Study: Privatized Medicare would cost patients more

WASHINGTON A privatized health care system would cause 59 percent of Medicare recipients to pay higher premiums, a study released on Monday revealed.

The research also discovered that there were stark regional differences leading to big hikes in some states and counties.

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The report by the nonpartisan Kaiser Family Foundation immediately became ammunition in the presidential campaign. The group has noted that their findings should not be considered a report on Republican presidential candidate Mitt Romney and running mate Paul Ryan's health care plan due to lack of specific details. However, Kaiser stated that their research was modeled after the Romney-Ryan approach.

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Romney and 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.

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. That's part of a new pattern of regional disparities that would emerge from overhauling Medicare's payment system, 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 implemented. 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 taken place, and all Medicare recipients are already in the new system.

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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.

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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 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.

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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.

Another recent study conducted by The Commonwealth Fund led by economist Jonathan Gruber who advised Obama's Affordable Health Care Act said that 72 million Americans would be uninsured by 2022 if Romney-Ryan's plan was put in place. Families USA also released data that Romney's plan would cost families 92 percent more by 2016 than the current Affordable Health Care Act.

In both cases, the Romney campaign was critical of the results, saying that the research was based on facts and statistics that were not representative of the Romney-Ryan approach.

[mikesfilms]

"In July, CBO estimated that a House Republican bill to repeal the Affordable Care Act would result in a $109 billion increase in the federal budget deficit over 2013-2022," the group noted.
If Mitt Romney gets elected as president and keeps his promise to repeal the 2010 health reform law, more than 72 million Americans will be lacking health insurance by 2030 and health care costs will rise, a report from the Commonwealth Fund projects.

[wadem7-2009]

All politicians that work for us should accept the same retirement benefits and healthcare insurance they legislate for we the people.

[Shallow_RepubsAre_CRETINs]

======================================
WHY I WILL NOT VOTE FOR A REPUBLI-'CON':
======================================

REASON # 5 --- The last time that the Republi-'cons' controlled the government, per capita health care cost in the nation DOUBLED!

From the Centers for MEDICARE and MEDICAID website...the National Health Expenditure Per Capita by Calendar Year:

January 1995 = Republi-"Cons" Take Over Both Houses of Congress (Senate and House) .... Notice what happened to the Health Care Expenditure per Capita during the next 12 years that they control the congress (January 1995 to January 2007):

YEAR ...... Per Capita Cost ...... % Growth from Previous Year
1995 .......... $3,825* ............... N/A
1996 .......... $3,988 ................. 4.4%
1997 .......... $4,169 ................. 4.5%
1998 .......... $4,367 ................. 4.5%
1999 .......... $4,601 ................. 5.3%
2000 .......... $4,878 ................. 6.4%
2001 .......... $5,241 ................. 7.7%
2002 .......... $5,687 ................. 8.4%
2003 .......... $6,114 ................. 7.6%
2004 .......... $6,488 ................. 6.1%
2005 .......... $6,868 ................. 5.8%
2006 .......... $7,251* .............. 5.8%

*During the 11 years that Republi-"cons" controlled both houses of congress, the Health Care Expenditure per Capita basically DOUBLED (1995 = $3825...to... 2006 = $7251), climbing at an average rate of 5.9% per year. Folks, that was way faster than inflation and U.S. wage growth. THIS, LADIES AND GENTLEMEN IS WHAT THE REPUBLI-"CONS" WANT US TO GO BACK TO.

January 2007 = Democrats take over both houses of congress, notice how the Health Care Expenditure per Capita growth slows down...

2007 .......... $7,628 ............. 5.0%
2008 .......... $7,911 ............. 3.6%
2009 .......... $8,149 ............. 3.6%
2010 .......... $8,402 ............. 3.2%

SOURCE FOR DATA: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html

(Click on: "NHE summary including share of GDP, CY 1960-2010")

[GossamerWings]

Thank you for the post. This is excellent information.

[kevcl6750]

And after Obamacare raids Medicare how many doctors are going to refuse new Medicare patients and how many hospitals will close because of obamacare? Newsflash : As long as medical costs continue to explode, premiums under ANY PLAN WILL GO UP ! Come on down to Costa Rica seniors ! A colonoscopy here is $400 in a private, American managed hospital ! Stay up in the US for medical care and you will get a colonoscopy allright, but not the medical kind !

[wadem7-2009]

Thus your answer is what, kev, nothing? At least you're in lockstep with other Republicans, but there is a better way. It is the board that will determine "best practices" also called "Death Panels" by wingnuts. We need to arrest costs and that means docs and hospitals will need to have more patients in order to address the cost factors. It works in most of the advanced nations. It can work here, once we get past the healthcare lobby and Republican opposition.

[kevcl6750]

And after Obamacare raids Medicare how many doctors are going to refuse new Medicare patients and how many hospitals will close because of obamacare? Newsflash : As long as medical costs continue to explode, premiums under ANY PLAN WILL GO UP ! Come on down to Costa Rica seniors ! A colonoscopy here is $400 in a private, American managed hospital ! Stay up in the US for medical care and you will get a colonoscopy allright, but not the medical kind !

[Filmguy870]

Hmm...how will Mr. Mittens spin that tomorrow night? In a way that tips the polls in his direction??? Are we that stupid????

[tl29szzz920]

Of course it will cost more thats the whole point. Medicare was supposed to be a paid in advance pension plan for those in retirement who weren't rich. But those in the top 1% don't like it because they pay into it and get nothing out of it. Therefore the country club republicans plan is to take baby steps to eliminate it. Get the system on a voucher plan, then when the problems come up, complain that the solution is not a good one. Then get it reworked into a 401 type plan, where everyone has to pay into it through their employer, but only those that elect it. Those that don't because they don't make enough will end their last few years on the street, sick and poor.

[wadem7-2009]

You do realize, TL, the only thing that separates us from the successful treatment of everyone in other advanced nations is that they don't insist on an unnecessary bureaucracy between the patient and service providers, the for profit insurance monopoly. As long as Americans allow this arrangement, we will pay more than twice what true healthcare treatment costs. Medical insurance is like labor unions and I think you'll admit, we just don't need them anymore.

[johnlockesghost]

The damn fool politicians are trying to modify Medicare until they make it as bad as the tax code and that goes for both parties. Leave it to hell alone!

BTW, I wonder how they'd like the general public to screw with their health care system?

[cubscout09]

I signed a petition on SignOn.org that would do exactly that. This morning, there were nearly a quarter million signees.

[cntrygirl3]

And someone is surprised by this. These people have to make a profit. Medicare is one of the most efficiently run programs in the government. Private insurance would not go after fraud because it would take too much money. Medicare advantage has always cost more about time we got rid of it.

[Repubs_R_Fiscal_Liberals]

What's odd is that we pay for Iraq's universal healthcare.

And we subsidize Israel's universal healthcare.

Too bad that the fiscally-conservative RINOs don't give a crap about cutting that off...

[retmw1]

Correct as usual slow. Seems they can find the money for foreign aid, corporate and farm welfare, yet have a problem finding money for healthcare for the seniors of this country.