Medicare at Risk

By Jim Centner,
Director, Steelworkers Organization of Active Retirees (SOAR)

The new Republican budget reflects upside-down priorities – it protects special interest subsidies and tax breaks for those at the top, and cuts deep into the heart of the programs that are essential to the health of our seniors.  The Republican budget ends Medicare as we know it – converting it into a voucher-type program. While providing a windfall for the health insurance industry, it would force seniors to pay much more for healthcare. If Republicans get their way, premiums for more than 20 million seniors will skyrocket and they will all lose their guaranteed health benefits.

Starting in 2022, Medicare will be eliminated for new beneficiaries and converted instead into a voucher program.  There are more than 20 million near-elderly Americans who are now ages 50-54 who would not get Medicare when they retire but instead only get a coupon to purchase private health insurance.  This approach would transfer control of Medicare to insurers and there would be no guaranteed benefits, essentially ending Medicare. 

The voucher will fail to keep pace with increases in the cost of healthcare.  As a result, seniors will be forced to pay higher premiums in order to access the same benefits they would receive under the current system.  According to the Congressional Budget Office, a typical senior will spend more than twice as much of his or her own income on health services under the Ryan proposal, as compared to the current Medicare system.

Under current law, all seniors have guaranteed access to life-saving health benefits, including screenings for colon cancer, diabetes, and prostate cancer, as well as flu shots. If the Republican plan becomes law, there is a real possibility that seniors that were eligible for guaranteed health benefits last year could lose them.

The proposal would “reopen” the prescription drug donut hole, requiring that seniors pay full price for prescription drugs.  As a result, on average, seniors would pay $3,500 more for their medications over the next ten years.  Seniors and people with disabilities who have high prescription drug costs could pay an additional $12,300 over the next 10 years.

In their initial analysis of the Ryan Medicare plan, the non-partisan Congressional Budget Office determined, "Under the proposal, most elderly people would pay more for their healthcare than they would pay under the current Medicare system…" Under the proposal, the gradually increasing number of Medicare beneficiaries participating in the new premium support program would bear a much larger share of their healthcare costs than they would under the traditional program…That greater burden would require them to reduce their use of healthcare services, spend less on other goods and services, or save more in advance of retirement than they would under current law.