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Thursday, October 11, 2012

Governor Romney Doesn’t Want People Over 55 to Listen to His Medicare Plan. Here’s Why.

Marc Steinberg

Deputy Director of Health Policy

A five-part blog series about what’s really in Romney’s Medicare plan

Part 1: Higher prescription drug and preventive care costs

At the first presidential debate, Governor Romney said that people age 60 and over could just stop listening to his remarks on Medicare, because his plan wouldn’t affect them. But is it possible to make the kind of radical changes to Medicare he and Congressman Ryan are proposing and actually not change anything for people who rely on the program now? The short answer is no. Older folks—really, everyone 55 and over, who is allegedly “protected” from the Romney-Ryan plan—should absolutely be paying attention. There are at least five ways in which people with Medicare now and those nearing Medicare eligibility age would be harmed by the Romney-Ryan plan. They are the following:

1) higher costs for prescription drugs and preventive care;

2) higher premiums and co-insurance;

3) weaker Medicaid coverage for nursing home and home- and community-based long-term care;

4) an imminent shortfall in the Medicare trust fund; and

5) a weaker Medicare system that will make it harder to choose your own doctor.

 

This blog series will look at each of these five issues in turn. Let’s start with prescription drugs and preventive care. When the Medicare prescription drug benefit, known as Part D, was signed into law by President George W. Bush in 2003, it had a big gap in its middle—a gap that’s come to be known as the doughnut hole. Beneficiaries had coverage for an initial coverage period (up to the first $2,930 in total drug costs in 2012). Then, as their drug costs increased, their coverage would stop, just when they needed drug coverage the most. They’d be on their own for the next several thousand dollars ($3,700 in 2012) of their drug costs, until their coverage started up again. The doughnut hole never made any sense from a medical perspective—people with thousands of dollars in drug costs are the people who need their prescription drugs the most to keep from getting sicker. But until Obamacare became law 2010, no one did anything about it.

Since 2011, however, the gap has been slowly closing. It’s a gradual process, with coverage improving each year until 2020. But the real tangible benefits are already apparent. In 2011, seniors and people with disabilities who fell into the doughnut hole saw an average savings of $613. You can find out the average help in your state in Table 9 of this report. (It’s making a real difference in people’s lives.)

Before 2011, Medicare charged co-insurance or deductibles for a number of preventive services, like mammograms and colonoscopies, even though these are the kind of services that we should be encouraging people to get. Sometimes, supplemental insurance covered these services, but the cost of that coverage was passed on to consumers through higher premiums. As part of Obamacare, Medicare no longer charges for most preventive services, and last year, more than 25 million seniors and people with disabilities got at least one preventive service free of charge

So, other than being a nice bit of good news, why does this matter? Well, one crystal clear component of the Romney-Ryan health care plan is that they want to repeal Obamacare. How does that promise square with their assertion that no one at or near retirement would be affected by their plan? It just doesn’t. Under the Romney-Ryan plan, prescription drug and preventive care costs go up for people who have Medicare right now. Not in 10 years; not sometime in distant future. Right away. If you or your parents or grandparents have Medicare, or are counting on it in the next few years, that’s something you all should know.

Up next: Higher Medicare premiums and coinsurance