The $6,400 Question
Understanding the Ryan Medicare Plan and its impact on seniors
Recall the infamous game show The $64,000 Question? With the Ryan Medicare plan front and center, it’s become The $6,400 Question. To help the public better understand what the Ryan Medicare plan would mean for America’s seniors and seniors-to-be, Ways and Means Democrats are introducing “The $6,400 Question,” a regular question named after the $6,400 increase in out-of-pocket health care costs that seniors would experience in 2022 under the Ryan budget, as passed with nearly unanimous GOP support in April 2011.
QUESTION: What does the public think of the Ryan Medicare plan?
QUESTION: How would the Ryan Medicare plan affect current seniors?
QUESTION: How many Americans are expected to turn 65 – Medicare eligibility age – in 2022?
QUESTION: What percentage of Americans are on Medicare?
ANSWER: Under the Ryan plan, overall health care spending for the typical senior would balloon to $20,513 in 2022 because private insurance is much more expensive than traditional Medicare. The Ryan voucher would only pay for $8,000 – 39% -- of that, making the typical senior responsible for $12,513 in out-of-pocket costs. Under Medicare, however, overall health care costs for the typical senior would be far lower – $14,769 – with the typical Medicare beneficiary paying $6,154 in out-of-pocket costs. So, the difference in out-of-pocket costs for the average senior in 2022 would be $12,513 under the Ryan plan, versus $6,153 under traditional Medicare. That’s a $6,359 increase to be precise. Or approximately $6,400 for rounding purposes.
QUESTION: What does the public think of the Ryan Medicare plan?
ANSWER: A Pew Research Poll released this week makes it pretty clear. By a margin greater than 2-to-1 seniors oppose the plan to end traditional Medicare. In fact, adults of all ages oppose the plan by large margins. Independents oppose it by a wide plurality.
The Pew poll is no outlier. A New York Times poll out today confirms its findings. As one 75-year-old independent told the Times: “We’re enjoying the benefits now, and the Paul Ryan program of making it into a voucher system would change things. I know it’s not intended to apply to people in our age group, but I’m concerned about the future. I think it’s a wonderful program, and I’ve got middle-aged children and I don’t want to see the program destroyed. It’s probably one of the best programs sponsored by the federal government that we’ve ever had. It does have to be made fiscally sound, but there are ways to do that without destroying the whole concept or the substance of it.”
Pew Research Poll….
QUESTION: How would the Ryan Medicare plan affect current seniors?
ANSWER: Don’t think for a second that the Ryan plan would only affect people 55 and younger. Current seniors will see rising costs in Medicare as new beneficiaries, who are healthier – and less costly – are pushed into the privatized system. It’s not hard to understand why. As the Brookings Institution’s Henry J. Aaron laid out in an essay last week, “the average cost of serving those who remain in traditional Medicare would go up as private insurance companies market selectively to those with relatively low anticipated costs. The average cost of those who remain in traditional Medicare would therefore increase. As a result of this gap, the financing for traditional Medicare would become progressively less adequate, throwing into doubt the very survival of the program.”
And that’s not to mention the negative impact on current seniors if Republicans are successful in repealing key provisions of Obamacare, including reopening the prescription drug doughnut hole, reinstating cost-sharing for life-saving preventive benefits and eliminating a new annual wellness visit. And as the New York Times noted in a story last week, repealing the Obamacare savings “would hasten the insolvency of Medicare by eight years — to 2016.”
QUESTION: How many Americans are expected to turn 65 – Medicare eligibility age – in 2022?
ANSWER: Approximately 3,965,000 Americans are expected to turn 65 in 2022, according to the Medicare actuary. Under the Ryan Medicare plan, they would suddenly be saddled with an additional $6,400 a year in out-of-pocket health care costs, according to the Congressional Budget Office.
QUESTION: What percentage of Americans are on Medicare?
ANSWER: Overall, 16 percent of Americans are on Medicare – 49,435,000 out of 312,800,000 total.Among adults, 21 percent are on Medicare – 49,435,000 out of 234,564,000. Thus, Ryan’s scheme could result in widespread, inter-generational economic effects as one in five adults who otherwise would have enrolled in Medicareare forced to begin shopping for health insurance with a voucher. A state-by-state breakdown is available here.
Ways & Means Committee Democrats