Featured Research

from universities, journals, and other organizations

Ryan plan would fundamentally change Medicare, expert says

Date:
April 7, 2011
Source:
University of Illinois at Urbana-Champaign
Summary:
A law professor says House Budget Committee Chairman Paul Ryan's proposal to change Medicare for those under age 55 is nothing short of a complete reconceptualization of the popular health insurance program.

House Budget Committee Chairman Paul Ryan's proposal to change Medicare for those under age 55 is nothing short of a complete reconceptualization of the health insurance program, says a University of Illinois elder law expert.

Related Articles


Richard L. Kaplan, a professor of law and expert on retirement issues, says the Ryan proposal would scrap Medicare's current defined-benefit program in favor of a defined-contribution arrangement in which the government would provide seniors with a stipulated amount of money to purchase health insurance from private insurers.

"The Ryan proposal would eliminate the package of benefits that everyone receives but would allow seniors to choose from a variety of plans with different benefits, different premiums and different co-payment obligations," Kaplan said.

Kaplan, the Peer and Sarah Pedersen Professor of Law at Illinois, says that what Rep. Ryan is proposing isn't a radically new idea, as a broadly similar plan was first considered at length during the Clinton administration.

"It was proposed under the title of 'premium support,' though occasionally it has been described as vouchers," he said. "Essentially, it's the same concept -- provide seniors with a designated amount of money and let them shop for the plan that best meets their needs."

While there may be nothing new under the sun in Washington, that doesn't mean that some seniors won't come out ahead under the Ryan proposal.

"Some seniors will benefit, because they will be able to use their Medicare dollars for benefits that they prefer," Kaplan said. "For example, Medicare currently pays for individual hospital stays of 60 to 90 days in length. But the average hospital stay for someone 65 years and older is less than six days. So a prospective Medicare enrollee might choose a plan in the proposed system that provides shorter hospital stay coverage but more extensive home health care coverage than Medicare currently includes."

The chief motivator of the Ryan plan is to, plain and simple, save the government money, Kaplan said.

"As medical costs increase, Medicare's costs rise accordingly," he said. "Under the Ryan plan, Medicare's costs would be fixed and known in advance. Increases in medical costs over whatever cost-of-living increase the government dictates for Medicare will not be borne by Medicare, but by those seniors who choose more comprehensive benefit plans."

Although last year's health care reform law left the basic structure of Medicare intact, the Ryan proposal would transform Medicare to make it resemble the types of health insurance plans that many employers offer to their employees. Although this would represent a dramatic change, Kaplan said, such changes to Medicare are not wholly unprecedented.

"Actually, Medicare Part D, which provides coverage for prescription drugs, operates on a very similar basis -- private insurers receive government subsidies to provide various drug plans, and seniors select among the options that are available, paying more for greater coverage," Kaplan said.

But in a different health insurance paradigm, the downside is that seniors will almost certainly face more complexity.

"If our experience with Medicare Part D's drug plans is any indication, older Americans will confront a new array of insurance plans under Medicare, some of which may change their components annually," Kaplan said.

But Kaplan is quick to note that the present system is no walk in the park either.

"Presently, most seniors sign up for hospital coverage under Medicare Part A, then decide whether they want to purchase Medicare Part B coverage for physicians' charges, and then decide whether to add a Medicare Part D plan to cover their prescription medication needs," he said. " Then they must consider whether to buy a private Medigap insurance plan to pay for the deductibles and co-payment or co-insurance obligations of Medicare Parts A and B. So, in many ways, the new system of integrated benefit plans will be simpler and more intuitive. But the transition to this new environment will certainly be challenging."

Not all seniors will be affected by the change; adults 55 years and older would be largely unaffected by Ryan's proposal, Kaplan said.

"Unless an option is provided to let them switch, which may or may not be incorporated into the final plan, anyone who is in Medicare presently will not be affected by his proposal," Kaplan said. "Those seniors who are already familiar with Medicare's component parts need not bother with this legislation."


Story Source:

The above story is based on materials provided by University of Illinois at Urbana-Champaign. Note: Materials may be edited for content and length.


Cite This Page:

University of Illinois at Urbana-Champaign. "Ryan plan would fundamentally change Medicare, expert says." ScienceDaily. ScienceDaily, 7 April 2011. <www.sciencedaily.com/releases/2011/04/110407171732.htm>.
University of Illinois at Urbana-Champaign. (2011, April 7). Ryan plan would fundamentally change Medicare, expert says. ScienceDaily. Retrieved November 25, 2014 from www.sciencedaily.com/releases/2011/04/110407171732.htm
University of Illinois at Urbana-Champaign. "Ryan plan would fundamentally change Medicare, expert says." ScienceDaily. www.sciencedaily.com/releases/2011/04/110407171732.htm (accessed November 25, 2014).

Share This


More From ScienceDaily



More Health & Medicine News

Tuesday, November 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

From Popcorn To Vending Snacks: FDA Ups Calorie Count Rules

From Popcorn To Vending Snacks: FDA Ups Calorie Count Rules

Newsy (Nov. 25, 2014) The US FDA is announcing new calorie rules on Tuesday that will require everywhere from theaters to vending machines to include calorie counts. Video provided by Newsy
Powered by NewsLook.com
Daily Serving Of Yogurt Could Reduce Risk Of Type 2 Diabetes

Daily Serving Of Yogurt Could Reduce Risk Of Type 2 Diabetes

Newsy (Nov. 25, 2014) Need another reason to eat yogurt every day? Researchers now say it could reduce a person's risk of developing type 2 diabetes. Video provided by Newsy
Powered by NewsLook.com
Madagascar Working to Contain Plague Outbreak

Madagascar Working to Contain Plague Outbreak

AFP (Nov. 24, 2014) Madagascar said Monday it is trying to contain an outbreak of plague -- similar to the Black Death that swept Medieval Europe -- that has killed 40 people and is spreading to the capital Antananarivo. Duration: 00:42 Video provided by AFP
Powered by NewsLook.com
Are Female Bosses More Likely To Be Depressed?

Are Female Bosses More Likely To Be Depressed?

Newsy (Nov. 24, 2014) A new study links greater authority with increased depressive symptoms among women in the workplace. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins