WASHINGTON - At a Ways and Means Committee hearing today with Health & Human Services Secretary Kathleen Sebelius, Republicans reaffirmed their support for a proposal to end the Medicare guarantee and dramatically increase costs for seniors and the nation. Their “plan," as they again called it today, would have enormous repercussions for millions of seniors, as the Congressional Budget Office made clear in an April 2011 report. According to that analysis, the end result is a dramatic increase in the financial burden of health costs, with future retirees paying up to nearly three times as much for their health care than they would if current law continued. What’s more, the CBO said that national health spending will actually increase because the private plans cost more than Medicare.
Secretary Sebelius pushed back against the proposal today at the hearing, saying: “What we can tell you definitively is that the proposal put forward and passed by the House Republicans that actually shifted costs to the backs of Medicare beneficiaries, whether they be seniors or disabled folks, with no real underlying health care cost transformation is not something that is able to be supported by this Administration. The voucher program that would essentially end Medicare as we know it [and] shifts costs on to seniors."
FLASHBACK: The Republican proposal in detail…
According to the CBO: “A typical beneficiary would spend more for health care under the proposal than under CBO’s long-term scenarios for several reasons. First, private plans would cost more than traditional Medicare because of the net effect of differences in payment rates for providers, administrative costs, and utilization of health care services...Second, the government’s contribution would grow more slowly than health care costs, leaving more for beneficiaries to pay." (p.23)
• End the Medicare guarantee for future retirees: “People who become eligible for Medicare in 2022 and subsequent years would receive a payment that was larger than $8,000 by an amount that reflected the increase in the consumer price index for all urban consumers (CPI-U) and the age of the enrollee." (p. 8)
• Nearly triple Medicare costs for seniors and people with disabilities: “Under the proposal, most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare under either of CBO’s long-term scenarios. CBO estimated that, in 2030, a typical 65-year-old would pay 68 percent of the benchmark under the proposal, compared with 25 percent under the extended-baseline scenario and 30 percent under the alternative fiscal scenario." (p. 21)
• Move Medicare beneficiaries into private plans that are less efficient and more costly than Medicare: “A private health insurance plan covering the standardized benefit would, CBO estimates, be more expensive currently than traditional Medicare. Both administrative costs (including profits) and payment rates to providers are higher for private plans than for Medicare...for a typical 65 year old in 2011, CBO estimate that average spending in traditional Medicare would be [11 percent lower] than the spending that would occur if the same package was purchased from a private insurer" (p. 21)
