The future of Medicare is uncertain, to be sure. The flood of baby boomers turning 65 years every day for the next nineteen years has highlighted this topic in the news. But that’s not all, folks – republican candidate, Mitt Romney announced Saturday that his running mate would be U.S. Representative, Paul Ryan, a man with a Medicare plan.
Maybe you’ve heard the distant rumblings about Ryan’s proposed Medicare changes, but aren’t quite sure what it’s all about. The main controversy over the plan has to do with the manner in which health care providers receive payment.
“Premium support” is the paying out of cash to Medicare beneficiaries so that they can buy their own health insurance from a private health insurance company. This would replace the current Medicare system, in which the government pays health care providers directly for the medical services received by Medicare beneficiaries.
The premium support model would not be initiated until 2023. This means that no one over 55 years of age would see any changes to the Medicare they receive now or expect to receive. After this time, seniors would be given vouchers to purchase health insurance. They could use the vouchers to buy private health insurance or government-run insurance on an exchange. The idea is that private insurance companies would begin to compete with the Medicare program to offer the best possible plan for the amount of “premium support” a senior received.
Seniors would be required to pay out-of-pocket for any health care expenses their voucher could not cover. This is meant to dissuade seniors from “over-using” health care services that they really don’t need. In addition, if health care providers know that seniors only have a limited amount to spend, it follows that they would need to become more efficient when it comes to treating patients, right? Aye, there’s the rub! Critics of the proposed plan feel that it relies too heavily on providers becoming more efficient and that seniors will just be paying extra for the care they are already receiving.
Medicare reform is not the easiest subject to wrap your head around. This CBS News article does an excellent job of presenting the facts and expressing concerns from both sides of the aisle. We found it quite helpful, ourselves.
