Study: Privatized Medicare would raise premiums

Kaiser's top Medicare expert, Tricia Neuman, said the organization has been working on the report since the early part of the year, well before Romney picked Ryan as his running mate and cemented his support for the congressman's Medicare overhaul.

Kaiser serves as an information clearinghouse about the health care system. Neuman, a vice president of the group, said the goal is to help inform next year's budget debates, regardless of who is elected president.

Currently about 75 percent of Medicare's nearly 50 million beneficiaries are in the traditional government program, while the remaining 25 percent have opted for private Medicare Advantage plans. The standard Part B premium most beneficiaries pay is now $99.90 a month.

The study's main finding is that changing Medicare from an open-ended program that covers the same benefits across the country will have profound local implications.

Since Medicare spending per person varies dramatically around the country, privatizing the program would create big regional disparities. In high-cost areas, the difference between the second-least expensive private insurance plan and traditional Medicare can be substantial, said Neuman.

Because the government's contribution would be limited under the new system, seniors in areas with high medical costs would see an increase in their premiums for traditional Medicare unless they switch to a low-cost private plan.

In low-cost areas, the reverse would be true: seniors in private plans would pay higher premiums unless they switched to traditional Medicare.

Overall, the study found that 59 percent of all Medicare recipients would face higher premiums if they stick with their current coverage, including about half of those in the traditional program.

In five states — California, Connecticut, Florida, New Jersey and Nevada — more than 45 percent of beneficiaries would pay at least $100 a month more in premiums.

Premiums could also vary within states. In San Francisco and Sacramento counties in the northern part of California, premiums for traditional Medicare would remain unchanged. But to the south, in Los Angeles and Orange counties, premiums would go up more than $200 a month.

"If coupled with caps on the growth in Medicare spending, a premium support approach could make federal (spending) for the Medicare program more predictable but also increase costs and financial risks for beneficiaries over time," the report said.

Online:

Kaiser Family Foundation study - http://tinyurl.com/8bj3l6h