Are Seniors Paying Attention to Paul Ryan's Medicare Plan?

Americans were misled by insurance industry rhetoric about health reform Tea Party members who railed against health care reform because of the spin they were sold about how "Obamacare" would affect Medicare played a big role in returning the House of Representatives to Republican control.

I'm betting that many of them, if they're paying attention to what Rep. Paul Ryan (R-Wisconsin) wants to do to the Medicare program, are having some serious buyer's remorse. If Democrats are wise, they're already drafting a strategy to remind Medicare beneficiaries, including card-carrying Tea Party members, just how fooled they were into thinking that Republicans were the protectors of the government-run program they hold so dear.

As a speaker at an especially contentious town hall meeting during the summer of 2009, I saw firsthand just how many senior citizens were snookered about how reform legislation would alter Medicare. Shortly after I testified before Congress about how the insurance industry was conducting a behind-the-scenes campaign to influence public opinion about reform, Rep. Bill Pascrell (D-New Jersey) invited me to share my perspective as a former insurance industry insider at his September 3, 2009, town hall meeting at Montclair State University.

More than 1,000 people had crammed into the school's auditorium, not so much to hear the speakers as to express their opinions. Reform opponents were on one side of the auditorium, and reform advocates were on the other side. I had to shout just to be heard above the insults the groups were hurling at each other. Many of the reform opponents were carrying signs that read, "Hands Off My Medicare!" They clearly had bought the lie that the Democrats planned to dismantle the program.

There was no doubt in my mind that the insurance industry was the original source of that lie. While insurers liked the part of reform that would require all Americans not eligible for Medicare or Medicaid to buy coverage from them, they did not like the provision that would eliminate the overpayments the federal government has been paying private insurers for years to participate in the Medicare Advantage program, which was created when Republicans controlled both chambers of Congress in the late 1990s.

A little history: A provision of the Balanced Budget Act of 1997, written primarily by the insurance industry and backed by House Speaker Newt Gingrich and Senate Majority Leader Trent Lott, gave Medicare beneficiaries the option of getting their benefits through private insurers. Republicans envisioned this as the first step toward the total privatization of Medicare.

The Insurance Industry's Government Favor

The problem was that insurers were reluctant to jump in unless they could be assured of a substantial profit. To get them to market Medicare Advantage plans, the government agreed to give them a big bonus. As a result, we the taxpayers now pay private insurers 14 percent more than the per-patient cost of the traditional Medicare program. These overpayments have contributed significantly to the record profits insurance companies have been posting in recent years, even though only 22 percent of people eligible for Medicare have bought what they're selling.

The insurers were not able to keep the Democrat-controlled Congress of 2010 from eliminating those bonuses when they passed the Affordable Care Act. The law will indeed reduce future Medicare spending -- not benefits -- by an estimated $500 million over the next 10 years in a variety of ways, one of which is to stop overpaying insurers. This means that they will not get an extra $136 billion that they -- and their shareholders -- had been counting on, and they're really bummed about that.

Knowing they fare much better when the GOP is running things on Capitol Hill, they devoted millions of the premium dollars we paid them to help elect more Republicans to Congress.

An Insurer-Funded Misinformation Campaign

The insurers funneled millions of dollars to their business allies and front groups in an effort to convince the American public that the Democrats wanted to cut Medicare benefits. Not only is that not true, but the new law actually adds an important new benefit and greatly improves another. For the first time, Medicare now pays for preventive care. And the law closes the hated "doughnut hole" in the Medicare prescription drug program.

But thanks to the success of the insurer-funded misinformation campaign, many seniors went to the polls last November convinced that the Democrats not only had created death panels in the Medicare program, they had also slashed their benefits.

The insurance industry funneled $86 million to the U.S. Chamber of Commerce to pay for TV ads that charged that the new law would "cut Medicare." Also joining in on the campaign of lies was the 60 Plus Association, a group that, according to the Washington Post, AARP and other sources, has received the lion's share of its funding over the years from the pharmaceutical industry and other special interests.

The 60 Plus Association ran TV ads in numerous congressional districts last fall against Democrats who had voted for the reform law. The ads were amazingly effective. Most of the Democrats they targeted lost.

The irony, of course, is that the GOP had no intention of preserving Medicare as seniors have known it since it was created more than 45 years ago. Ryan's plan to reduce the deficit -- which was approved by the House last week -- would complete the privatization of Medicare that insurers and their Republican allies have been plotting for years.

The Republican Effort to Kill Medicare: a Losing Proposition

Ryan wants to give Medicare beneficiaries a voucher they can use to get coverage from a private insurance company. Initially, the vouchers would enable beneficiaries to get coverage comparable to what they have today. But the value of the vouchers would diminish over time. The Congressional Budget Office predicts that 65-year-olds would be paying 68 percent of their Medicare coverage costs by 2030, compared with 25 percent today.

What this means is that almost all Medicare beneficiaries would eventually be woefully underinsured, just as an estimated 25 million younger Americans already are and just as most of the nation's elderly -- the ones who could afford coverage at all -- were before Medicare was enacted in 1965. (Most senior citizens had no health coverage before Medicare because insurance companies refused to sell it to them. That's why it was so urgently needed.)

Ryan's plan is a losing proposition for just about every American who lives long enough to qualify for Medicare benefits, but it is the business model that insurance firms have been dreaming of for years. It would enable them to reap profits that would make their earnings today pale by comparison.

If Democrats have any hope of keeping control of the Senate and regaining the House, they better be able to explain what's really going on in ways that even the Tea Party seniors will understand. If I were a Democratic strategist, I would be ordering enough "Hands Off My Medicare" signs to blanket the country.


Yes, I am paying attention. I am 65 and the first of the baby boomers. I am telling every other baby boomer I know that Mr. Ryan's plan is the only plan that will save our children's and our grandchildren's future and thus the future of this country.

Sadly, you are deeply mistaken. The idea that the country has no revenue problem with so many corporations escaping paying taxes is absurd. The idea that the nation has to balance the budget on the backs of the poor and the elderly is especially repugnant. And, it is utterly offensive to suggest that this is a crisis and yet fail to address the out of control military spending. For a libertarian view on the latter point, check out the following quick post: Lisa Graves

PapaB, Did you not understand anything that Mr.Potter just wrote? It is selfishness of seniors like yourself that is one of the reasons our country is in the shape it is today. Anyone 55 or older will keep the same benefits they currently have. The future retirees 54 and under will have to pay 68 percent for their medicare benefits. I guess you think that is fair to the younger generation. I cannot believe you had the audacity to send that comment. What makes you think I want to pay 68 percent and you only pay 25 percent for your benefits? There are other ways the country can be save for the future generations like myself. Your future looks like it is saved, but mine looks pretty bleak in the health care area.

Sparing changes to Medicare to those over 55 is a brazen political act to keep the vote of present seniors for 2012, people already scared out of their wits by last summer's town meetings that intentionally used misinformation to create baseless fears about proposed medical insurance reforms— death squads, reduction of benefits, profiling, elimination of doctor choice. I saw the creep-show with my own eyes. Now, the idea is Medicare benefits will be slashed for their children and their grand-children, but not for them! Now that's a real win! The debt Paul Ryan wants to take off the backs of our children and grand-children will help because they'll be too sick to stand up when the savings arrive. The unfunded Medicare D prescription drug program was a similar senior vote buyer. It's a very big 'medical problem' we're facing here, as a divisive, determined minority seeks to tear down FDR era reforms that allowed the rapid economic integration of all the forces of American industriousness, the 'miracle', that won World War II. Just try to imagine how much fun Karl Rove and the Koch Bros. cloning this virus. In a strong body, viruses can't withstand the healthy reaction of the immune system. So, let's take the headsets off our ears so we can hear the cackle of creeps, and flip our brains off 'pause' to 'active.' It takes a while to see what's just silly, and what's sick. I'm not laughing anymore.

Tail end of the Baby-Boomers and as we anticipated for years, Medicare is looking bleak for us! The recession took our savings, so, if we did have diversified assets we could liquidate them to survive, along with selling everything but the kitchen sink, to save our homes, and eat! Health care now, takes a chunk out of our checks, with a $2,000.00 deductable before they pay a dime on anything, including office visits and they get a nice premium every month too stick in their pockets, and no money out on thier part, no wonder the insurance companies have so much power they are rich off of us! But, to be responsible your scared to death not to have a policy. Scary,scary stuff going on in our beloved country! Middle clas gone. You have the rich and then the poor.

The Ryan plan is a disaster. Who are you listening to? Do some research yourself. If his plan passes we'll all be in big trouble.

I, too, am turning 65 this year and just beginning the dizzying maze that is Medicare. Believe me, I'm paying attention. The Ryan (republican) plan scares me to death. And to talk with other seniors who buy into the GOP rhetoric without doing much in the way of research is also frightening. Health care has needed reform for decades, but limiting it for those who need it most is NOT the answer. PAY ATTENTION!! Or when it's your turn, you won't have any health care. The health reform offered by the Democrats is on its way to helping. But scare tactics have convinced people that it's bad. We baby-boomers haven't settled for anything yet. Why start now? There are plenty of us -lets FIGHT BACK!!

Thanks to Mr. Potter for the best explanation of some of the Obama health care plan details that I have seen yet. Problems with the Ryan Plan (now adopted by the House Republicans): *No shared sacrifice. The tax rates on the wealthiest would fall from 35% to 25%. *Dismantling Medicare, and replacing it with a risky and untested voucher system that is unlikely to provide needed care to seniors. *Dismantling Medicaid, and replacing it with state block grants that may or may not offer adequate care. *No mechanism for job creation (especially as tax reductions haven't done the job yet.) Alternatives: *Creating additional brackets to increase taxes on the wealthiest (shared sacrifice). *Adopting Medicare for all to reduce administrative overhead and contain costs. If this is not possible, allow the Obama reforms explained by Mr. Potter to go through. *Examine the military budget for savings. I am not suggesting compromising national defense, but just finding reasonable savings in trillions of expenditures. *Ending U.S. corporate tax breaks for overseas hiring and investment. At minimum, this would increase U.S. tax revenues. It also might bring investment in jobs, plants and equipment back to the U.S.

Anyone that thinks turning over insurance coverage for 70 and 80+ year olds to for profit insurance companies for hospitalization coverage is naive. They will structure the plans to provide skimpy coverage with as many exclusions as they can, especially if the ACA consumer protections are lost if that legislation is repealed. Their for profit model will ensure that they will seek ways to either deny coverage when needed through pre-existing condition clauses or by throwing up red tape until the patient dies or gives up. There is no way any voucher plan would provide the same coverage that is now available under Medicare. Worse yet, the Republicans will be creating a two tiered system to garner support among current tea party seniors - who are secure in voting for gutting the program for future retirees as long as their benefits are left intact.

Many seniors I see at curves are completely unaware of what the republican congress wants to do to Medicare. They don't realize that if Medicare is privatized we will also lose our supplement to Medicare. We need to stand up to McConnell and Ryan and strongly refuse to accept this. They want to pay for a wall we don't need, with money saved by us not having healthcare. Wasting billions on a wall, is just one more foolish thing Trump wants to do.