Natalie Brisighella

1. Current System

2. Proposed Plan Details

3. Negative Consequences of Plan

4. Additional Arguments

5. Refutation of Proponents’ Arguments

6. Questions

roadmap

Medicaid: 50 million low income and severely disabled beneficiaries.

Medicare: 47 million retirees and disabled beneficiaries.

Current system

Eligibility age for Medicare would gradually increase beginning in 2022 from 65-67 ending in 2033

Implements a “premium support payment” plan

Sets up a “block grant” system to shift Medicaid funding to the states

Changes regulations of private insurance plans

Repeals several key provisions of the Affordable Care Act

Details of the Ryan Plan

New enrollees after 2022 will receive “premium support payments” to purchase private insurance

Premium support payments go directly from the government to the private insurance companies

Average 65 year old would receive an $8,000 voucher

Premium payments increase every year to accommodate decreasing health, increasing age, and increasing inflation

Premium support Payments

Payments vary depending upon health status, age of beneficiary

and income:

Wealthiest 2% receives 30% of the payment

6% receives 50% of the payment

Remaining 92% receive the “full premium”

This tiered system results in higher premiums for the top two brackets.

Premium support Payments

Beginning in 2013 the federal share of Medicaid payments get turned into “block grants” which are given to the

states

Block grants are lump sums of money given to the states to run their Medicaid programs

Block grants will increase annually with population growth and inflation until they’re ultimately decreased in

2022 to exclude projected spending for acute care services for elderly Medicare beneficiaries

Block Grants for Medicaid

Harms of the Ryan PlanIncreased Costs to Seniors

The total cost of providing health care benefits (premium and

other costs) to a typical 65-year old in a private plan would be about $20,500 in 2022.

The government would contribute $8,000 or 39 percent toward the total cost, and the remaining $12,500 would be

paid by the beneficiary.

The CBO projects that out-of-pocket costs for the typical 65-year old would be more than twice as large under the

proposal than under traditional Medicare ($5,630) in 2022.

Increased Costs

The Ryan plan forces future beneficiaries out of the traditional Medicare plan into a more expensive private plan.

In 2022 65-year-olds would be forced to pay twice as much for care than they would under Medicare: $12,500 compared to $6,150. The same holds true for 65-year-olds in 2030. They

would be forced to pay $20,713 compared to $9,138 under Medicare.

Increased Costs:Expensive Private Plans

Increased Costs:Expensive Private Plans

Anyone who wanted to buy coverage that costs more than the credit would have to pay the difference themselves. The

expectation is that people would buy less expensive coverage and more often pay for routine expenses out-of-pocket.

Increased Costs:Larger out-of-pocket costs

The House Republican plan forces seniors to pay a larger share of their health costs over time since the value of the

voucher increases at a slower rate than medical costs.

The Ryan proposal calls for 65-year-olds to contribute $12,513 of the estimated $20,513 total cost of their health

care in 2022, including premiums and out-of-pocket expenses, or 61 percent.

They are expected to pay $20,713 of the $30,460 in total costs in 2030, or 68 percent .

Increased Costs:Larger out-of-pocket costs

The proposal claims that current Medicare beneficiaries with low incomes will be guaranteed access to traditional

Medicare with no additional premiums.

That's fine as far as it goes, but it doesn't apply to new beneficiaries. And it doesn't apply to anyone whose income is

greater than 135 percent of the federal poverty threshold.

Thus, elderly or disabled individuals with incomes as low as $15,000 or couples with incomes as low as $20,000 could

face increased premiums.

Increased Costs:Larger Premiums for Elderly and

Impoverished

By 2030, the government would spend $7,200 on a 65-year-old in traditional Medicare. Since the cost of Ryan’s plan

remains fixed at $6,600, it would save the government $600.

But the total cost of insuring the beneficiary through the private sector would be $20,600, compared to $12,400 under traditional Medicare. For every dollar that the government would save on this beneficiary, it would generate more than

$13 of waste.

Congressional Budget Office & Center for American Progress

Increased Costs:Wasteful spending

Harms of Ryan PlanDecrease in Coverage

By 2033, the Ryan plan fails to cover anyone between the ages of 65 and 67. While the Ryan plan would cover less than 30 percent of the cost of a 67-year-old’s private health insurance, it would

cover none of that of the 65-year-old.

By gradually denying coverage to people up to age 67 and shifting costs off to those it would continue to cover, the Ryan plan saves the government $4.9 trillion from 2022 to 2084 – about the size of the Social Security shortfall over the same

period. On the other hand, the private coverage is so expensive that the total cost is $34 trillion more than what would be paid under traditional Medicare. Seniors would be required to pay $39 trillion more under the Ryan plan – more than seven times

the Social Security shortfall. Center for American Progress

Decrease In coverage

14-27 million Medicaid enrollees would lose coverage if Medicaid is block-granted.

The premise hinges on a plan requiring “responsibility”, and “Ryan’s ‘responsible’ plan for reducing the deficit rests on

massive cuts in healthcare for lower-income Americans while simultaneously reducing taxes for the wealthy.

The CBO has estimated that 30-48 million people would lose health care coverage under the Ryan Plan.

Decrease In coverage:Block Grants

Harms of Ryan PlanHarms to States and Federal

Government

The Ryan Plan would substantially reduce federal payments to states, challenging states’ ability to finance coverage for

their low-income residents.

This reduction could result in large reductions in payments to providers and enrollment.

In turn, these reductions would likely worsen the problem of the uninsured and strain the nation’s safety net.

To avoid such cuts, states would need to increase their own spending.

Harms to the States

Rolling back the ACA would increase federal budget deficits by

$230 billion by 2021

Harms to Federal Government

Additional Arguments

The difference between Medicare and private insurance is not just in the level of spending, but also in rates of growth.

Historically, Medicare per capita spending has grown a bit slower than the private sector's. But when Medicare is serious about containing costs—as demonstrated by the

Affordable Care Act—the difference really shows.

The Congressional Budget Office (CBO) finds that Medicare premiums, currently estimated to be 11 percent lower than private insurance premiums for the same benefit package,

will be about 30 percent lower by the end of the next decade.

Medicare Costs Grow Slower than Private Plans

Ryan Plan: The amount of money in a voucher increases with inflation.

Problem: Medical costs increase at a much faster rate; the voucher system could not keep up with the rate of increase for medical

costs. Thus leading to an overall increase in cost.

Ex: “When the program begins in 2022, the typical 65-year old would be responsible for about 25% of the cost of their healthcare, which is consistent with Medicare as it exists today. However, the share paid out-of-pocket by this typical 65-year-old in 2030 would be 68% under

the Republican plan.”

This both increases costs and risk for beneficiaries. Congressional Budget Office & Kaiser Family Foundation

Voucher System

70% of Americans prefer to keep Medicare as it is today

25% want the program changed to a “premium support” system.

83% of democrats, 71% of independents, and 53% of republicans also prefer to maintain the current Medicare system, rather than adopting a new “premium support”

system

Kaiser Family Foundation, Kaiser Heath Tracking Poll — February 2012

Americans don’t approve of the Ryan plan

“Rep. Ryan claims that under his plan seniors will be enrolled in the same plan members of Congress and federal employees

receive. This is not accurate. Federal employees receive a “consistent level” of contributions to health costs. Under Rep.

Ryan’s plan the government voucher would not keep pace with increases in medical costs, meaning seniors would be

forced to pay more of the cost.”Center For American Progress & Office of Personnel Management 2011

Not the same as federal plan

additional refutations

Questions?