Quantcast

Study: Privatized Medicare would raise premiums

By Ricardo Alonso-Zaldivar

Associated Press

Published: Monday, Oct. 15 2012 2:17 p.m. MDT

Nina Musselman sits on her deck in Grants Pass, Ore., on Aug. 31, 2012. When she first moved to this small town nine years ago, she had no trouble finding a family doctor who would take Medicare. But when that doctor left town, she had a hard time finding one that would stick.

Jeff Barnard, ASSOCIATED PRESS

Enlarge photo»

WASHINGTON — Nearly six in 10 Medicare recipients would pay higher premiums under a hypothetical privatized system along the lines of what Republican presidential candidate Mitt Romney has proposed, according to a study released Monday.

The report by the nonpartisan Kaiser Family Foundation also found striking regional differences that could lead to big premium hikes in some states and counties. That finding instantly made it ammunition in the presidential campaign.

In the senior-rich political swing state of Florida, the hypothetical plan modeled by Kaiser would boost premiums for traditional Medicare by more than $200 a month on average. In Nevada, another competitive state, 50 percent of seniors would face additional monthly premiums of $100 or more for their coverage. A new pattern of regional disparities would emerge from overhauling Medicare's payment system, the report said.

Romney and his running mate, Wisconsin Rep. Paul Ryan, have proposed changing Medicare to a "premium support" system dominated by private plans that are paid a fixed amount by the government. President Barack Obama says replacing the current open-ended Medicare benefit would shift costs to seniors.

Romney's approach would mirror the difference between traditional workplace pensions and modern-day 401(k) plans, in which the employer contribution is limited. While Medicare financing wouldn't be as heavy a lift for taxpayers, the risk is that retirees could end up paying more if medical costs rise.

The study carried a prominent disclaimer: It should not be taken as a specific analysis of the Romney-Ryan proposal, partly because their plan lacks details. However, Kaiser says it is modeled on what Romney and Ryan propose.

"This approach is similar to the premium support proposal included in (House Budget) Chairman Paul Ryan's ... budget proposal for (fiscal year) 2013 that was embraced by presidential nominee Mitt Romney," the report said.

Like the Romney-Ryan plan, government health insurance payments for individual seniors would be tied to the cost of the second-lowest private insurance plan in their geographical area, or traditional Medicare, whichever is less expensive. Seniors could pick a private plan or a new public program modeled on traditional Medicare. But if their pick costs more than the government payment, they would have to pay the difference themselves.

One of the biggest differences, however, is that the report assumes the privatization plan is already in place. Under Romney-Ryan, current beneficiaries and those 10 years from retirement could stay in the traditional system. But the Kaiser study assumed the change has already happened, and all Medicare recipients are already in the new system.

The study also did not model the effects of additional financial help that Romney has promised for low-income seniors and those in frail health, because such details have not been filled in.

The Obama campaign pounced on the findings, while the Romney camp pointed to the disclaimer, saying the report does not reflect the candidate's own plan.

"As the authors stress, this is not a study of the Romney-Ryan plan," said Romney spokeswoman Andrea Saul. "Our plan would always provide future beneficiaries guaranteed coverage options with no increase in out-of-pocket costs from today's Medicare."

The Obama campaign posted a link to the study on its website.

"Under Romney's plan, millions of people —especially those with complicated health needs who see a lot of different doctors— would have to give up their doctors or pay extra to maintain access to their choices," said Obama spokesman Adam Fetcher.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS