The numbers behind our Medicare problems.

[dkf]

Here's a brief overview of how Medicare currently works: On average, the annual cost for its 46 million enrollees is roughly $13,000. The recipients pay total premiums of $1,326 a year for hospital visits and zero for physician services, and can purchase supplementary private Medigap policies that cover virtually all deductibles and co-pays for another $1,500 a year. So the enrollees pay a total of around $3,000, or 23% of the total $13,000 cost. Taxpayers cover the balance of $10,000.

For future retirees and budget-watchers, what matters most is how fast that $13,000 cost number rises, compared with the increase in the $10,000 that the government now pays. Ryan has a solution to the former. The latter is far harder to forecast. The gap between the two will grow, and chart what future retirees will need to pay for their own health care.

For many years, Medicare costs have been growing at between 2 and 2.5 percentage points faster than GDP, a ruinous, unsustainable rate. Even in today's weak economy, the total Medicare bill is waxing at over 7% (of GDP)

According to the Congressional Budget Office's analysis, issued on April 5th, the Ryan plan would totally reverse the course of recent fiscal history by lowering federal health care spending from 8% of GDP today to just 5% by 2050. If we remain on the current course, the spending would jump to 14% in that time frame.


http://finance.fortune.cnn.com/2011/04/07/in-defense-of-paul-ryans-medicare-plan/

[lumberjack_jeff]

1. How about we let everyone buy medicare, even the young and healthy.

We could call it the public option.

[NNN0LHI]

4. Actually that came up during the HCR battle. I believe Dennis Kucinich proposed it?

I can remember him on TV discussing it anyway.

When it was first proposed everyone was like "Yea, buddy, it sounds great to me!"

Then I think the next day the numbers came out and we discovered that Medicare would cost somewhere between $600 and $800 per month per person depending on the state and the excitement was gone.

Anyone else recall that?

Don

[ejpoeta]

8. i know that at my husband's old job five yers ago his insurance

which covered nothing was $600/mo. and at his current job for two of us it was $200 every two weeks with a deductible of $2500 and then the 80/20 would kick in. I bet there are a lot of people who would LOVE to have a $600/mo plan with a straight 80/20 shot.

[NNN0LHI]

9. Did you miss the "between $600 and $800 per month per person" part?

For two people it would be $1200 to $1600 per month depending on your state.

Would you love to pay that?

Don

[ejpoeta]

13. i think that is bogus. we are already paying towards medicare aren't we?

[NNN0LHI]

14. OK its bogus then

I was lying.

Forget it.

Don

[DURHAM D]

2. Bull shit article - It totally ignores the tens of thousands of dollars

medicare enrollees paid-in during their 40+ years of payroll deductions.

This is rightwing spin. Are you a Republican?

[crazylikafox]

5. Exactly. It's an insurance policy & they "forgot" to include the prior years of premiums

[Chris_Texas]

11. That money is gone within a year or two, or the first illness or injury

Which ever comes first.

The Ryan plan is insane obviously. But don't try and play it off like this crisis is a surprise or that boomers did not knowingly underfund their own benefits knowing that they would pass the costs along to their kids and grandkids.

[Cassandra]

12. BS. Boomers did not knowingly underfund.

When my dad had heart surgery in 1975, the cost of a private room in one of the best hospitals in NYC was $35 a night. Are the boomers supposed to have known that costs would go up so dramatically or that new and expensive cures would be developed.

[DURHAM D]

15. Texas C seems to think boomers actually

were all seated members of congress and voted on the legislation.

[TreasonousBastard]

19. No it doesn't. It clearly states that 10 grand a year is paid by...

"taxpayers."

That someone may have paid in for years while working is irrelevant-- it's not a savings plan but a pay-as-you-go plan that current taxpayers are subsidizing.

[TBF]

21. Your comment still ignores all the money paid in by taxpayers -

why not admit that you've spent it all on defense?

[dkf]

22. It's actuarially underfunded.

[TBF]

24. The actuaries can shove it -

people know darned well they've paid in all these years and *poof* money is "underfunded"? More like misappropriated.

[rfranklin]

3. There are two problems which barely get mentioned...

First, we have one of the lowest tax burdens among OECD countries. The Republicans have managed to sell their anti-tax propaganda and make people who would benefit from higher taxes think they are overtaxed. Of course, what really needs to be done is to reinstate higher taxes on the wealthiest. Otherwise we are headed permanently for Third World division of wealth. (And we are there now despite what a large percentage of the population thinks.)

Second, there are pathetically poor results for the high cost of health care in the USA. We are not number one in heatlh care or anywhere near it. If the ridiculous inflated costs of health care were addressed and we emulated the best aspects of heatlh care in other developed countries we would have no Medicare problem.

[ejpoeta]

6. the problem with medicare is that the only people allowed in the program are

old people. when you have a pool of only people who are more likely to need to use the program, you are going to have a problem. the purpose of a pool is to spread out the risk, so you would be better served to have a pool that was spread out among young and old alike. healthy and sick. as it stands now, the healthy are all in private plans where they pay private insurers and don't use it but once a year or maybe if they get the flu. This is why single payer would be preferable, but at least if we had a public option, medicare buy in you would have healthy people who could buy into medicare and that pool that sits there would help all those old people who need to use it while the healthy people don't.

[Chris_Texas]

10. Not exactly. Everyone is paying in, but only a few can take any out

The Ryan plan basically says that everyone will continue to pay in, but those under 55 will no longer be able to collect -- they will get a capped voucher they can use to help pay for private insurance while being forced to make up the difference themselves.

[bobbolink]

16. Excellent point. The further problem is that so few actually understand this.

Time for billboards, full-page ads, etc.

[OKNancy]

7. yeah, well the article is defending the plan, and after reading it

it's obvious a lot has been left out.

With Medicare as it is now, it's a pretty level playing field. Consumers are supposed to shop for the best plan.
If they can't afford a low deductible plan, then tough... you get the Model-T plan and the richer folks can pay for the Cadillac plans.
No mention of what happens to those the insurance companies will NOT cover.

More out of pocket expenses for everyone is a TAX. Not in name, but it is essentially the "Ryan tax".

[dkf]

23. Well from a cost containment side it makes sense.

But it doesn't do much to provide benefits.

I could care less about the Ryan plan though. What I want to know is how we solve the numbers problem.

[cbdo2007]

17. It's already been proven with BA+ that the "market" actually increases Medicare costs.

That is why the Affordable Care Act (or whatever it's called) got rid of BA+ is because it costs the govt 13% more to administer these plans than normal Medicare run by the Govt.

[oldlib]

18. Medicare Payments.

My wife and I are retired and on Social Security. SS deducts $96.50 from each of our monthly checks. This means that we pay $2,316 a year for Medicare. This doesn't include the doctor visit co-pay, laboratory and the cost of medication. Medicare isn't free and it isn't a drain on the Federal government.

[TreasonousBastard]

20. Ryan's plan is an attempt to reduce increased medical costs by...

introducing "competition" but everyone knows there's no such thing as competition when looking for medical care.

Yes, you might find a cheap walk-in clinic for some things, but if you have cancer, heart trouble, diabetes complications, or any one of a large number of other things you're at the mercy of the market-- the market is not at the mercy of you.