare age to be raised to 67…..while at the same time calling for the repeal of Obamacare. I have met many, many people who were thrilled to be turning 65 so they could finally get health insurance again – or get decent coverage with Medicare. I just can’t imagine pushing the goal line that much further away for people, many of whom have lost their jobs and their health insurance.