Here's how Krugman explains it:

Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance -- higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn't afford a policy adequate for your needs, even with the voucher, that would be your problem.

And most seniors wouldn't be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved.






n Response to Re: Here's Your Method of Cuts to Medicare:

In Response to RETURN OF THE BIG GOP MEDICARE LIE : We see where you get your info.  Don't let yourself be lead blindly down a road by government. There is a bit more to it than what motherjones has described.  If you don't see how this Medicare reduction will hurt beneficiaries, then I feel for you.  They left out a good bit. My info is taken from the PPACA Summary as presented by the Kaiser Family Foundation - a non-profit, private operating foundation focusing on the major health care issues facing the U.S., as well as the U.S. role in global health policy. 1.  Medicare Advantage plans were added because they provided many seniors with care that they needed which Traditional Medicare did not cover - eye glasses, hearing aids.  They also provided beneficiaries in certain geographical areas access to closer by medical professionals and facilities.  Some also covered their enrolled seniors with no monthly premiums but with a schedule of co-pays, thus making it possible for these seniors to have more control of their pocket book.  Some also included their medication coverage, helping these seniors even more in the cost area. There will not be an across the board cut for all of these plans, in fact some will get bonuses tied to quality care and saving money.  So just as in the rest of Obamacare, MA (private insurance) will play a big part in watching the cost of care as dictated by HHS.  Some MA plans will go, some already have but hopefully those beneficiaries that relied upon them as a better alternative for them than Traditional Medicare will have their needs met with those that remain in the marketplace. 2. Other Reductions in payments to providers:  Reduce annual market basket updates for inpatient hospital, home health, skilled nursing facility, hospice and other Medicare providers, and adjust for productivity. (Effective dates vary) Reduce Medicare Disproportionate Share Hospital (DSH) payments initially by 75% and subsequently increase payments based on the percent of the population uninsured and the amount of uncompensated care provided (Effective fiscal year 2014)  Eliminate the Medicare Improvement Fund. (Effective upon enactment Reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable) hospital readmissions. (Effective October 1, 2012) Reduce Medicare payments to certain hospitals for hospital-acquired conditions by 1%. (Effective fiscal year 2015) To me, these are cuts and who knows whether or not they are going to affect care or can even be controlled to a certain extent by the hospital.  To me, medical treatment is a very individualized and complex science of which cost is a great decision maker in types of treatments. 3.  Establishment of these experimental type treatment conglomerates and a board that has, what seems to be, power to do only one thing and that is more cuts to providers.   Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. To qualify as an ACO, organizations must agree to be accountable for the overall care of their Medicare beneficiaries, have adequate participation of primary care physicians, define processes to promote evidence-basedmedicine, report on quality and costs, and coordinate care. (Shared savings program established January 1, 2012) Create an Innovation Center within the Centers for Medicare and Medicaid Services to test, evaluate, and expand in Medicare, Medicaid, and CHIP different payment structures and methodologies to reduce program expenditures while maintaining or improving quality of care. Payment reform models that improve quality and reduce the rate of cost growth could be expanded throughout the Medicare, Medicaid, and CHIP programs. (Effective January 1, 2011) Establish an Independent Payment Advisory Board comprised of 15 members to submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds a target growth rate. Beginning April 2013, require the Chief Actuary of CMS to project whether Medicare per capita spending exceeds the average of CPI-U and CPI-M, based on a five year period ending that year. If so, beginning January 15, 2014, the Board will submit recommendations to achieve reductions in Medicare spending. Beginning January 2018, the target is modified such that the board submits recommendations if Medicare per capita spending exceeds GDP per capita plus one percent. The Board will submit proposals to the President and Congress for immediate consideration. The Board is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing (including Parts A and B premiums), or would result in a change in the beneficiary premium percentage or low-income subsidies under Part D. Hospitals and hospices (through 2019) and clinical labs (for one year) will not be subject to cost reductions proposed by the Board. The Board must also submit recommendations every other year to slow the growth in national health expenditures while preserving quality of care by January 1, 2015. I don't know about you but all I see is MORE government getting in the way of my health care with my doctor.  HHS and CMS has a lot of power in the rules that they make for the Medicare program - these rules are then filtered on into the private market place of insurance. You go right ahead and believe that they can take $ 500 billiion from a program that is already in the red (part A - hospital insurance) without feeling a thing - and I have a bridge to sell you in the desert. I do wish Medicare was a program where they could just help us buy the coverage that we need as INDIVIDUALS while leaving those that are pleased with the current Traditional program in place.  The health care of seniors is very individualized based on their needs - but government will make this into "mass" medicine.  We pick out Medicare D based on our needs & pocket book, we pick our medigap or Medicare Advantage plans based on our needs & pocket book - time to start letting us pick the rest too.
Posted by GailL1