U.S. Rep. Paul Ryan’s (R-Wis.) Fiscal Year 2012 budget sought to repeal the key provisions of the 2010 Affordable Care Act (ACA) that deal with insurance coverage and to significantly alter Medicare by entirely eliminating the traditional fee-for-service (FFS) structure and enrolling all beneficiaries in the premium support system.
Summary of key Medicare reforms in Ryan’s FY 2012 House Budget:
• Beginning in 2022, convert the current Medicare system to a system of federal premium support payments that would be set at a predetermined amount and grow over time with the consumer price index; beneficiaries would use the payment to choose from competing private insurance plans on a newly established Medicare exchange.
• In its report, “Long-Term Analysis of a Budget Proposal by Chairman Ryan,” the Congressional Budget Office (CBO) provided additional details on how premium support payments would be determined and how the Medicare exchange would operate.
• The CBO report said: “The payment for 65 year olds in 2022 is specified to be $8,000, on average, which is approximately the same dollar amount as projected net federal spending per capita for 65 year olds in traditional Medicare under current law in that year. The premium support payments would increase in each year after initial eligibility by an amount that reflected both the increase in the consumer price index and the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age.”
• “Plans would have to comply with a standard for benefits set by the Office of Personnel Management. Plans would have to issue insurance to all people eligible for Medicare who applied and would have to charge the same premiums for all enrollees of the same age. The premium support payments would go directly from the government to the plans that people selected,” according to the CBO report.
• Beginning in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033. Changes would apply to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in the traditional Medicare program, with the option of converting to the new system.
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