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Report: Medicare Changes Would Slam
Seniors with Hefty Costs

June 28, 2011

Wisconsin Rep. Paul Ryan, the chairman of the House Budget Committee, is the architect of a proposal moving through Congress that would significantly alter Medicare for millions of retirees.

This month, he said that workers nearing retirement will not be affected, nor will current Medicare recipients. "We propose to not change the benefits for people above the age of 55," Ryan said. This echoed a promise from House Speaker John Boehner (R-Ohio) that “the retirees are going to be taken care of – no ifs, ands or buts about it.”

But a recent article in National Journal magazine paints a different picture. Ryan’s plan, writer Tim Fernholz points out, would be disastrous for seniors:

[Ryan’s] proposal would … repeal last year’s health care law, which means reopening a coverage gap in Medicare’s prescription-drug benefit that the statute closed. The gap, commonly called the “doughnut hole,” requires seniors to pay 100 percent of any prescription costs after the annual total reaches $2,840 and until it hits $4,550.

If Congress were to pass Ryan’s plan and repeal the law, as House Republicans want, the 3 million to 4 million seniors left in the doughnut hole each year would immediately face significant out-of-pocket costs.

The Alliance for Retired Americans has been active in exposing the flaws in the proposed budget plan. Research compiled by the ARA shows that the Ryan budget:

• Privatizes Medicare and turns care over to insurance companies. Currently, Medicare pays for all medically necessary health care without limits. Under the Ryan budget, current workers under 55 must choose a private insurance plan when they go on Medicare. Traditional Medicare will end.
• Drastically increases out-of-pocket payments. The Ryan budget would not be indexed for medical inflation. According to the Congressional Budget Office, by 2030 the Medicare vouchers would be about $9,750 a year while annual medical costs would be about $30,460, leaving seniors with an average $20,700 to pay out-of-pocket.
• Increases co-pays. The Ryan budget eliminates provisions that require no co-payments for preventive services and free annual visits.
• Promotes rationing by private insurance companies. With rising health care costs and limited funding, insurers will have every incentive and motive to deny care.

Read the entire National Journal article.

Click here for more information from the Alliance for Retired Americans.

Photo used under a Creative Commons license from Flickr user nwxiang.