On Tuesday, House Budget Committee Chairman Rep. Paul Ryan (R-WI) released his new budget blueprint for fiscal year 2015. It contains many of the same cuts to social safety net and low-income assistance programs as his previous proposals — including sweeping changes to Medicare that would turn the health care program for the elderly into a “premium support” plan that forces American seniors to pay more for their coverage.
Ryan’s new Medicare proposal hews to the same basic structure as his previous premium support plans — in essence, a system of insurance vouchers. Under the plan, future Medicare beneficiaries would have the option of choosing between traditional fee-for-service Medicare or a list of private health plans and receive a subsidy to help pay the chosen policy’s premium. Unlike previous Ryan budgets, however, seniors who are currently 55 or younger would be forced into this alternative system, likely breaking a pledge House Republicans made last year promising that current 55-year-olds would be able to stay on traditional Medicare.
Ryan emphasizes that his proposal still gives seniors the choice of remaining in regular Medicare. But what he doesn’t mention is that his plan makes Medicare so expensive that millions of seniors will likely be forced to switch into the private plans. While Ryan employs a different type of bidding system for private health plans under his 2015 blueprint that softens his plan’s topline effect on beneficiaries’ costs, an earlier Congressional Budget Office (CBO) analysis of Medicare premium support systems found that plans such as Ryan’s would increase traditional Medicare premiums by a staggering 50 percent.
The millions of seniors who are forced over to private plans would also find themselves with different doctors and narrower coverage networks under Ryancare — ironic considering Republicans’ unabashed outrage over news that the Affordable Care Act had canceled about three or four million skimpy insurance policies. But unlike Obamacare, Ryan doesn’t require his replacement private plans to have a more robust base level of consumer protections and benefits than beneficiaries’ previous coverage.
Low-income seniors would be particularly hurt by the Ryan approach to Medicare since it would also raise the Medicare eligibility threshold. Since Ryan’s plan also dismantles Obamacare, including the health law’s Medicaid expansion, this would be a major blow to the poor and elderly who are just on the cusp of Medicaid eligibility. These people would be unlikely to qualify for Medicaid absent the ACA’s expansion and many of them would be forced to continue working simply for the sake of retaining their employer-sponsored coverage, a phenomenon known as “job lock.” Seniors who aren’t lucky enough to receive employer coverage would have to try their luck in an individual market absent Obamacare’s consumer protections and industry reforms, meaning they may be charged exorbitant rates for having poor health or denied health insurance altogether.
A full CBO analysis of Ryan’s new budget plan is necessary in order to evaluate its overall effect on seniors. But the blueprint Ryan released today suggests that it boils down to seniors paying a bigger chunk of money for their care or having fewer coverage options.