Ending Medicare as we know it, again


By Al Norman

A report by the health care advocacy group Families USA says if the House Republican budget proposal unveiled by Congressman Paul Ryan, R-Wis., in late March were to become law, it would undermine the health care for millions of seniors and the disabled, and cost Medicare beneficiaries in Massachusetts $38.8 million annually in lost prescription drug benefits.

Families USA warns: “(The Ryan plan) ends the Medicare program as we know it and replaces it with an inadequate voucher program. And it will also increase the number of uninsured Americans by eliminating Medicare coverage for 65- and 66-year-olds while simultaneously eliminating other sources of coverage by repealing the Affordable Care Act.”

The proposal calls for $205 billion in cuts over the next 10 years. The most significant potential harm to current beneficiaries comes from repealing the Affordable Care Act, which would expose millions of current Medicare beneficiaries to higher prescription drug costs and expenses for preventive care.

Under the Affordable Care Act, the coverage gap in the Part D prescription drug program, often referred to as the “donut hole,” is gradually closing. In 2011, nearly 3.8 million seniors and people with disabilities who had substantial prescription drug costs received a 50 percent discount on name-brand drugs while in the donut hole. In Massachusetts, 65,500 seniors received financial benefits in the Medicare drug coverage gap. Re-opening the donut hole is projected to raise each beneficiary’s drug costs by up to $6,000 per year by 2020.

The Republican proposal itself transforms Medicare into a voucher program. Under the proposal, called “premium support,” starting in 2023, seniors and people with disabilities enrolling in Medicare would be allotted a set amount of money to purchase insurance, using their vouchers to pay for premiums for either private health insurance plans or traditional Medicare. The growth of these vouchers is capped and would likely not keep up with health care costs, leaving beneficiaries to make up the difference. The value of the voucher would decline each year relative to the value of current Medicare coverage. According to the Congressional Budget Office, by 2030, the voucher would be worth only 77 percent of current Medicare coverage, and the value would decline to 58 percent by 2050. Beneficiaries who wanted high-quality insurance would have to pay additional premiums out of their own pockets.

Even though the traditional Medicare program would still exist, under the Republican voucher plan, it would become weaker and more expensive over time. Older and sicker beneficiaries would be more likely to remain with traditional Medicare because of its nearly unlimited choice of health care providers and good coverage for complex conditions. Premiums in traditional Medicare will rise to cover the costs of caring for these older and sicker beneficiaries. As premiums rise and more people leave the program, it will be less able to negotiate lower prices on services, which will result in higher health care costs.

The Republican’s solution is to cut Medicare and push health care costs onto seniors and people with disabilities. This is not a solution; it is just a cost shift. Medicare faces rising costs because health care costs are rising overall, both for private insurers and for public programs like Medicare. Medicare is, by design, serving an increasing number of seniors as baby boomers get older and join the program.

The Ryan Medicare plan would fundamentally violate the promise that Medicare has made to current and future generations of seniors that they will have access to comprehensive care at a time in their lives when they are most vulnerable.

Cut this article and send it to your member of Congress, urging him or her to oppose the Ryan Budget because it’s bad for your health, and the health of all Americans.. Al Norman is the executive director of Mass Home Care. He can be reached at 978-502-3794 or at: info@masshomcare.org.