(/sites/default/files/uploads/2012/10/Paul_Ryan6295.gif)Democratic National Committee Chairwoman Debbie Wasserman Schultz described the Medicare reforms proposed by House Budget Committee Chairman Paul Ryan (R-WI) as “literally a death trap for seniors.” White House spokesman Jay Carney told reporters that Ryan’s reforms would “change Medicare as we know it.”
But it was Obamacare that already changed Medicare as we know it, transforming it literally into a death trap for seniors. Obamacare cuts Medicare by $716 billion over the next 10 years alone, mostly by slashing Medicare payments to doctors and hospitals. And that is just a downpayment on what is to come.
Medicare’s Chief Actuary Rick Foster reports that by the end of this decade, Medicare will be paying less to doctors and hospitals for health care for seniors than Medicaid pays for health care for the poor. And Medicare will be falling farther and farther behind Medicaid each year.
Already, Medicaid does not pay enough for the poor on the program to get timely, essential health care, particularly the sickest and those most in need of the best health care. Academic studies show that the poor suffer worse health outcomes as a result, including premature death.
But under Obamacare, soon enough, seniors will be lined up behind welfare mothers in trying to find doctors who will see them, and hospitals that will admit them. These cuts affect seniors already retired today, not just those years into the future.
Foster reports that, even before these cuts, two-thirds of hospitals were already losing money on Medicare patients. In a few short years, hospitals serving seniors in particular will begin closing, and retirees will have increasing difficulty obtaining access to care. As Harvard University health economist Joe Newhouse explains, seniors will likely have to seek care at community health centers and safety net hospitals.
And this does not even count any further cuts that may be adopted by Obamacare’s Medicare “death panel,” the Independent Payment Advisory Board (IPAB). That Board will be composed of unelected, appointed, Washington bureaucrats with the power to adopt still more Medicare cuts that would become effective even without the approval of Congress.
Contrary to the childish silliness of Wasserman Schulz and Carney, Ryan’s Medicare reforms, in sharp contrast, would simply extend the more modern, popular, and successful policies of Medicare Parts C and D to the old fashioned Medicare Parts A and B.
Medicare Part D is the prescription drug program. Just like Ryan’s proposed Medicare reforms, Part D provides premium support payments to seniors, which they use to purchase the private prescription drug coverage of their choice. Because of private market competition, and incentives for seniors to choose lower cost plans, Part D costs have run 40% below projections. Compare that to Parts A and B, which, by 1990, cost 10 times the original projections for that year when the program was adopted.
Medicare Part C is Medicare Advantage, under which nearly 25% of seniors have already chosen private insurance to provide all of their Medicare coverage. Seniors believe they get a better deal through this highly popular program due to choice and competition.
Ryan would empower workers under age 55 today, when they retire in the future, with the choice of a private plan competing alongside traditional Medicare. Medicare would provide these seniors with a premium support payment they could use to pay for, or offset, the premium of the private health insurance they chose, providing at least the exact same benefits as Medicare. That premium support payment is set by competitive bidding under rules ensuring it will be enough to pay for at least two of the competing plans providing at least the same benefits as Medicare. Or seniors, even in the future, could just stay in Medicare just like it is today.
Unlike under Obamacare, these reforms would involve no change for anyone retired today. This plan was actually developed by a bi-partisan commission under President Clinton and chaired by Democrat Sen. John Breaux of Louisiana.
Ryan’s reforms are better for seniors than Obamacare’s Medicare, most of all because they free seniors from the cuts and government health care rationing involved in Obamacare’s mangling of Medicare, by allowing them to choose private insurance, paying market rates instead. Only through such private insurance will seniors be able to continue to enjoy the high-quality, most advanced care they have come to expect from Medicare.
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