House Speaker Paul Ryan’s proposed blueprint for health reform would make major changes in medical care for seniors, raising out-of-pocket costs for some and shifting others from traditional Medicare coverage to commercial insurance.
His plan, called A Better Way, would slowly raise the age of eligibility for Medicare and cap federal spending for the program, increasing subsidies for low-income seniors but raising out-of-pocket costs for higher-income retirees. It would make Medicare Advantage managed care plans more attractive. And, in a significant omission, it barely acknowledges the importance of long-term supports and services for older adults and younger people with disabilities and suggests few ways to improve such care.
Ryan’s health plan is one piece of a multi-part package of policy reforms that he hopes House Republicans can campaign on in November. Some proposals dovetail with the party’s presumptive presidential nominee Donald Trump, while others may conflict with his ideas.
Here are five key ways the Ryan proposal would affect seniors:
Medicare eligibility age: Ryan would gradually increase the eligibility age for Medicare from 65 to nearly 67 starting in 2020. That would require those 65 to 67 to purchase commercial insurance. Like other consumers, they’d receive new tax credits to help subsidize the cost, though the blueprint does not specify the size of those credits. In addition, the proposal would allow insurers to charge relatively higher premiums to older consumers than they can under the Affordable Care Act.
Medicare Premium Support: As he has proposed many times in the past, Ryan is backing a plan that would effectively provide a fixed dollar subsidy that seniors would use to purchase Medicare insurance. That’s in contrast to today’s model, where Medicare pays a percentage of the cost, whatever it is. Such a plan would effectively shift the risk of health care cost increases from taxpayer to seniors. The idea has some bipartisan support, but the details matter. The biggest: How would the subsidy be calculated and by how much would it increase each year. The blueprint released today was largely silent on those issues.
Medicare Advantage: These privately-run managed care plans initially received generous subsidies that have been scaled back by the Obama Administration. Still, about one-third of new Medicare enrollees are choosing MA plans rather than traditional fee-for-service coverage. Ryan would increase those subsidies and allow MA plans to create their own packages of services and benefits instead of offering identical coverages.
Medigap: Tapping another idea with some bipartisan support, Ryan would limit the ability of Medicare Supplement (Medigap) plans to offer first-dollar insurance coverage. The idea: If consumers must pay some costs out-of-pocket, they’ll be more careful buyers of care.
LTSS: Perhaps the most disappointing piece of the Ryan plan is what it did not discuss. While the report acknowledges the high cost of Medicaid’s long-term care benefits, it says little about what it would do about it. In general, the plan would cap the federal contribution to the joint state/federal program, and give states more flexibility in how they’d design Medicaid benefits. But the report says little about how those changes would apply to seniors or young people with disabilities, and a cap could put some Medicaid LTSS programs at risk. The blueprint says nothing about new mechanisms to finance long-term care outside of Medicaid.
Ryan’s proposal is mostly a collection of old GOP ideas that have gone nowhere. Whether is gives Republican candidates a talking point beyond “repeal Obamacare” remains to be seen. But it is little more than a starting point for negotiations should lawmakers want to talk about ways to improve the Affordable Care Act in 2017.
Ryan’s proposal is based upon the sad reality that the present government-funded model we have under Medicare and Medicaid is financially unsustainable. That is something most NAELA members fail to consider. His proposal appears to be an effort to shift toward a private-funded health care system and to decentralize LTSS to the states, with block grant funding from the federal government. I agree with that approach. We elder law attorneys need to be ready to adapt our practices to the coming changes.