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.

One of the suggestions for saving Medicare is to raise the eligibility age to 67 or 68 – or higher. This reminded me of a blog post I wrote in April, 2010.

Originally posted on April 21, 2010:

I hit the trifecta this week by meeting three women who will turn 65 in July.  All three of them told me they had been without health insurance for many years. They are thrilled to be turning 65 -  so they can get on Medicare.

Linda told me that she and her husband have spent most of their retirement savings on her medical bills over the last ten years.  Karen said she has had pain in her left leg for quite a while, and she worries about what  a doctor might find when she gets her Medicare and goes for a physical exam. Gayle looks like she’s 55, not 65.  She has no health problems and takes no medications.

As an insurance broker, I have met too many women in their 50′s and 60′s who cannot get health insurance – and it’s just not right.

I have also met men who have continued to work well into their 70′s so they could keep their employer health insurance for their younger wife – who was uninsurable because of some health problem.

Earlier this year I met with a man who was 68 years old and finally leaving work and signing up for Medicare.  His wife was sitting at the kitchen table with us, and her arms were trembling. I couldn’t help but ask her what her medical problem was.  She told me she has Parkinsons… and she no longer had health insurance.  She is 62 years old.

About two years ago, I met a  woman who was 64 and had lost her group coverage because her artists’ co-op had disbanded.  She wanted to buy individual health insurance, but was refused because her cholesterol was too  high.  When I talked to her last fall, as she was approaching her 65th birthday, I said, “You’re gonna make it to 65 in one piece!  Now let’s get you signed up for your Medicare coverage!”  Turning 65 was a blessing for her.

Yesterday I met with Karen, the woman who has had pain in her leg for a while, but was waiting for her Medicare coverage to start before going to a doctor. After we discussed her Medicare coverage options,  she turned to her 40 year-old disabled daughter and shouted gleefully, “Mommy’s getting health insurance! Mommy’s getting health insurance!”

When politicians talk about raising the eligibility age for Medicare, I think of Karen and the relief – and joy – she felt about getting Medicare… and  it makes me want to cry.

Senator Lieberman, Paul Ryan, and all those politicians who have excellent health insurance, have no clue as to what millions of Americans are going through.

How can they talk about raising the Medicare eligibility age AND killing the Affordable Care Act?  Without the Affordable Care Act, people like those I have written about would continue to go without health insurance and medical care. Raising the Medicare age will keep them without health insurance even longer – and  they’ll just get sicker and sicker, and be more expensive when they finally get Medicare. What a brilliant idea!