Commentary: Romney-Ryan plan would put Medicare into death spiral

Despite the comments in last Saturday’s Op-Ed article in The Palm Beach Post (“Romney-Ryan plan better deal for seniors,”) Republican vice-presidential nominee Paul Ryan cannot calm the fears of seniors and near retirees worried about his plan to convert Medicare into a voucher program by promising them that only those younger than 55 will be affected.

They rightfully don’t buy it.

Today, Medicare serves nearly 49 million Americans. If a health provider has power in numbers, Medicare is a force without peers, providing its beneficiaries the best in health care at a fraction of what most health insurers pay for the same service.

Starting in 2022, under the Ryan plan, that purchasing power would wane, as more and more Americans are moved into the voucher program instead of traditional Medicare. The Ryan plan, in other words, would put Medicare into what economists call “a death spiral” that would eventually leave the last lonely seniors in a program that would be a shell of the Medicare they once knew.

It’s not hard to understand. If 2021 is the last year that Americans enter into traditional Medicare, the number of seniors in the program will decrease until it ceases to exist.

Does Rep. Ryan really expect current seniors to believe that Americans benefiting from a Medicare program that serves 49 million people won’t be affected as the number of people in the program fades – and the infrastructure and purchasing power built to serve those people slowly disappears?

As the Brookings Institution’s Henry J. Aaron noted recently, the financing for traditional Medicare under the Ryan plan “would become progressively less adequate, throwing into doubt the very survival of the program.” South Florida would be especially hard hit under the Romney-Ryan scheme, because the voucher appears to be set so that it cannot cover the cost of the new Medicare-like option in high-cost areas.

All of Rep. Ryan’s comments ignore the problems to current seniors posed by the Ryan plan to make Medicaid a block grant to the states, which would jeopardize a program that is largely dedicated to helping older Americans afford nursing home care.

Then there are the ill effects on Americans already age 65 of repealing key provisions of ObamaCare, as advocated by Gov. Romney and Rep. Ryan. Prescription drug costs would soar as the “doughnut hole” – already substantially diminished and scheduled to close completely under the new health law – reopens under the Ryan plan. Rep. Ryan’s repeal would also charge seniors new co-payments for life-saving preventive benefits, while the free annual wellness visit would be eliminated. Any claims from the Republican duo that they would simply leave all the goodies of ObamaCare should only make you shake your head.

The Ryan Medicare plan should be considered for what it is: An enormous cost shift to seniors. Don’t take it from me. The official nonpartisan legislative scorekeeper – the Congressional Budget Office – estimates that it would leave Americans in the new voucher program paying thousands of dollars more in out-of-pocket costs than they would have under traditional Medicare.

And contrary to Rep. Ryan’s claims, the plan would do nothing to rein in overall health care costs. In fact, it would lead to a dramatic increase – 39 percent by 2022 alone – because private insurance is much more expensive than traditional Medicare.

Don’t be fooled by Rep. Ryan’s earnest appeals that the over-55 set have nothing to fear: Everyone should worry about what the Ryan plan would mean for his or her health care future. No one – except perhaps for those for whom money is no concern – would be held harmless by his voucher plan.

Sander Levin represents Michigan’s 12th congressional district and is the ranking Democrat on the Ways and Means Committee. He wrote this for The Palm Beach Post.