Study: Seniors Would Pay More For Medicare Under Republican-Backed Plan

Lawmakers like Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-WY) support radically restructuring the current the Medicare system into a voucher program that provides seniors with “premium support” credits to purchase coverage from an exchange of private health insurers or remain in traditional fee-for-service Medicare.

Mitt Romney, the GOP presidential candidate, has embraced the idea, which critics have long suspected would increase costs for seniors.

Under the proposal, insurance plans would submit bids for how much they would charge to provide coverage and the voucher “would be tied to the premium of the private plan with the second-lowest cost, or the premium for traditional Medicare—whichever is lower.” Critics charged that in areas where private plans make bids that are lower than the cost of traditional Medicare, seniors would see increase costs and now, a new study finds that had the plan been implemented in 2009, 24 million beneficiares enrolled in the program would have paid higher premiums to maintain their choice of plan and doctors:

Nationally, in 2009, the benchmark plan under the Ryan-Wyden framework (ie, the second-lowest plan) bid an average of 9% below traditional Medicare costs (traditional Medicare was equivalent to approximately the tenth-lowest bid). Since traditional Medicare is simply another plan option under the Ryan-Wyden plan, a beneficiary in 2009 would have paid an average of $64 per month (9% of $717) in additional premiums to stay in traditional Medicare. Across the United States, 68% of traditional Medicare beneficiaries in 2009 (approximately 24 million beneficiaries) lived in counties in which traditional Medicare spending was greater than the second–least expensive plan and would have paid more to keep their choice of coverage (a share that would have been 81% in 2008, 75% in 2007, and 67% in 2006). Furthermore, more than 90% of MA beneficiaries (approximately 6.6 million seniors, excluding those dually eligible or in employer plans) would have also paid more for the plan they chose.

On average, the GOP-backed idea would have resulted in a premium increase of $768 million each year for those 24 million seniors, accounting for 68 percent of beneficiaries.