Republican presidential candidate Mitt Romney keeps assuring older Americans that they have nothing to worry about when it comes to his plans for Medicare. But there are at least five reasons that people with Medicare today and those approaching retirement should be concerned about the Romney/Ryan plan.
First, it would increase Medicare premiums and co-insurance for today's seniors. Mr. Romney has been emphatic that his plan would undo the $716 billion in Medicare savings included in the Affordable Care Act. But all of those savings are generated by cutting wasteful spending to insurers, pharmaceutical companies and other providers; none by cutting seniors' benefits.
If Medicare pays out more, like any insurer, it would have to raise premiums and co-insurance. How much? According to the Department of Health and Human Services, without the Affordable Care Act, Medicare Part B premiums and co-insurance would increase an average of $347 per beneficiary every year over the next 10 years. By 2022, a couple with Medicare would pay an extra $1,258.
Second, prescription drugs and preventive care would become more expensive. Without the Affordable Care Act, the Medicare Part D prescription drug coverage gap, the "doughnut hole," would re-open. By 2020, this would expose everyone with Part D to $5,100 in out-of-pocket drug costs. Cost-sharing for Medicare preventive services like mammograms and colonoscopies would be re-imposed, too, making it harder for seniors to get the care they need to stay healthy.
Third, the plan would drain the Medicare trust fund. Today, it is fully funded until 2024. By accelerating Medicare spending and reducing revenues, the Romney/Ryan plan would make the trust fund run short in 2016. Creating this fiscal crisis would force Congress to find ways to make up the shortfall, such as by reducing benefits and raising seniors' out-of-pocket costs.
Fourth, the plan would decimate Medicaid. Medicaid is the main payer for nursing-home and long-term care, which allows people to stay in their homes. The Romney/Ryan budget would result in Medicaid cuts of one-third over the next decade. Cuts this big would force states, which administer Medicaid, to restrict eligibility for care. These cuts would burden frail seniors as well as their children, spouses and other loved ones who care for them.
Finally, in the long term, the Romney/Ryan plan would unravel the Medicare system. In 10 years, people born after 1957 would be forced into a voucher system, where they would receive a flat amount to purchase coverage from either a private insurer or the traditional program. Over time, as health care costs outstrip the value of their vouchers, younger people would have to pay thousands of dollars more.
But what about people born before 1958, who are supposedly safe in the "old" system? Without younger people coming into the system, "old" Medicare would cover an increasingly older and sicker population. Keeping that old system fiscally sound would require increasing premiums to offset the higher costs.
Moreover, as the old Medicare system would shrink, fewer doctors would be willing to take Medicare patients. And while seniors might decide to join a private insurance plan, they would have to accept the plan's limits on which doctors they could see. Either way, it would mean less access to physicians.
All this makes it clear that it is disingenuous, at best, to suggest that the Romney/Ryan Medicare plan would have no impact on today's seniors. Its implications are profound and troubling. As the debate on Medicare continues, seniors should listen closely.
Ron Pollack is executive director of Families USA, a nonprofit organization that promotes high-quality, affordable health care for all (www.familiesusa.org).