During the presidential campaign last year, Paul Ryan, the vice-presidential candidate, presented his plan for what we all know is much-needed Medicare reform (too many baby boomers; too little money). Under his plan, seniors would choose a “Medicare certified” private health insurance plan and, depending on the senior’s income, a percentage of the premium would be subsidized.
His plan sounds a lot like the new health insurance exchanges that are set to begin in 2014, doesn’t it?
Yesterday, an article on the National Review Online caught my attention because the author presented a compelling scenario by which the government could not only more easily implement Ryan’s plan, if it chose to do so, but also increase the eligibility age for Medicare from 65 to 69—or 70 or higher.
Obamacare’s insurance exchanges . . . use a premium-support system that is nearly identical to the one Paul Ryan proposes for Medicare . . . migrating seniors into Obamacare’s exchanges allows us to allocate scarce taxpayer resources to lower-income retirees, who truly need the help, and away from wealthy seniors, who do not.
I hoped the author was joking, but I understood his reasoning when he said it was an idea both Republicans, who back Ryan’s plan, and Democrats, who back Obamacare, could get behind. What if?
I already have serious concerns about the affordability of the emerging insurance exchanges. Using Kaiser’s handy premium calculator, I discover that a 64 year old with an annual income of $50,000 can expect to pay yearly premiums totaling $10,172! Ouch. That’s is slightly more than 20% of that person’s annual income—an income that is too high to be eligible for a federal subsidy.
The calculator does not go above age 64, but I would expect premiums for a 67 or 69 year old to be slightly higher. How can 20% of your income for premiums alone—not including deductibles, co-pays and co-insurance—be considered affordable? Most retirees are on a fixed income, as well.
While in theory adding more people to the exchange “pools” should lower premiums, adding seniors who are historically the largest consumers of health care will only increase overall health expenditures and therefore increase premiums for everyone. Also, without Medicare caps, health care costs for those seniors will be much higher.
I don’t know when and how Medicare will be reformed. I’m sure it will affect me, and I suspect it will involve more cost sharing, like we’ve seen with employer-based insurance, through higher premiums, deductibles and co-pays.
The ever increasing cost of health care worries me. What will the government consider “affordable” for a future retiree?
I used to see Medicare as a kind of insurance oasis where some of the weight of medical expenses would be eased. Now, however, unless more can be done to control out-of-control costs, health care will always be a heavy burden for American seniors.