How will Paul Ryan change Medicare?

How will Paul Ryan change Medicare?The selection of Wisconsin congressman Paul Ryan as the running mate for presumptive Republican Presidential nominee Mitt Romney could have serious consequences for the Medicare program.

Ryan, Budget Committee chair for the House of Representatives since Republicans gained control of the chamber 2 years ago, is best known for budget proposal, which includes a plan to overhaul Medicare and transform it into a “premium support” system.

Romney announced his choice of Ryan, 42, at a campaign stop in Norfolk, Va., on Saturday.

Under Ryan’s plan for Medicare, which he has proposed for each of the last 2 years, enrollees would be given a choice between traditional fee-for-service Medicare and several private insurance plans once they become eligible for coverage. All of the private plans would be required to cover “at least the actuarial equivalent of the benefit package provided by fee-for-service Medicare,” according to the proposal.

Once a beneficiary chooses a plan, the government would send that plan a “premium support” payment equal to either the cost of traditional Medicare or the second least-expensive private plan, whichever is less. The plan is not unlike the way Medicare Advantage works now. Ryan’s plan would affect those younger than 55, who would begin enrolling in Medicare in 10 years.

“We have to save Medicare to avoid disruptions in benefits for current seniors and to strengthen the program for future generations,” Ryan says on his website. He points to a Medicare trustees report predicting that if nothing is done, the program will go bankrupt by 2024.

Medicare’s growth should be determined by a competitive bidding process using choice and competition, forcing providers to reduce costs and improve quality, according to Ryan.

Critics have charged that Ryan’s plan will end up making seniors spend more money on Medicare than they do now. “Since the premium support voucher does not keep up with increasing health care costs, the Congressional Budget Office estimates that new beneficiaries could pay up to $1,200 more by 2030 and more than $5,900 more by 2050,” Think Progress, a liberal Washington policy group, said in a press release.

Ryan’s proposal for overhauling Medicaid involves the use of block grants. The federal government would cap the Medicaid spending in each state and let the states figure out funding rates themselves.

Also on his website, Ryan says constant forestalling of changes to Medicare’s Sustainable Growth Rate formula for physician reimbursement is unacceptable.

“Physicians should not have to wait on Congress to act every year in order to prevent pay cuts that are arbitrarily determined by an outdated formula,” he writes. “Fundamental reforms to Medicare and our broken health care system are urgently needed, and I will continue to push my colleagues to take on this challenge.”

He does not elaborate on his plans for reimbursement changes.

Ryan also hammers President Barack Obama’s Affordable Care Act, saying it does nothing to address costs and creates uncertainty in the health care system. However, he stops short of saying it needs to be repealed.

David Pittman is a Washington Correspondent at MedPage Today, where this article was originally published.

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  • NewMexicoRam

    About time.
    Even if America doesn’t choose Ryan’s way this election, the handwriting is on the wall and major changes will come sooner or later. The youger generation is already thinking they will get less than their parents and grandparents did (are), and they are correct. So the idea is to change things so that people have choices and incentives to use less.

  • Cedric Dark

    At least his selection offers a realistic choice of keeping Medicare as a defined benefit plan vs. moving to a defined contribution. This is a debate long overdue. Here’s our take on his plan:

  • Marie Devine

    A very big expense in Medicare, Medicaid, and Social
    Security are the cost of paperwork and employment that gets money collected and
    decided who gets what when. This can be
    done locally within families and communities.
    Costs of lengthy hospital stays or nursing homes can be greatly lessened
    by family members at home IF we choose God’s garden paradise lifestyle instead
    of glorified slavery for a lifetime. All
    we need is people at home to oversee our elderly or afflicted etc. They are still productive and helpful saving
    parents time and adding supervision even as they recover with fresh foods,
    sunshine and light exercise.

    The bottomless pit we call employment and security is
    glorified slavery that keeps wanting more from us, often to correct a previous
    decision. We can only have a garden
    paradise lifestyle and God’s wisdom ruling our nation as written in the Bible
    IF we speak up proudly to our president and leaders and refuse to use the world
    system; we can save a lot of our money.
    Time is short. We cannot
    delay. God can give us His new candidate
    once we make the decision. He gives us
    free choice. We could still vote to continue our glorified slavery lifestyle and pay to a local government; it would be less expensive but not as effective as turning back to God’s plan.

  • Rules4FreeRadicals

    Paul Ryan has done absolutely nothing to Medicare. He (along with every other Republican) voted against the $700+ billion in cuts to Medicare in ObamaCare put into law by the democrat party.

    • Molly_Rn

      The name of the party is Democtratic. Democrat is a slur. You guys complain when President Obama’s campaign goes after the BS in Romney’s campaign and call it negative, but you are in negative mode constantly.

    • Valarie Murphy

      The only candidate in this election who ever cut Medicare is Barack Obama. He trimmed over $700 billion off.

  • Molly_Rn

    Paul Ryan’s math stinks as does his kill Medicare plan. Read Paul Krugman’s critique of Paul Ryan’s plan for some reality. Mr. Krugman is a Nobel prize winning economist. Mr Ryan is the teaparty’s wet dream. He is rich and doesn’t have to worry about his health care.

  • Valarie Murphy

    A 64-year-old woman can get a $10,000 deductible policy for less than $250/month (my zip code). Medicare costs $12,000 a year per person. Why not let people buy their own insurance and then deposit into an HSA? Eventually, Medicare could be phased out as HSA savings grew.

    BTW, a 65-year-old woman can’t get anything except government medicine.

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