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Recent Newspaper & Online Columns by Kate Scannell MD

The Ryan plan for Medicare -- One giant wrecking ball

Dr. Kate Scannell, Syndicated Columnist
First Published in Print: 04/30/2011

AS A physician specializing for years in geriatric medicine, I was delighted to learn about Republican Rep. Paul Ryan's plan to dismantle Medicare and replace it with good old-fashioned, coupon-clipping, private-marketplace opportunities for elderly and disabled people seeking health insurance.

It was a brilliant idea. We all know how fun it is to comparison shop for health insurance policies in the first place. But also incorporating the prospect of applying coupons or "vouchers" to insurance purchases -- well, it sounded like a shopper's paradise for the Medicare crowd.

Besides, as a matter of principle, shouldn't the elderly and disabled be freed -- yes, freed! -- from Medicare to pursue opportunities to shop for private insurance, just like more able-bodied, freedom-loving Americans? As a matter of personal liberty, shouldn't they be allowed as many mind-boggling consumer "options" for policies?
Sure, the disabled and elderly may collectively suffer more physical, mental, financial and social limitations in multiple arenas of life -- but the Ryan plan offers them a rare taste of unfettered freedom in the private insurance marketplace.

OK, wait -- I can't satirize the Ryan plan anymore. What it threatens to do to Medicare is entirely too serious and disturbing.

This month, the Republican-led House voted to approve a fiscal plan drafted by Ryan that purports to decrease federal spending and ease the national debt. In a nutshell -- where the Ryan plan rightly belongs -- the proposal would save money by eliminating Medicare, the government-funded health insurance program for 45 million disabled and elderly Americans.

Ryan's plan also aims the wrecking ball at Medicaid -- the health insurance program for our nation's poor (more on this at a later date). Meanwhile, his plan would cut the top corporate and personal income tax rates for the wealthy in America, and it would funnel government money into the pockets of the private insurance industry.

In essence, the Ryan plan subsidizes a tax cut for the wealthy on the backs of the elderly, disabled, and poor. It provides hefty government subsidies to one of our country's largest entitlement programs -- the private insurance industry -- at the expense of taxpayers who, by all surveys, want Medicare to survive.

No wonder Lady Justice does not remove her blindfold, some news is too disturbing for anyone to witness.
Almost no one doubts that our country needs to reduce its deficit spending. But the Ryan plan -- clearly penalizing vulnerable people whose health care needs did not cause the operative financial crisis -- is no way to do that.

Here's how the Ryan proposal would "work." In a blatant flip-flop — and contrary to their strident 2010 campaign rhetoric accusing Democrats of destroying Medicare -- the Republican plan this year would simply obliterate Medicare. Poof! Gone!

Instead, Ryan proposes to give "premium support payments" to people turning 65 in 2022 to offset costs for purchases of private insurance policies.

Without the Medicare option, people will be forced to buy private policies and pay greater out-of-pocket expenses for the privilege. You can't put enough lipstick on this plan and still call it Medicare.

Beneficiaries enrolled in these private plans would have to pay all costs for premiums and care in excess of the fed's "premium support payment" to insurance companies. For example, the nonpartisan Congressional Budget Office (CBO) estimates that the total cost to provide health care benefits in 2022 for a typical 65-year-old enrollee would run about $20,500. Under the Ryan plan, the federal government would offset that cost by $8,000 -- or 39 percent -- and the enrollee would be responsible for the remaining $12,500. It should be duly noted that this out-of-pocket expense would consume nearly half of the Social Security income for an average-earning person.

So, yes, the Ryan plan saves the government several thousands of dollars on each patient it excludes from Medicare -- but the cost is merely shifted to the elderly or disabled private insurance recipient. At the same time, the plan sneaks in an economic diversion of Social Security assets -- forcing them out of peoples' pockets and into the much deeper pockets of the insurance industry.

It is further disingenuous to valorize the plan's purported "cost-saving" when an enrollee's out-of-pocket expenses are likely to be twice as large under the Ryan proposal compared to traditional Medicare. That's because, as determined by the CBO, the cost to provide health benefits is so much greater under private plans than traditional Medicare -- a difference expected to measure 34 percent by 2022.

In other words, the Ryan plan does absolutely nothing to address the real problem -- the oppressive costs of health care and insurance coverage that have skyrocketed for decades in our free-market economy. In fact, by forcing people out of Medicare and into more expensive private policies, the Ryan plan actually escalates health care costs.

The consumer merely picks up the ever-expanding tab in excess of the government's "premium support" subsidy.
What's more, if the individual insurance mandate is implemented in 2014 -- per last year's health care reform act -- elderly and disabled people who would have been covered under Medicare will be charged fines if they don't purchase these private insurance policies. Since when did our government become a bridge troll for the insurance industry?

Even if all the moral arguments against the Ryan plan are silenced, the economic ones ought to be audible above the loud cheering from the insurance industry.
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Copyright 2011, Kate Scannell