The real, true, unedited, factual impact of Republican Health Care Proposal H-Con Res 34 for 2012.

Posted on August 25, 2011


On April 15, 2011, House Republicans passed their budget proposal (H. Con. Res. 34) for FY 2012. Their budget would make three major changes in Medicare:

  1. The Republican budget significantly cuts spending on Medicare by eliminating benefits and shifting costs to seniors and individuals with disabilities. These reductions in benefits and cost shifts affect both current and future Medicare beneficiaries. By 2050, the Republican budget would cut Medicare nearly in half, corresponding to about $20 trillion in cuts in today’s dollars, according to projections by the nonpartisan Congressional Budget Office.
  2. The Republican budget ends traditional Medicare for individuals age 54 and younger. Seniors who become eligible for Medicare in 2022 would no longer be allowed to join the traditional Medicare program; instead, they would receive a federal contribution, sometimes called a “voucher” or “premium support,” to use to purchase private insurance coverage. According to CBO, the private insurance coverage would cost 50% more than traditional Medicare in 2022.The value of the federal contribution would increase at the rate of inflation, which is a slower rate than the increase in health care costs. Over time, because of the higher cost of private plans and the reduced value of the federal contribution, beneficiaries would be forced to pay an ever-growing portion of their health care costs. By 2032, CBO estimates that beneficiaries would be required to pay 68 PERCENT of their health care under the Republican plan, compared to about 25 percent under traditional Medicare.
  3. The Republican budget increases the eligibility age for Medicare, which is currently 65. Beginning in 2022, the eligibility age increases by two months each year, until it reaches age 67 in 2033. These changes will mean that millions of Americans will have to wait an extra two years until they can receive Medicare benefits.

The Republican leadership – Mitch McConnell and John Boehner said that “if you’re a person who is 55 years of age or older, there’s no change in Medicare for you” and that “we protect Medicare for current seniors.” McConnell and Boehner are LYING. The TRUTH is that the Republican plan would immediately cut benefits for more than 3 Million seniors and individuals with disabilities in the country. The Republican budget eliminates Medicare as we know it for anyone age 54 or younger.

And you know what else you can dread out of H-Con Res 34 for 2012?   Pretty much everything.

Higher drug costs. The Affordable Care Act, which Congress enacted last year, reduces drug costs for seniors and the disabled on Medicare by closing the gap in prescription drug coverage known as the “donut hole.” This year, beneficiaries who use between $2,840 and $6,450 worth of prescription drugs will receive a 50% discount on those brand-name drugs; by 2020, the donut hole is completely eliminated. The Republican budget repeals the provisions in the Affordable Care Act that close the donut hole. This will increase costs for more than 5.5 Million Medicare beneficiaries who entered the donut hole last year. For the average beneficiary, the cost increase will be $520 this year and more than $9,800 over the next decade. The total increase in drug costs for Medicare beneficiaries will be $3,500 per-person this year and $6,560 per-person over the next decade.

Elimination of new preventive care benefits. The Affordable Care Act provides Medicare beneficiaries with free preventive care benefits starting January 1, 2011. The new preventive benefits include a free annual wellness visit and the elimination of any deductible or co-payment for preventive services such as breast or colon cancer screening. The Medicare Actuary estimates that the free preventive care, combined with other cost saving measures in the Affordable Care Act such as changes in provider reimbursement, will save the average beneficiary $2,500 over the next decade. Under the Republican plan, you are no longer be entitled to free preventive care or benefit from the other cost-saving provisions in the Affordable Care Act. In the aggregate, the Republican plan will increase your personal cost by $21,930 over the next decade.

Elimination of Medicare’s guaranteed benefits. Medicare provides essential guaranteed benefits for all who qualify and enroll – the right to basic health coverage, including coverage for doctor and hospital visits, stays in skilled nursing facilities, home health care, and other health care needs; the right to go to any doctor or hospital that accepts Medicare; and strict protections that do not require older Medicare enrollees to pay higher premiums. The Republican budget eliminates these guaranteed benefits for anyone age 54 or younger. It replaces the entitlement of coverage with a federal contribution of diminishing value that the individual can use to purchase health insurance on the private market. This change will directly (and negatively) affect 76 percent of the country’s population. Starting in 2022, all new enrollees in Medicare will be forced to buy private insurance using under-funded federal contributions, with no guarantees that they will receive the health care benefits they need.

Increased annual costs. The private health plans required under the Republican budget would cost more than today’s Medicare, and the federal contribution provided to purchase the plans would not cover all costs of care. According to the nonpartisan Congressional Budget Office, a newly enrolled beneficiary in 2022 would face out-of-pocket costs that are $6,000 higher than their costs under traditional Medicare. By 2032, these out-of-pocket costs would be approximately $12,000 per-person more than traditional Medicare. Under the Republican plan, cumulative out-of-pocket costs for Medicare coverage during their first 20 years of program eligibility will increase by 235 PERCENT.

Increased retirement burdens. The Center for Economic and Policy Research did an analysis of the additional savings that today’s 44- and 54-year-olds would need to cover their increased out-of-pocket costs for health coverage under the Republican budget. According to the Center, the average 54 year-old would need to save an extra $180,000 by age 65 to pay for the extra costs. Today’s 44-year-olds will have to personally save $287,000 per-person to pay for the increased cost of their health coverage after they turn 65.

Increase the Medicare eligibility age. Beginning in 2022, the Republican budget increases the age at which seniors obtain Medicare eligibility, raising the eligibility age two months per year from its current level of 65 until the eligibility age reaches 67 in 2033.

Those are the facts, folks. No spin. No interpretation. No rhetoric or name-calling.  Just the hard-core figures directly from the Republican’s plan itself.  But don’t take my word for it.  Read the plan and then decide who’s lying to you.