Big health cost shift to elderly in GOP plan

The CBO has come out with criticism over the Republican the new budget proposal. Under the plan, the CBO says that most future retirees would pay considerably more for health care. The fiscal blueprint calls for people now 54 and younger in a different kind of health care program when they retire, unlike the Medicare that their parents and grandparents have known. What they would get is a federal payment to buy private insurance from a choice of government-regulated plans.

“A typical beneficiary would spend more for health care under the proposal,” the nonpartisan Congressional Budget Office estimated in an analysis released late Tuesday.

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Over time, future retirees would pay much more, partly because the Medicare benefits package would be more expensive to deliver through private insurers. By 2030, the government payment would cover only about one-third of the typical retiree’s total health care costs.

This plan introduced by House Budget Chairman Paul Ryan, R-Wis., would reduce total federal spending, deficits and debt, saving money for federal taxpayers. But it would be tempered by a cost shift to future retirees. Has anyone had time to study the plan, before commenting, as it has just been released?

Many say this could become a huge problem, politically, for Republicans. According to the budget office, the new GOP plan would leave most of those cuts in place. Although the Republicans want to push it quickly through the House, it will probably fail in the Senate. Ryan calls his Medicare idea Premium Support.

“The ball game in a premium support or voucher program is the level of support and how it is increased in the future, over time,” said Drew Altman, president of the nonpartisan Kaiser Family Foundation, an information clearinghouse on the health care system. “If it is not increased adequately, then seniors will pay more or get fewer benefits.”

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And other changes in Ryan’s plan include:

Putting 30 million more on Obamacare would be repealed.

Medicaid, the federal-state program that covers low-income and severely disabled people, would be converted into a block grant program that gives each state a lump sum to design its own insurance plans. This would leave out many poor.

The coverage gap in the Medicare prescription drug benefit would be brought back.

Future retirees would see an increase in the eligibility age for Medicare, currently set at 65. Starting in 2022, the eligibility age would rise by two months each year until it reaches 67 in 2033.

In malpractice cases, the jury rewards would be limited. Now although Ryan’s plan saves $5 trillion over 10 years, critics say it won’t put much of dent in the deficit.

“What this plan tees up is a question about the role of government in our lives and in our health care system,” said Mike Leavitt, former Health and Human Services secretary under President George W. Bush. “It boils down to two questions: How much can we afford and what role government should play. The U.S. is really alone in the world when we say we can afford an unlimited amount for all individuals.”

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At the basic level, Ryan’s plan would shift more of the risk from rising health care costs from federal taxpayers to individual beneficiaries, medical service providers and states, giving them all a powerful incentive to avoid waste and aim for quality and efficiency. Now both sides agree, this could keep costs down.

For seniors already in the program and people within 10 years of retirement, Medicare would remain in place largely as it is now. But by 2022, new beneficiaries no longer would have access the traditional program. Instead, they would get a fixed amount from the government to purchase private insurance.

The voucher would be adjusted so that if a person’s health takes a turn for the worse, the federal payment would increase. Wealthier beneficiaries would get a lower subsidy, but lower-income seniors would get extra help with their out-of-pocket costs.

As for Medicaid, this would would mean that poor people no longer would have a right under federal law to get health care through Medicaid. Instead, Washington would send each state a lump sum to spend on medical care, nursing homes and other health services.

Advocates are worried that states will not be able to offer vulnerable low-income people reliable protection. Medicaid payments to providers are already at rock bottom levels. States pressed for money in a future economic downturn might reduce payments to doctors and hospitals even more, and they might even freeze enrollment.

That would send more people to the emergency room looking for charity care. We already have this, and to explain, this means booting off illegals who get healthcare free. That’s the main contension, why so many are against this plan.