Study: Seniors' health costs would soar in GOP plan

WASHINGTON — Seniors and people with disabilities would pay much more for health care under a new Republican plan aimed at curbing the nation's growing debt, a Congressional Budget Office analysis shows.

For example, by 2030, typical 65-year-olds would pay 68 percent of the cost of premiums, deductibles and other out-of-pocket costs, according to the CBO. They would pay 25 percent under the current Medicare system, the CBO said.

The GOP budget proposal, introduced Tuesday by House Budget Committee chairman Paul Ryan of Wisconsin, also would raise the eligibility age for subsidized health care and repeal big chunks of the health-care law that Congress approved last year.

Coming amid growing concern over the nation's debt, Ryan's plan is part of an overall GOP effort to reduce federal spending by up to $6.2 trillion over 10 years.

The budget, which House Republicans pushed through the Budget Committee on Wednesday, is a nonbinding road map whose taxing and spending changes are supposed to be enacted in future legislation. The plan has no chance of being approved by the Democratic-run Senate, making it more of a statement of priorities that candidates are likely to embrace or attack during the 2012 campaigns.

Besides eventually eliminating traditional Medicare, the 10-year budget proposal would transform Medicaid, the state-federal program for the poor. Ryan would give states block grants and end federal rules specifying who receives what benefits, leaving those determinations to the states. The plan would cut the amount that states receive by hundreds of billions of dollars over a decade.

Americans also wouldn't be required to buy health insurance, and employers wouldn't have to offer it. States wouldn't be on the hook to set up insurance marketplaces as they are under the 2010 health-care law, which Ryan would scrap.

The proposed changes have drawn criticism from Democrats and advocates for the elderly and the poor. Many zeroed in on the impact on Medicare.

Under the Ryan proposal, the program would remain largely unchanged for people now 55 and older, but beneficiaries would be shifted into private insurance plans in 2022 with federal subsidies under a model called "premium support."

Those future enrollees would receive a set amount from the government to buy private plans. The plans would cost considerably more than traditional Medicare, the CBO said, partly because private plans pay hospitals, doctors and other providers more and have higher administrative costs. Enrollees also would pay a higher percentage of the overall cost of their coverage.

"What CBO is saying is beneficiaries would pay much less under traditional Medicare for two reasons: The overall cost of the plan would be much cheaper, and they would pay a lesser share of that less-costly plan," said Edwin Park of the Center on Budget and Policy Priorities, a liberal research center.

Ryan's proposal, dubbed "The Path to Prosperity," also would scrap the health-care law's Medicaid expansion, repeal a voluntary long-term-care insurance program and cancel an advisory board that the law created to recommend changes to Medicare spending.

Ryan appears to retain the health law's Medicare payment cuts to hospitals and Medicare Advantage plans.

Chip Kahn, president and chief executive officer of the Federation of American Hospitals, which represents for-profit hospital and health-care systems, said Ryan's plan to repeal the law's coverage expansions but keep provider cuts "will severely impact access to essential medical care for seniors, as well as the lowest-income Americans."

Republicans campaigned last year by criticizing Democrats for the Medicare provider cuts, saying they would jeopardize seniors' access to care.

"They've taken those savings — the same ones that they've criticized — in their plan," said Maryland Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee. "The health-care reforms enacted in the Affordable Care Act, which they say they're repealing, they're not repealing at all."

In an email Wednesday, Ryan said, "Those who criticize plans to save Medicare, while offering none of their own, only ensure that the program continues on a path to insolvency. And those who compare plans to save Medicare with the status quo are comparing real solutions with a false reality. In its analysis of 'The Path to Prosperity,' the nonpartisan Congressional Budget Office confirms that Medicare as currently structured is unsustainable."

The CBO highlighted key features of Ryan's proposal, based on its analysis and information from the congressman's staff, including:

• Starting in 2022, the eligibility age for government-subsidized health care would increase by two months a year until it hit 67 in 2033.

• The "doughnut hole" in the Medicare prescription-drug benefit — a period in which beneficiaries pay 100 percent of drug costs — would continue under the Ryan plan. The health law passed last year calls for the coverage gap to end by 2020.

• The private plans offered starting in 2022 would have to comply with a standard for benefits set by the Office of Personnel Management and would have to charge the same premiums for all enrollees of the same age.

• The premium-support payments would vary depending on health status and incomes of beneficiaries. Enrollees who are sicker than average, for example, would receive larger payments. Wealthy enrollees would receive less: Those among the top 2 percent of earners would receive 30 percent of the premium support, while the next 6 percent would receive half.

The CBO report said the average government payment for a 65-year-old in 2022 would be $8,000. In each successive year, it would increase to reflect inflation and the enrollee's age. Patients' share would increase sharply, because health-care costs are expected to continue to increase faster than the inflation rate.

Information from The Associated Press and Seattle Times archives is included in this report.

Kaiser Health News, www.kaiserhealthnews.org, is an editorially independent news service of the Kaiser Family Foundation, a nonpartisan health-care policy organization that isn't affiliated with Kaiser Permanente.