With Republicans in control of what's happening in Washington, some of the long-simmering plans to dramatically remake Medicare are getting a revival.
Though the Trump administration is sticking with the campaign promise not to meddle with this popular program, some leaders on Capitol Hill are pushing for a plan to privatize it. They're proposing a voucher system — they call it "premium support" — in which the federal government would provide a fixed sum of money to buy health insurance.
As the debate gets started, here are some of the things you may be hearing — and what the real facts are about them.
Claim: Current and near retirees will not be affected.
Fact check: Current and near retirees could certainly suffer side effects if Medicare is overhauled (more on that later), but it's true that the most dramatic changes will likely be felt by people under age 55. The most popular proposal making the rounds on Capitol Hill (the so-called "A Better Way" plan) wouldn't go into effect until 2024.
If you're in the younger group, the government would make a payment on your behalf to buy insurance through a private company or traditional Medicare. This payment — in the form of a voucher — may not be enough to cover the full cost of insurance. If it isn't enough, your premiums would be the difference in the amount of the voucher and the cost of insurance.
Another major change if you're younger than 55: The age of Medicare eligibility may gradually rise from 65 to 67. If you lose your employer coverage before then, you will have to buy a policy on the individual insurance market, where premiums for older consumers aren't cheap. One government analysis predicted that many people that age won't be able to afford insurance and will go without.
Claim: Medicare costs will not go up.
Fact check: In truth, future — and current — beneficiaries could see their costs rise. After all, the reason lawmakers want to revamp Medicare is to cut federal spending.
A Medicare overhaul would create two systems: one for everyone under age 55 and the other for everybody older who would continue to receive benefits under today's programs.
Current beneficiaries, though, could see Part B premiums for doctors' visits rise faster after the new system is in place. That's because younger and healthier beneficiaries — who are less costly to insurers — would be enrolled in the new program. Over time, all those in the current system would be older — and presumably less healthy — and the higher cost of their care would be spread among this pool, forcing premiums to jump.
Meanwhile, how much money future enrollees would receive from Uncle Sam to buy insurance hasn't been determined. The Congressional Budget Office analyzed two proposed ways to calculate the size of vouchers. It concluded that under both methods, people who want to stay in traditional Medicare will have to pay more than they do now. And unlike today, where everyone pays the same amount in traditional Medicare, under a voucher system, the amount beneficiaries pay would vary depending on where you live.
Also, vouchers would be adjusted yearly — perhaps by the rate of general inflation. But given that health care costs rise faster than that, you could end up paying even more for coverage over time.
Claim: We need to modernize the system.
Fact check: Proponents of the voucher system are using the term "modernize," but make no mistake, the system will be drastically changed.
Today's beneficiaries receive a guaranteed level of coverage — whether they're in traditional Medicare or a private Medicare Advantage plan. That's not the case with the new proposals (though as of yet, many of these are short of specifics).
Claim: The new system would offer consumers more choice.
Fact check: Beneficiaries might actually end up with fewer choices or less freedom to choose their doctors.
Some versions of a new system would give plans more flexibility to customize benefits for their enrollees. This could lead some plans to design benefits that attract healthier, less-expensive participants while leaving sicker and costlier retirees with fewer plan choices. Other versions seem to allow insurance companies more control over what doctors you see and how you would use your benefits.
Claim: We need to do this: Medicare is going broke.
Fact check: Medicare has some financial challenges as the population ages and health costs increase. But it's not going bankrupt.
The program has enough money coming in from payroll taxes and other sources to fully pay hospital insurance costs until 2028, according to the latest Medicare Trustees report. And even after that, incoming revenue would be enough to cover 87 percent of these costs in 2028, gradually decreasing to 79 percent in 2040.
Rather than building a new system, other steps can be taken to shore up Medicare's long-term finances, including preventing waste and fraud and reining in the cost of ever-rising prescription drugs.
Discounts & Benefits
Next ArticleRead This