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There’s one truly critical difference between me and my State Senate opponent Bob Huff when it comes to Medicare as envisioned by Paul Ryan: I was born in 1960 and he was born in 1953.
That may not seem like a huge difference — but if Mitt Romney is elected and the Ryan Plan is enacted, it could literally be the difference between life and death.
The key date to know is January 1, 1958. If you were born on or after that date, under the Ryan Plan you would no longer be eligible for Medicare as we understand it. Oh, they may CALL it Medicare, but that means nothing: they could call it a Jacuzzi, but that wouldn’t make it hot and bubbly.
On January 1, 2023 and thereafter, Bob Huff would still get the advantages of a governmental system that negotiates with willing doctors and hospitals to get lower “fee for service” prices for seniors, which will take care of most of his medical problems.
On or shortly after my 65th birthday following that day, I will get a coupon for something like $6000-8000 and instructions to go buy myself a health insurance policy (if I can.) That’s what “privatizing Medicare” means.
Medicare has its problems — none greater than the huge budget-busting giveaway to the pharmaceutical companies represented by Medicare Part D – for which Paul Ryan voted, by the way. Those problems have better solutions than this one, but this story is less about policy than fairness.
Medicare privatization means that a lot of people my age are going to die earlier, for lack of medical care that people of Bob Huff’s age would continue to receive, than we would under current law.
People of around Bob Huff’s age will suffer as well, but for more convoluted reasons.
First, the people who continue to receive government Medicare will become an ever-more dwindling proportion of the population. Once people my age — and 42-year-old Paul Ryan’s age — have a sizable enough majority, we will inevitably snatch the benefits away from them too — “cashing them out” for a defined amount per year. If I’m still around, I expect that I’ll vote “no” on such a change — and I expect that I’ll be outvoted.
As soon as private insurers start offering coverage to future retirees in 2023, they’ll do exactly what private plans are already doing in the Medicare Advantage program: cherry pick the healthiest applicants and leave sicker, more expensive beneficiaries in traditional Medicare. Mechanisms that prevent companies from skimming from the top — what wonks call “risk adjustment” — are imperfect, and so it’s likely that traditional Medicare would have to raise premiums to make up the difference.
This is where things can spiral out of control. Higher premiums encourage healthier beneficiaries who are still in traditional Medicare to opt into the private coverage, increasing costs even higher. As the Center on Budget and Policy Priorities’ (CBPP) Paul Van de Water observes, “over time, traditional Medicare would become less financially viable and could unravel — not because it was less efficient than the private plans, but because it was competing on an unlevel playing field in which private plans captured the healthier beneficiaries and incurred lower costs as a result.”
There’s more there; go check it out. By the way: Paul Ryan’s 2011 plan for “Medicare reform” was even worse. Here’s Think Progress on that two-stage plan:
Stage One, Vouchers: Ten years after the Ryan Plan takes effect, it eliminates traditional Medicare entirely and replaces it with a voucher system that seniors can use to by a private health plan. Although this proposal does produce small savings for government when it takes effect, it does so by massively increasing the out-of-pocket costs to American seniors. According to the Congressional Budget Office, total health expenditures for a typical 65-year-old “would be almost 40 percent higher with private coverage under the [Ryan] plan than they would be with a continuation of traditional Medicare” in the first year that the Ryan Plan is in effect.
[Editor's note: The figures from the Congressional Budget Office study are that, under present law, in 2022 a Medicare recipient would receive $8,600 worth of government aid and would pay $6,150 out of pocket. Under Ryan's 2011 plan, that would change to $8000 in government aid and $12,500 out of pocket.]
Stage Two, Phase Out: After eliminating traditional Medicare, the Ryan Plan then begins to gradually phase out the Medicare program. Because Ryan vouchers do not grow in value each year at a rate that keeps up with the rising cost of health care, they effectively lose value every single year. According to the CBO, “[b]y 2080, Medicare would be cut 76 percent below its projected size under current policies.” In other words, a child born in 2015 would receive less than one-quarter of the Medicare resources that today’s seniors enjoy when that child became eligible for Medicare. And that child’s Ryan vouchers would continue to lose value during each year of their retirement.
It’s worth noting that, by 2012, the original Ryan Medicare Plan proved so politically unpopularthat even Paul Ryan recognized he could no longer publicly support it. Ryan’s 2012 backed away significantly from his original goal of phasing out Medicare. Nevertheless, the original Ryan Plan remains the purest reflection of Ryan’s vision for the country, before that vision collided headlong into electoral defeat.
The immediate impact of Paul Ryan’s original vision is a massive, 40 percent spike in new retirees’ health expenditures, followed by gradually increasing costs for the rest of those retirees’ lives. And because the Ryan vouchers never stop losing value, they will eventually become practically worthless, providing no meaningful assistance whatsoever to seniors struggling to pay their medical bills.
(My emphasis there at the end.) So the real difference between the average, non-wealthy person of my age and the same sort of person of Bob Huff’s age is this: As a I’ll head into January 2023 already knowing that I’ve been abused and abandoned by the government when it comes to medical care. For people of Huff’s age, although not Huff himself, it will be more of a surprise.
I condemn Paul Ryan’s Medicare plans and will be voting for Obama-Biden over the Romney-Ryan ticket. If Bob Huff has a comment, I’ll print it. (I’ll also try to even this out by printing something else of his today.)