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Tuesday, October 16, 2012

Part 5: An unstable Medicare and losing your doctor

Marc Steinberg

Deputy Director of Health Policy

What Governor Romney Doesn’t Want People Over 55 to Hear About His Medicare Plan

Part 5: An unstable Medicare and losing your doctor

We’ve looked at four different ways that, no matter what Governor Romney and Congressman Ryan say, their Medicare plan hurts people who currently have Medicare and those who will have it in the near future. We’ve talked about prescription drugs and preventive care costs; Medicare premiums and co-insurance ; Medicaid ; and the health of the Medicare trust fund. Now, let’s look at what will happen to the Medicare program we have now if the Romney-Ryan plan were implemented.

At its core, the Romney-Ryan plan is a radical change to the Medicare system. Essentially, they would end the Medicare program as we know it. People born after 1957 would no longer be able to join the Medicare system we have today. Instead, they’d get a voucher to purchase insurance from private insurance companies or traditional Medicare. Because that voucher would be inadequate to cover the costs of insurance, out-of-pocket costs would rise dramatically for everyone 55 and younger, and insurance companies would call the shots.

But what happens to everyone born before 1958, who would remain in the old system? First off, they’d face higher premiums. Why? Because the old system they remain in will be serving an increasingly older and sicker population. Private insurance companies are very good at attracting younger, healthier people by offering things like gym memberships and free basic office visits, and discouraging older, sicker enrollees by charging more for costly things sick people need, such as chemotherapy. Under the Romney-Ryan plan, they would be allowed to do that. As a result, the private plans will pick off the healthier new people, while older, sicker people stay with traditional Medicare.  

But no insurer can survive for long covering an increasingly older, sicker population without jacking up premiums. Medicare, like all insurance, needs a mix of younger and healthier as well as older and sicker people in its insurance pool in order to function. But the Romney-Ryan plan ensures that the Medicare that today’s beneficiaries and near-retirees rely on will become more and more costly and less and less sustainable. If you’re 60 or so today, that really matters to you. Once their plan takes full effect in 10 years, you’ll be 70 and facing a deteriorating Medicare program for the rest of your life.

The second big problem for people left in the old system has to do with keeping their doctor. Today, Medicare offers unparalleled access to physicians. Yes, there are some problems in certain parts of the country, but generally people with Medicare have as good or better access to doctors than people with private insurance. Medicare provides this good access in large part because it has market power—doctors accept Medicare because so many of their patients are covered by it. Under the Romney-Ryan plan, traditional Medicare will cover fewer and fewer people over time, meaning doctors will be less and less inclined to take Medicare. And if you decide to switch to a private plan, as the Romney-Ryan plan envisions, that means you’re at the mercy of insurance companies that get to decide what doctors you get to see. Either way, you have less control over your health care. That’s not a message that supporters of the Romney-Ryan plan want you to hear, but it’s the truth.