The GOP’s Medicare Privatization Plan Will Cost Seniors 14,770 A Year

Apr 11 2011 Published by under Uncategorized

The Republican party may be in for a huge wake up call from their more moderate base if they wholly support Representative Paul Ryan’s (R-WI) plan. In a recent report from the Associated Press,DINESH RAMDE, Paul Ryan is receiving some heavy skepticism by some supporters in regards to his plan to privatize Medicare.

Brian Krutsch has been long one of many automatic votes here for Rep. Paul Ryan. The unemployed warehouse manager, along with a solid majority of other Janesville voters, has helped elect Ryan seven times and watched with pride as he became one of Congress’ leading authorities on the federal budget. But this week, admiration has been tinged with apprehension as one of Ryan’s signature ideas — ending Medicare’s status as a full, guaranteed benefit for senior citizens — suddenly took a step toward reality.

“I think that’s one of the things they should probably leave alone — you know — unless it’s necessary,” Krutsch said as he took a break from reviewing job openings at the Rock County Job Center. “Old people need help with medical bills. There’s too many people under-insured right now — especially people like myself now who don’t have insurance.”

Another supporter of Paul Ryan is raising some concern,

Char Christensen, a retired social worker, said she wonders what happened to the congressman who once seemed to vote with his heart. She said she fears he has strayed from his small-town roots and become part of a partisan machine.

“Ryan used to be for the people and now he’s for himself,” said Christensen, 63, who doesn’t plan to vote for Ryan again. “That’s not what public service is supposed to be.”

Many Republicans are holding out on the specifics of Ryan’s budget due to its heavily controversial cuts and privatization of Medicare. In fact the potential GOP Presidential candidates have been relatively quiet, only voicing their support for the overall plan to cut spending, but not giving specifics on where the cuts should come from.

Unfortunately these Republicans are going have to do more than vaguely support this budget in a few months. This coming summer, the 2012 budget will be the topic of conversation and the GOP is going to have to take a side. They will have to either support or oppose the most controversial piece, which is the privatization of Medicare by 2022.

Medicare has helped millions of seniors since the 60s receive the medical care they need. If Paul Ryan and the Republicans’ plan goes through, those of us who are younger than 55 years of age will continue to pay into the Medicare system, but when we retire we will receive a “voucher” to buy our own private insurance. The plan is supposed to “save” Medicare, but some reports that are trickling out say these are voodoo numbers the GOP and Rep. Ryan are promoting.

The Republican plan would dramatically increase the cost of healthcare for American’s seniors.

Here is the CBO’s statement via the Los Angeles Times,

“But because commercial insurers cost more to run than government plans, the Wisconsin Republican’s proposal to privatize Medicare starting in 2022 would actually spark a dramatic increase in how much the nation spends on healthcare for the elderly, according to an independent analysis by the nonpartisan Congressional Budget Office.”

How much would the increase be?

According to the CBO estimates, Ryan’s privatization plan would increase the cost of healthcare more than $12,510 a year, for our seniors.

Here is how the CBO lays out the Republican Plan;

The average American would receive a “voucher” for $8,000, which is roughly what the CBO estimates Medicare would have to pay out for the average senior in 2022. In addition to the government’s costs, the CBO estimates that seniors, in 2022, would dish out about $6,150.00 in out-of-pocket costs in the Medicare system. That totals an average cost of health care for participating seniors, in 2022, to be $14,770.

Under the GOP’s privatization plan, the cost to buy the health insurance policy would cost about $20,520 per year – leaving the seniors out-of-pocket in the amount of $12,510 or more than twice what they would pay in 2022 should the Medicare system we currently have continue forward.

Now that seniors, the most costly demographic to cover for health insurance, are back in the private market, everyone’s premiums will increase dramatically. To health insurance companies, younger people are more profitable, while seniors cost money. So in order to cover the cost of seniors, everybody’s premiums increase.

The other question is, will “vouchers” increase in value throughout the years? In a recent post on Business Insider that doesn’t seem to be the case.

The “vouchers” will be linked to the CPI(consumer price index), not the inflation of medical care expenses or health insurance costs. This protects the government and screws the seniors, period! So as years pass, the vouchers will cover less and less. This will further shift the cost of medical care onto the seniors’ pocketbooks.

Now who is going to latch on to this proposal? Even Rep. Paul Ryan’s office hasn’t responded to this report, according to the L.A. Times.

So who will lose in this proposal. EVERYONE! Seniors pay more out-of-pocket and the younger generations pay higher premiums. Wait! There is one winner, health insurance companies, they will be raiding the U.S Treasury.

Remember $8,000 of taxpayer money will now be handed over to your private health insurance company, rather than going directly to care for medical procedures. Also a part of that $8,000 dollar check you received will also be funneled back to Representative Ryan and others through political donations, thanks to Citizens United.

Image: Pop Dose

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