Fox Claims Ryan's Medicare Plan Does Not Affect Current Seniors

Fox's Doocy: Ryan's Budget Plan “If You Have Medicare Right Now, Nothing Is Going To Change.” During the August 12 edition of Fox News' Fox & Friends, co-host Steve Doocy claimed that under Ryan's budget, “nothing is going to change” for seniors or people who are “55 and older.” [Fox News, Fox & Friends, 8/12/12]

In Fact, The Ryan Budget Would Raise Many Seniors' Prescription Drug Costs

The Medicare Prescription Drug Benefit Originally Contained A “Doughnut Hole” Requiring Seniors To Pay Thousands Of Dollars For Prescription Drugs. The Medicare Prescription Drug Benefit as passed in 2003 paid a percentage of prescription drug costs when seniors spent up to $750 per year on prescriptions. After that, it required seniors to pay the entire costs of their prescription drugs until they had spent a total of $3,600 per year. By 2009, seniors were required to pay more than $3,000 per year on prescription drugs. [Northwestern University, 2009]

The Affordable Care Act Closed The Prescription Drug Benefit “Doughnut Hole.” FactCheck.org reported that the Affordable Care Act closed the doughnut hole that required seniors to pay thousands out of pocket. From FactCheck.org:

The Democrats' bill also boosts certain benefits: It makes preventive care free and closes the “doughnut hole,” a current gap in prescription drug coverage for seniors. [FactCheck.org, 3/19/10]

But The Ryan Budget Would Re-Open The “Doughnut Hole,” Costing Seniors Billions. In a March 28 report, the Center on Budget and Policy Priorities (CBPP) found that the Ryan budget's repeal of health care reform's doughnut hole fix would “adversely affect current Medicare beneficiaries as well as those not yet eligible.” The report expanded on this finding, explaining:

Health reform has begun to close the doughnut hole -- the gap in Medicare prescription drug coverage that many seniors experienced once their annual drug costs exceeded $2,840.  Before health reform, seniors had no additional coverage until their costs hit $6,448.  Last year, seniors who were in the coverage gap received a 50-percent discount on brand-name drugs and a 7-percent discount on generic prescription drugs.  This year, the generic discount jumps to 14 percent.  Due to these improvements, five million Medicare beneficiaries have saved more than $3.2 billion, according to the Department of Health and Human Services (HHS).  Health reform will close the entire donut hole by 2020.  The Ryan budget would reopen it. [Center on Budget and Policy Priorities, 3/28/12]

National Journal: Ryan Budget Would “Reopen The Coverage Gap In Medicare's Prescription-Drug Benefit.” In a June 6, 2011, article the National Journal detailed the budget Ryan released in 2011, which like his current one, would repeal health care reforms doughnut hole fix. The National Journal found that Ryan's Budget

[...]would also repeal last year's health care law, which means reopening a coverage gap in Medicare's prescription-drug benefit that the statute closed. The gap, commonly called the “doughnut hole,” requires seniors to pay 100 percent of any prescription costs after the annual total reaches $2,840 and until it hits $4,550. Those who spend more or less have at least three-quarters of the costs covered. Under the 2010 health law, Medicare will pay 7 percent of the cost of generic drugs and 50 percent on name-brand pharmaceuticals; by 2020, the doughnut hole will be closed. [National Journal, 6/6/11]

The Centerpiece Of Ryan's Medicare Overhaul Would Drive Costs For Current Seniors

Ryan Has Claimed There Would Be “No Disruptions” In Medicare Program For People 55 And Over. Ryan's budget says that he would retain Medicare “with no disruptions for people in and near retirement,” but would give people under 55 a choice between receiving vouchers traditional Medicare and receiving vouchers to purchase private insurance.

On Medicare, Ryan originally proposed eliminating the traditional Medicare plan entirely and replacing it with a menu of private plans. He subsequently softened the proposal to include the traditional Medicare plan as one option on the menu, But either way, he would remake Medicare from a defined-benefit plan, in which seniors are simply guaranteed Medicare coverage, to a defined-contribution plan, in which they are given a voucher equal to the cost of the cheapest plans on the menu, and if they don't want those plans, they have to pay the difference. [The Washington Post, 8/11/12; Ryan's FY 2013 budget, 3/20/12]

JAMA: Had Ryan Medicare Plan Been Adopted In 2009 Seniors Would Have Been Forced To Pay Hundreds More For Medicare. The Journal of the American Medical Association (JAMA), in an August 1 report found that had Ryan's Medicare plan been implemented in 2009 seniors would've paid more for their coverage. From the report:

Nationally, in 2009, the benchmark plan under the Ryan-Wyden framework (ie, the second-lowest plan) bid an average of 9% below traditional Medicare costs (traditional Medicare was equivalent to approximately the tenth-lowest bid). Since traditional Medicare is simply another plan option under the Ryan-Wyden plan, a beneficiary in 2009 would have paid an average of $64 per month (9% of $717) in additional premiums to stay in traditional Medicare. Across the United States, 68% of traditional Medicare beneficiaries in 2009 (approximately 24 million beneficiaries) lived in counties in which traditional Medicare spending was greater than the second-least expensive plan and would have paid more to keep their choice of coverage (a share that would have been 81% in 2008, 75% in 2007, and 67% in 2006). Furthermore, more than 90% of MA beneficiaries (approximately 6.6 million seniors, excluding those dually eligible or in employer plans) would have also paid more for the plan they chose. [JAMA, 8/1/12]

And Ryan's Voucher System May Push All Seniors Off Traditional Medicare

CBPP: Ryan's Promise To Ensure “Traditional Medicare Remains An Option” Cannot Be Kept. Paul Van de Water, an economist and senior fellow at the Center for Budget and Policy Priorities, wrote that Congressman Paul Ryan's plans for Medicare in his latest budget could lead to traditional Medicare unraveling:

Chairman Ryan claims that his proposal “ensur[es] that traditional Medicare remains an option.” Unfortunately, that's not the case. Under premium support, traditional Medicare would tend to attract a less healthy pool of enrollees, while private plans would attract healthier enrollees (as occurs today with Medicare and private Medicare Advantage plans). Although the proposal calls for “risk adjusting” payments to health plans -- that is, adjusting them to reflect the average health status of their enrollees -- the risk adjustment process is highly imperfect and captures only part of the differences in costs across plans that stem from differences in the health of enrollees. 

Inadequate risk adjustment would mean that traditional Medicare would be only partially compensated for its higher-cost enrollees, which would force Medicare to raise beneficiary premiums to make up the difference. The higher premiums would lead more of Medicare's healthier enrollees to abandon it for private plans, very possibly setting off a spiral of rising premium costs and falling enrollment for traditional Medicare. Over time, traditional Medicare would become less financially viable and could unravel -- not because it was less efficient than the private plans, but because it was competing on an unlevel playing field in which private plans captured the healthier beneficiaries and incurred lower costs as a result. Ryan also would allow private plans to tailor their benefit packages to attract healthier beneficiaries and deter sicker ones, which only makes this outcome more likely. [Center on Budget and Policy Priorities, 3/28/12]

CBPP: Voucher Systems That Include Medicare Option Could “Threaten Traditional Medicare's Long-Term Viability.” In a report titled “Converting Medicare to Premium Support Would Likely Lead to Two-Tier Health Care System,” CBPP explained that “inadequate risk adjustment” could lead to healthier seniors abandoning traditional Medicare for private plans, leaving only the less healthy in the program which could “drive up its costs and threaten traditional Medicare's long-term viability.” [Center on Budget and Policy Priorities, 9/26/11]

And The Ryan Budget Would Sharply Cut Medicaid, Which Would Affect Millions Of Seniors

CBO: Ryan Budget Would Result In A “Substantial Cut” To Medicaid. In its March 2012 analysis of Ryan's budget, the Congressional Budget Office concluded that the “substantial cut” in the Federal funding of Medicaid, made manifest by block grants could result in “reduce access to care.” The CBO explained that the Ryan budget:

Would cause federal spending on Medicaid and CHIP to decline relatively to GDP in coming decades...

[...]

The implications of that substantial cut in spending relative to other policy scenarios would depend on both the specific policies that were implemented to generate the specified spending amount and the ways in which the nation's health care and health insurance systems, as well as state governments, reacted to those policies.

The response of the states would be of particular importance. If states were given additional flexibility to allocate federal funds for Medicaid and Chip according to their own priorities, they might be able to improve the efficiency of those programs in delivering health care to low-income populations. Nevertheless, even with significant efficiency gains, the magnitude of the reduction in spending relative to such spending in other scenarios means that states would need to increase their spending on these programs, make considerable cutbacks in them or both. Cutbacks might involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries -- all of which would reduce access to care. [CBO, March 2012]

CBPP: Ryan Budget Medicaid Block Grant “Would Cut Medicaid By One-Third By 2022.” In a March 27 report, the CBPP explained that the block grants proposed in Ryan's budget would “cut federal Medicaid funding by 34 percent by 2022.” This CBPP report concluded that

there can be no question that the block grant proposal would result in severe cuts in federal funding for state Medicaid programs.  To compensate for funding cuts of this magnitude, states would have little choice but to institute deep cuts to eligibility, benefit coverage and/or provider payment rates.  The almost inevitable result would be that millions more low-income individuals and families would end up uninsured or underinsured, with reduced access to needed medical care. [Center on Budget and Policy Priorities, 3/27/12]

CNN Money: Urban Institute Found Ryan Budget Would “Lead States To Drop Between 14 Million and 27 Million People From Medicaid.” In an August 13 article, CNN Money, citing the Urban Institute claimed the block grants called for in Ryan's budget would “lead states to drop between 14 million and 27 million people from Medicaid by 2021 and cut reimbursements to health care providers by 31%.” [CNN Money, 8/13/12]

NSCLC: Millions Of Seniors Use Medicaid. In an April 2011 report the National Senior Citizen Law Center stated:

Medicaid is not only a program for low-income older adults. It also provides middle class individuals who have impoverished themselves with long-term care benefits. Medicaid provides financing for long term care in nursing homes for some 1.3 million people aged 65 and over and long term services and supports for 4.8 million in the community. The nearly 9 million people 65 and over (and countless families) it helps range from those living at or close to the federal poverty level to those in the middle class. [NSCLC, April 2011]

CMS: 17 Percent Of All Enrollees In Medicaid Are Seniors. On its Medicaid website, the Center for Medicare & Medicaid Services explains that millions of Seniors are enrolled in Medicaid. From the website:

Medicaid provides health coverage to more than 4.6 million low-income seniors, nearly all of whom are also enrolled in Medicare. Medicaid also provides coverage to 3.7 million people with disabilities who are enrolled in Medicare. In total, 8.3 million people are “dually eligible” and enrolled in both Medicaid and Medicare, composing more than 17% of all Medicaid enrollees. Individuals who are enrolled in both Medicaid and Medicare, by federal statute, can be covered for both optional and mandatory categories. [Medicaid.gov, accessed 8/13/12]