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Study Finds Romney/Ryan Medicare Plan Would Raise Premiums

A new study has found that most Medicare beneficiaries would have paid higher premiums if the Medicare overhaul proposed by Republican presidential candidate Mitt Romney and his running mate Paul Ryan had been in effect in 2010. 

The study, by researchers at the non-partisan Kaiser Family Foundation, found that 59 percent of Medicare beneficiaries would have paid higher premiums in 2010 unless they shifted to a cheaper plan from traditional Medicare or their current Medicare Advantage plan. The average premium increase would have been more than $100 a month in California, Michigan, New Jersey, Nevada and New York, while Florida seniors would have seen their payment for Medicare rise more than $200 a month. Beneficiaries in Miami would have paid $492 more a month if they remained in traditional Medicare.

The proposal, which some refer to by the shorthand Vouchercare, would end Medicare as a government-funded program that pays all costs except for deductibles and co-pays.  Instead, financial risk for additional program costs would be shifted from the government to seniors.  Each beneficiary would receive a fixed amount of money every year (a “voucher”) to buy coverage either from traditional government-administered Medicare or from private health plans that would compete with Medicare while offering the same basic benefits.  

The amount of the voucher – which would be tied to the second lowest cost plan offered in an area or traditional Medicare, whichever is lower -- might cover the full cost of Medicare, but there is no guarantee that it would. If the voucher can’t cover the cost of the plan beneficiaries choose, they would have to pay the difference themselves.

The Kaiser study evaluated how such a proposal would have worked in 2010 based on the cost of traditional Medicare and private Medicare Advantage plans around the country in that year.  In areas of the country where the cost of care is higher, researchers found that premiums would have risen significantly for those choosing to remain in traditional Medicare.  Even most of those currently in Medicare Advantage plans, which are run by private insurers, would have paid more.  Nearly nine in ten of those beneficiaries would have paid an average of $87 a month more to stay in their current plans.

Beneficiaries might be encouraged to switch to lower-cost plans, but the study’s authors note that this could mean significant changes in the type and quality of care, as well as choice of doctors.

Below is a map by Kaiser showing the state-by-state impact of a voucher plan implemented in 2010.

For more on the study, click here.

For a direct link to the study, click here.