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Tuesday, November 15, 2016

Paul Ryan's Plan to Gut Medicare

Now that we have Republican majorities in both the House of Representatives and the Senate, and a Republican president-elect who seems likely to sign almost any domestic policy bill that Congress sends him, it’s worthwhile to look at what Paul Ryan wants to do with Medicare.  This ( and this ( are starting places.

More to the point, I thing, is this:  Medicare is explicitly an inter-generational social compact.  From the beginning, it has promised that if we support—by paying a Medicare tax as a part of our Social Security taxes—health care for our elders, the next generations will do the same for us.  And that is exactly how it has worked for 60 years.  My taxes paid to support Medicare benefits not only for my parents, but for everyone who became Medicare eligible between the mid-1970s and 2012.  People working today are paying Medicare taxes to support my health care (and those who will, I hope, follow after me).

What Paul Ryan proposes to do is to break that social compact.  He seeks to raise the age of eligibility to about 67, which will cause serious problems for people who have pre-existing chronic conditions, or who have worked for years in physically demanding jobs (coal mining, steel mills, nursing homes, and a multitude of others).  He seeks to make Medicare mostly into a private insurance scheme, run by for-profit insurance companies.  What I have been able to find does not make clear whether those policies will require coverage for pre-existing conditions, whether companies will be required to issue such policies.  It is clear, though, that participation by seniors will be voluntary.  So we run, once again, into the problem know as adverse selection.

Seniors with few (initial) health problems may have the option of not participating, leaving insurers with a less healthy, and probably an older, base of insured.  This will cause premiums to rise.  And the premium subsidies Ryan’s plan appears to offer are capped, and capped at a level well below what the premiums are likely to be.  Older, poorer, and sicker seniors will pay for this, with less access to health care, with a lower overall standard of living if they do buy private health insurance, and with almost a certainty of shorter lives.

If you are rich, no problem.  If you are not, this is a major problem.  It’s a big enough problem that I might be forced to join AARP—if that organization is opposing Ryan’s plan.


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