In an attempt to save Medicare, 2012 vice presidential candidate Rep. Paul Ryan proposes a plan that would potentially halt the process of Medicare going bankrupt in 2024.
Ryan’s plan would not change the health care benefits received by current Medicare beneficiaries. It would only affect those under the age of 55. Ryan plans to replace traditional Medicare with a voucher-like credit that some are calling premium support. The fixed amount that Medicare beneficiaries will receive can be used toward the cost of a private health insurance plan or a government-type program similar to original Medicare.
According to economists, Ryan’s plan might cut the deficit. Instead of Medicare paying a percentage of a pre-determined amount for the kind of health care a beneficiary requires, Ryan’s plan encompasses a fixed government payment that would limit the amount of money going toward the Medicare program. It will make patients and even health care providers more mindful of the costs.
However, Ryan’s plan to end the Affordable Care Act would re-open the gap in Medicare prescription drug coverage known as the “donut” hole. Currently, the Obama administration helps Medicare beneficiaries who have lost coverage with a 50-percent discount on brand-name prescription drugs, a 14-percent discount on generic drugs, and a one-time $250 rebate. This assistance is scheduled to increase annually until the gap is completely closed.
Ryan also plans to increase the Medicare eligibility age from 65 to 67. Supporters of Ryan’s plan say that would contribute to sustainability. However, critics believe the plan would just shift more of the cost to beneficiaries rather than actually control costs. Joe Antos, a health economist from American Enterprise Institute, said that Ryan would have to explain a lot of things for his plan to be accepted, and it is making independents nervous. A lot of Americans really rely on Medicare to help with their health care expenses when they retire or are disabled and they are suspicious and apprehensive about the changes Ryan has proposed.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.