Medicare Under Threat: Health Reform Versus the Ryan Budget

Current Health care reform (ACA)

House Republican 2013 Budget Plan

repeal of health care reform

Medicare's Guaranteed Benefits

"Nothing in the provisions of, or amendments made by, this Act shall result in a reduction of guaranteed benefits under title XVIII of the Social Security Act [the Medicare title]" Additionally, "Nothing in this Act shall result in the reduction or elimination of any benefits guaranteed by law to participants in Medicare Advantage plans."[7]

Starting in 2023, replaces Medicare's guarantee of coverage with a flat payment (voucher) given to beneficiaries to purchase either private insurance or traditional Medicare.  Beneficiaries would have to pay the difference between the coverage they need and the voucher's worth.

Increases the vulnerability of the Medicare Trust Fund, leading to a corresponding threat to beneficiaries' guaranteed benefits.

Medicare Eligibility

Medicare eligibility is not changed.  Most people are eligible at age 65.

Between 2023 and 2034, the age of eligibility would rise from 65 to 67.  At the same time, it would repeal ACA which →

If Health Care Reform is repealed and the age of eligibility is increased, many people age 65 and 66 would be uninsured.[8]

Medicare Cost-Sharing

Reduces cost-sharing by:

1) Eliminating co-insurance and deductibles for most preventive services;

2) Closing the Part D prescription drug Donut Hole; and

3) Prohibiting Medicare Advantage plans from charging more than traditional Medicare for costly services.[9]

Since the capped growth rate of spending per beneficiary staring in 2023 will likely be less than the growth of actual health care costs, vouchers would purchase less coverage each year, pushing more costs onto beneficiaries.  For example, federal spending on behalf of an average new beneficiary would be up to 42% less in 2050 than under current law.[10] Also, by repealing ACA →

Reinstatescost-sharing for preventive services and reopens the "Donut Hole," ensuring higher out-of-pocket costs. 

Medicare Premiums

Freezes the income level at which beneficiaries with higher incomes pay more for Part B through 2019; requires beneficiaries with higher incomes to pay more for Part D.[11]

Provides voucher to either pay or offset premium of plan chosen by individual (as noted above, voucher amount not expected to keep up with growth in health care costs). Freezes income-related premium thresholds until 25% of Medicare beneficiaries are subject to the increased premium.[12]

Rescinds freeze on income levels for increased premiums.

Fraud, Waste, and Abuse

Targets fraud, waste, and abuse in Medicare by:

1) Eliminating overpayments to Medicare Advantage plans.[13]

2) Implementing stricter screening procedures and billing procedures on Medicare providers and suppliers;

3) Appropriating additional funds[14]

(Unclear)

Eliminates programs that target fraud and abuse, and reinstates wasteful Medicare Advantage overpayments.[15]

Coordination of Care and Improved Quality

Adds specific programs to improve quality of care.  For example: payment reforms; auditing unnecessary hospital admissions and hospital acquired conditions; promoting programs to improve care coordination, particularly for beneficiaries with complex health conditions; improving quality measures and quality reporting.[16]

Unclear; according to the proposal, the cap on growth rate in Medicare spending is intended to "foster the proper incentives for providers and plans to develop more efficient methods of quality care delivery"[17]

Eliminates programs that seek to coordinate care and improve quality for beneficiaries.

Promotion of Health Care Delivery System Reforms

Creates the Center for Medicare & Medicaid Innovations (CMMI) to promote delivery systems that improve care and reduce costs, creates Medical Home and Accountable Care Organization models to improve care for people with multiple chronic conditions.[18]

Unclear, however would repeal ACA which →

Eliminates authority and funding for delivery system innovations, including for CMMI, thereby eliminating opportunities to find solutions to the growth in health care costs.

Protection for People Dually Eligible for Medicare and Medicaid (Dual Eligibles)

Creates the Medicare-Medicaid Coordination Office (MMCO) to improve access to care for dual eligibles;[19] improves access to benchmark Part D drug plans for people eligible for the Part D low-income subsidy.[20]

Dual eligibles would apparently no longer be eligible for supplemental benefits not covered through Medicare.[21]  Turns Medicaid into a block grant program, likely leading to no or less assistance to people with limited incomes and resources, including people who need long-term care.[22] Under the plan, Medicaid would be cut by one-third by 2022 and further after that.[23]

Reverses the creation of critical initiatives to improve access and navigation through the health system for vulnerable dual eligibles.

Deficit Reduction

Reducesdeficit by $1.2 trillion over twenty years. [24]

Projects an estimated $205 billion in Medicare savings over President's budget over ten years.[25]  Notes that "[h]arnessing the power of choice and competition helps tackle the root drivers of health inflation;" (which has not worked with Medicare Advantage plans) and seeks to achieve savings by capping non-economic damages in medical liability lawsuits.[26]

Adds$230 billion to the deficit[27]

Medicare Solvency

Extends Medicare Part A Trust Fund solvency by 12 years to 2029. [28]

Unclear.  "Medicare will be able to deliver on its critical mission to seniors today and future generations."[29]    

Eliminates cost-savings, including development of new delivery systems, that promote Part A Trust Fund solvency.