Ryan's Medicare Voucher Plan Could Mean Higher Costs for Seniors

TUESDAY, Oct. 16, 2012 — As the presidential election fast approaches, health care reform remains a central issue for many voters. When Americans tune into the second presidential debate tonight, Governor Mitt Romney will probably defend his running mate Congressman Paul Ryan's controversial campaign proposal to transform Medicare nationally with a voucher system.

But a new study from the Henry J. Kaiser Family Foundation says the plan will have devastating effects, forcing seniors to shoulder more of their premium costs for traditional Medicare or lower-cost private plans. Furthermore, the cost for Medicare insurance is likely to vary by state.

Under the Ryan voucher proposal, which would not be fully implemented until 2023, seniors over 65 who enroll in more expensive plans will be forced to cover the difference between the value of the voucher and the actual cost. Current Medicare beneficiaries would be grandfathered in under their current plans.

"If you reform these programs for my generation — people 54 and below — you can guarantee they don't change for people in near retirement, which is precisely what Mitt Romney and I are proposing," said Ryan in last week's vice presidential debate.

Kaiser generated the report with 2010 national Medicare data. They estimate that 59 percent of seniors would end up paying higher premiums in order to obtain a plan that's comparable to what's currently offered.

Additionally, 6 out of 10 beneficiaries would be forced to pay higher premiums. Even if Medicare recipients opt for less costly plans, more than a third would pay more for them. In regions where Medicare spending is low, a private plan would become more costly, which translates to a smaller network of physicians and more out-of-pocket expenses.

Beneficiaries in California, Florida, Michigan, New Jersey, Nevada, and New York would pay approximately $100 more per month for Medicare — and rates may vary within each state. Under the current Medicare system, all seniors pay the same percentage of their premium, regardless of where they live.

"Medicare and social security are going bankrupt," Ryan argued at his debate with Vice President Joe Biden. "We would rather have 50 million future seniors determine how their Medicare is delivered to them instead of 15 bureaucrats deciding what, if, where, when they get it."

Kaiser does recognize the limits of their study, which they claim is not necessarily a pointed analysis of the Romney-Ryan proposal, but rather an assessment of how a major overhaul to Medicare could make access to insurance significantly less affordable.

"Such an analysis would require additional, more detailed policy specifications than are currently available, and would also require assumptions about future shifts in demographics, spending, and enrollment, nationally and by local markets, which would occur regardless of policy changes," the authors note in the introduction.