Nonpartisan report: Ryan Medicare plan hurts Florida seniors the most 
 
 By Stephen C. Webster 
 
 Monday, October 15, 2012 15:14 EDT 
 
 The nonpartisan Kaiser Family Foundation said Monday that a year-long study has found that Rep. Paul Ryan’s (R-WI) plan to turn Medicare into a privatized “premium support” coupon program will result in higher costs for six out of every 10 beneficiaries just to maintain their current levels of service. 
 
 Kaiser’s study (PDF) found that his plan to partially privatize Medicare would result in wild variations in policy costs across the country, with some states set to be hit much worse than others, confirming in greater detail earlier studies that found Ryan’s plan would result in significantly higher costs for most seniors. 
 
 In particular, Kaiser notes that the crucial swing state of Florida — where former Massachusetts Gov. Mitt Romney currently enjoys a slight lead in the polls over President Barack Obama — would see the worst fallout, with about 77 percent of Medicare beneficiaries expected to pay $200 or more per month under the Republican’s coupon program. 
 
 It would be especially expensive in areas with the highest concentration of Medicare enrollees, like Miami-Dade County, where nearly all seniors face paying nearly $500 more per month, or Palm Beach County, where 99 percent of plans would go up by more than $370 a month. Kaiser added that Los Angeles County and Orange County in California also face some of the worst price hikes under the Ryan coupon plan, where 99 percent of seniors face paying an additional $$216-$260 more per month. 
 
 Overall, seniors would face increased costs of about $720 per year on average across the country under Ryan’s proposed plan, Kaiser added. 
 
 “That means that under Romney’s plan, millions of people—especially those with complicated health needs who see a lot of different doctors—would have to give up their doctors or pay extra to maintain access to their choices,” a prepared statement from the Obama campaign claimed. “Even worse, this study is just examining the impact of their plan in a single year. It ignores the role of adverse selection against traditional Medicare—which would drive costs higher and force more people to give up their choice of doctor. It also doesn’t factor in the impact of the cap Romney would place on the growth rate of the vouchers, which results in seniors paying thousands of dollars more every year regardless of which plan they choose.” 
 
 Both Romney and Ryan have campaigned on the claim that 7.4 million seniors will lose their access to Medicare due to cuts in Obama’s health reforms, but many fact checkers have refuted that representation of the law. The Affordable Care Act does not cut Medicare benefits, but instead aims to find billions in savings in the Medicare Advantage program, which officials say is unnecessarily costly. The 7.4 million figure cited by both conservative candidates is actually the Congressional Budget Office’s estimate of how many more people would be covered under traditional Medicare plans that cost beneficiaries less. Additionally, Ryan’s budget includes the same provision, and most Republicans in Congress have voted for it twice. 
 
 Reacting to Kaiser’s study, Romney spokesperson Andrea Saul told Talking Points Memo that Kaiser’s study does not reflect “the Romney-Ryan plan,” which is supposedly different from the Ryan plan, although neither candidate has specified where they differ on substance. “Our plan would always provide future beneficiaries guaranteed coverage options with no increase in out-of-pocket costs from today’s Medicare,” Saul insisted, offering no further details. 
 
 Romney said in August that he would implement a program that’s “the same if not identical” to what Ryan proposed. ||||| Nearly six in 10 Medicare recipients would pay higher premiums under a hypothetical privatized system along the lines of what Republican presidential candidate Mitt Romney has proposed, according to a study released Monday. 
 
 The report by the nonpartisan Kaiser Family Foundation also found striking regional differences that could lead to big premium hikes in some states and counties. That finding instantly made it ammunition in the presidential campaign. 
 
 In the senior-rich political swing state of Florida, the hypothetical plan modeled by Kaiser would boost premiums for traditional Medicare by more than $200 a month on average. In Nevada, another competitive state, 50 percent of seniors would face additional monthly premiums of $100 or more for their coverage. A new pattern of regional disparities would emerge from overhauling Medicare's payment system, the report said. 
 
 Romney and his running mate, Wisconsin Rep. Paul Ryan, have proposed changing Medicare to a "premium support" system dominated by private plans that are paid a fixed amount by the government. President Barack Obama says replacing the current open-ended Medicare benefit would shift costs to seniors. 
 
 Romney's approach would mirror the difference between traditional workplace pensions and modern-day 401(k) plans, in which the employer contribution is limited. While Medicare financing wouldn't be as heavy a lift for taxpayers, the risk is that retirees could end up paying more if medical costs rise. 
 
 The study carried a prominent disclaimer: It should not be taken as a specific analysis of the Romney-Ryan proposal, partly because their plan lacks details. However, Kaiser says it is modeled on what Romney and Ryan propose. 
 
 "This approach is similar to the premium support proposal included in (House Budget) Chairman Paul Ryan's ... budget proposal for (fiscal year) 2013 that was embraced by presidential nominee Mitt Romney," the report said. 
 
 Like the Romney-Ryan plan, government health insurance payments for individual seniors would be tied to the cost of the second-lowest private insurance plan in their geographical area, or traditional Medicare, whichever is less expensive. Seniors could pick a private plan or a new public program modeled on traditional Medicare. But if their pick costs more than the government payment, they would have to pay the difference themselves. 
 
 One of the biggest differences, however, is that the report assumes the privatization plan is already in place. Under Romney-Ryan, current beneficiaries and those 10 years from retirement could stay in the traditional system. But the Kaiser study assumed the change has already happened, and all Medicare recipients are already in the new system. 
 
 The study also did not model the effects of additional financial help that Romney has promised for low-income seniors and those in frail health, because such details have not been filled in. 
 
 The Obama campaign pounced on the findings, while the Romney camp pointed to the disclaimer, saying the report does not reflect the candidate's own plan. 
 
 "As the authors stress, this is not a study of the Romney-Ryan plan," said Romney spokeswoman Andrea Saul. "Our plan would always provide future beneficiaries guaranteed coverage options with no increase in out-of-pocket costs from today's Medicare." 
 
 The Obama campaign posted a link to the study on its website. 
 
 "Under Romney's plan, millions of people _especially those with complicated health needs who see a lot of different doctors_ would have to give up their doctors or pay extra to maintain access to their choices," said Obama spokesman Adam Fetcher. 
 
 Kaiser's top Medicare expert, Tricia Neuman, said the organization has been working on the report since the early part of the year, well before Romney picked Ryan as his running mate and cemented his support for the congressman's Medicare overhaul. 
 
 Kaiser serves as an information clearinghouse about the health care system. Neuman, a vice president of the group, said the goal is to help inform next year's budget debates, regardless of who is elected president. 
 
 Currently about 75 percent of Medicare's nearly 50 million beneficiaries are in the traditional government program, while the remaining 25 percent have opted for private Medicare Advantage plans. The standard Part B premium most beneficiaries pay is now $99.90 a month. 
 
 The study's main finding is that changing Medicare from an open-ended program that covers the same benefits across the country will have profound local implications. 
 
 Since Medicare spending per person varies dramatically around the country, privatizing the program would create big regional disparities. In high-cost areas, the difference between the second-least expensive private insurance plan and traditional Medicare can be substantial, said Neuman. 
 
 Because the government's contribution would be limited under the new system, seniors in areas with high medical costs would see an increase in their premiums for traditional Medicare unless they switch to a low-cost private plan. 
 
 In low-cost areas, the reverse would be true: seniors in private plans would pay higher premiums unless they switched to traditional Medicare. 
 
 Overall, the study found that 59 percent of all Medicare recipients would face higher premiums if they stick with their current coverage, including about half of those in the traditional program. 
 
 In five states _ California, Connecticut, Florida, New Jersey and Nevada _ more than 45 percent of beneficiaries would pay at least $100 a month more in premiums. 
 
 Premiums could also vary within states. In San Francisco and Sacramento counties in the northern part of California, premiums for traditional Medicare would remain unchanged. But to the south, in Los Angeles and Orange counties, premiums would go up more than $200 a month. 
 
 "If coupled with caps on the growth in Medicare spending, a premium support approach could make federal (spending) for the Medicare program more predictable but also increase costs and financial risks for beneficiaries over time," the report said. 
 
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 Online: 
 
 Kaiser Family Foundation study - http://tinyurl.com/8bj3l6h ||||| Transforming Medicare into a Premium Support System: Implications for Beneficiary Premiums 
 
 This study illustrates why geography would matter for Medicare beneficiaries under a premium support system that relies on a competitive bidding process envisioned under several key Medicare reform proposals. 
 
 
 
 It examines potential changes in the premiums paid by Medicare beneficiaries under a payment approach that caps federal contributions per beneficiary based on the cost of the second lowest-bidding private plan or traditional Medicare, whichever is lower in their area. 
 
 
 
 Under this approach, beneficiaries can choose among competing plans, but if they enroll in a more costly plan, for whatever reason, they would pay the additional premiums themselves. This differs from the current Medicare system, in which beneficiaries generally pay the same Medicare premium regardless of where they live, whether they choose traditional Medicare or a private plan, or whether they live in a high-cost or low-cost area. 
 
 
 
 The analysis does not attempt to model any specific proposal, but is generally based on an approach included in House Budget Chairman Paul Ryan's fiscal year 2013 budget plan, the proposal Chairman Ryan co-sponsored with Senator Ron Wyden of Oregon, and; in the plan put forward by former Senator Pete Domenici and Dr. Alice Rivlin. In the first two proposals, people who are at least 55 years old, including current beneficiaries, would be exempt from the new system. Republican presidential nominee Gov. Mitt Romney has supported a premium-support system along these lines. 
 
 
 
 To illustrate the potential effects on beneficiary premiums if such a system were fully implemented for all beneficiaries, the analysis layers the premium support proposal onto the current Medicare system reflecting beneficiaries' current plan choices, traditional Medicare expenditures by county, and the costs of providing Medicare benefits under private Medicare Advantage plans (known as 'bids'), drawing for actual data from 2010, the most recent year for which data are available. 
 
 
 
 Assuming full implementation of such a system, and assuming current plan preferences among beneficiaries, the study estimates that: 
 
 
 
 Nearly six in 10 Medicare beneficiaries nationally could face higher premiums for Medicare benefits, assuming current plan preferences, including more than half of beneficiaries enrolled in traditional Medicare and almost nine in 10 Medicare Advantage enrollees. Even if as many as one-quarter of all beneficiaries moved into a low-cost plan offered in their area, the new system would still result in more than a third of all beneficiaries facing higher premiums. 
 
 Premiums for traditional Medicare would vary widely based on geography under the proposed premium support system, with no increase for beneficiaries living in Alaska, Delaware, Hawaii, Wyoming and the District of Columbia, but an average increase of at least $100 per month in California, Florida, Michigan, New Jersey, Nevada and New York. Such variations would exist even within a state, with traditional Medicare premiums remaining unchanged in California's San Francisco and Sacramento counties and rising by more than $200 per month in Los Angeles and Orange counties. 
 
 At least nine in 10 Medicare beneficiaries in Connecticut, Florida, Massachusetts and New Jersey would face higher premiums in their current plan. Many counties in those states have relatively high per-beneficiary Medicare spending, which would make it more costly to enroll in traditional Medicare rather than one of the low-bidding private plans in those counties. In contrast, in areas with relatively low Medicare per-capita spending, it could be more costly to enroll in a private plan. This analysis does not attempt to model all aspects of any specific premium-support proposal, which would require more details than are currently available and assumptions about shifts in demographics, spending, and enrollment. The analysis also differs from Chairman Ryan’s most recent proposal by assuming full implementation in 2010 (rather than a phased-in implementation starting in 2023) and by not exempting everyone who is at least 55 years old now. 
 
 
 
 The analysis reflects actual plan bids and county-specific average traditional Medicare costs for 2010, the most recent year of data available. The analysis assumes that private plans would lower their bids by 5 percent across the board under the new payment structure, a reduction consistent with an earlier Congressional Budget Office assumption. In addition to the base analysis, the study also looks at how more or less aggressive bidding by private plans would affect the results and what might happen if significant shares of beneficiaries enroll in low-bidding plans. This study illustrates why geography would matter for Medicare beneficiaries under a premium support system that relies on a competitive bidding process envisioned under several key Medicare reform proposals.It examines potential changes in the premiums paid by Medicare beneficiaries under a payment approach that caps federal contributions per beneficiary based on the cost of the second lowest-bidding private plan or traditional Medicare, whichever is lower in their area.Under this approach, beneficiaries can choose among competing plans, but if they enroll in a more costly plan, for whatever reason, they would pay the additional premiums themselves. This differs from the current Medicare system, in which beneficiaries generally pay the same Medicare premium regardless of where they live, whether they choose traditional Medicare or a private plan, or whether they live in a high-cost or low-cost area.The analysis does not attempt to model any specific proposal, but is generally based on an approach included in House Budget Chairman Paul Ryan's fiscal year 2013 budget plan, the proposal Chairman Ryan co-sponsored with Senator Ron Wyden of Oregon, and; in the plan put forward by former Senator Pete Domenici and Dr. Alice Rivlin. In the first two proposals, people who are at least 55 years old, including current beneficiaries, would be exempt from the new system. Republican presidential nominee Gov. Mitt Romney has supported a premium-support system along these lines.To illustrate the potential effects on beneficiary premiums if such a system were fully implemented for all beneficiaries, the analysis layers the premium support proposal onto the current Medicare system reflecting beneficiaries' current plan choices, traditional Medicare expenditures by county, and the costs of providing Medicare benefits under private Medicare Advantage plans (known as 'bids'), drawing for actual data from 2010, the most recent year for which data are available.Assuming full implementation of such a system, and assuming current plan preferences among beneficiaries, the study estimates that:This analysis does not attempt to model all aspects of any specific premium-support proposal, which would require more details than are currently available and assumptions about shifts in demographics, spending, and enrollment. The analysis also differs from Chairman Ryan’s most recent proposal by assuming full implementation in 2010 (rather than a phased-in implementation starting in 2023) and by not exempting everyone who is at least 55 years old now.The analysis reflects actual plan bids and county-specific average traditional Medicare costs for 2010, the most recent year of data available. The analysis assumes that private plans would lower their bids by 5 percent across the board under the new payment structure, a reduction consistent with an earlier Congressional Budget Office assumption. In addition to the base analysis, the study also looks at how more or less aggressive bidding by private plans would affect the results and what might happen if significant shares of beneficiaries enroll in low-bidding plans. Report (.pdf) 
 
 
 
 Information provided by the Program on Medicare Policy 
 
 Publication Number: 8373 
 
 Publish Date: 2012-10-15
– Paul Ryan's coupon-based Medicare plan would result in higher costs for six in 10 beneficiaries for the same service they're getting now—and Floridians would suffer the greatest financial toll, a yearlong, nonpartisan study finds. The Kaiser Family Foundation says that Medicare beneficiaries in Florida would pay, on average, more than $200 extra per month on the Ryan plan, the AP reports. In Miami-Dade County, which has a large population of beneficiaries, most recipients would pay almost an extra $500 per month; 99% of Palm Beach County plans would rise $370 a month, the Raw Story reports. Seniors nationwide would pay an average of an extra $720 a year, the Kaiser report finds. Both campaigns have already issued reactions to the study. The Obama campaign says the study doesn't even tell the full story, since it only looks at "a single year" and "ignores the role of adverse selection against traditional Medicare—which would drive costs higher." A Romney rep notes that the study doesn't look at "the Romney-Ryan plan"—distinct from the Ryan plan, though Mitt Romney has called the two "the same, if not identical." The Romney-Ryan plan would mean "no increase in out-of-pocket costs from today’s Medicare," the spokeswoman adds.