I will show you that the Ryan Plan will end up killing seniors in large numbers with his vision of Medicare. The killer is that the “voucher” value is increased at CPI-U, where medical costs are increasing far faster.
Every year, the “voucher” has less value. After 20 years on Ryan Medicare, the “voucher” will pay for less than half of a health care insurance policy, and that the senior will be paying, on average, 82.5% of their income on medical care instead of the current 7%.
Yes, after 20 years, the Ryan Plan shifts half of the cost of health care insurance from the government to the senior. I contend that this will make many seniors go without insurance, receive inadequate medical care, and will die sooner than under the current plan.
The most devastating component in the Ryan Plan is that the “voucher” value decreases as time goes by. “Voucher” value increases at CPI-U, about 3% traditionally. while medical inflation currently increases at about 7%. As this difference compounds, it makes the “voucher” value lower and shifts more of the cost of insurance to the senior. Let me demonstrate using calculations assuming that CPI-U will increase at 3%, medical inflation will be 7%, and senior income will rise 3% annually.
The current situation is that seniors pay about 25% of their medical costs and Medicare pays about 75%. The average senior has an income of $20,000 and pays about $1,500 – about 7% of their income - for medical care.
In 2022, the “voucher” value will be $6,000 according to Ryan. This is the estimate of the government cost of Medicare for a senior. The senior already pays about 25% of their medical bills, so the total medical costs per senior are estimated to be $8,000 in 2022. The senior will pay $2,000 from an income of $26.095, which is still around 7%.
In Year 10 of the Ryan Plan, the “voucher” value will be $7,829. The cost of insurance will be $11,031 and the cost of medical care will be $14,707. The senior will pay $6, 879. or 26.4% of the senior’s income of $26.095.
In Year 20 of the Ryan Plan, the “voucher” value will be $10,251. The cost of insurance will be $21,699 and the cost of medical care will be $28,832. The senior will pay $18,411, or 52.5% of their $35,070 income.
In Year 30 of the Ryan Plan, the “voucher” value will be $14,139, the cost of insurance will be $42,586, and the total cost of medical care will be $56,914. The senior will pay $42,775, which is 90.8% of the senior’s income of $47,131.
The Ryan Plan saves money for the government – by putting the burden of health care on the neck of every senior. By age 75, seniors will have to spend half of their income on health care, compared to the current rate of 7%. By age 85, very few seniors would be able to afford health care or insurance. Think about millions of uninsured seniors. This would, in my opinion, lead many to premature death, financial ruin, and a badly diminished quality of life on too large a scale to happen in a civilized country.
Now. Do you think my title was over the top? I stand by it.
The floor is yours.