60 Plus Association Ad Lies About The GOP's "Promise" To Seniors

April 22, 2011 12:58 pm ET

60 Plus Association, a group that calls itself "the conservative alternative to the liberal AARP," is running a 60-second radio spot in over 30 congressional districts as part of a new $800,000 ad campaign. The ad thanks House Republicans for supposedly protecting Medicare, but contrary to 60 Plus' claim, a vote for the GOP budget was not a vote to 'protect and preserve' Medicare. Instead, it was a vote to end Medicare as we know it by turning it into a voucher system. And despite the group's assertion that there will be "no changes for seniors on Medicare now or those who will soon go on it," the GOP budget will negatively impact current seniors in addition to hurting future seniors.

60 Plus Association: "Promises Made, Promises Kept"

Something unusual happened last week, in Washington, D.C., of all places. Elected officials actually did what they said they would. The House passed a budget that protects and preserves Medicare for years to come. And our congressman, Allen West, voted to protect Medicare and keep it secure for future retirees. Our national debt is $14 trillion. America is literally spending money we don't have and future generations won't be able to afford. With 10,000 baby boomers reaching retirement age every day, important programs like Medicare are being crushed — and could collapse if we don't act to strengthen and improve them. No changes for seniors on Medicare now or those who will soon go on it. Control costs by targeting waste, fraud and abuse — so current and future seniors receive the quality care they have earned. Call Allen West at (954) 202-6211. Thank him for voting to protect Medicare and tell him to continue keeping his promise to seniors. Paid for by the 60 Plus Association.

Actually, The GOP Budget Ends Medicare As We Know It By Turning It Into A Voucher Program...

The GOP Budget Turns Medicare Into A Voucher System. From "The Path to Prosperity":

Save Medicare for current and future generations while making no changes for those in and near retirement. For younger workers, when they reach eligibility, Medicare will provide a Medicare payment and a list of guaranteed coverage options from which recipients can choose a plan that best suits their needs. These future Medicare beneficiaries will be able to choose a plan the same way members of Congress do. Medicare will provide additional assistance for lower-income beneficiaries and those with greater health risks. [The Path To Prosperity, 4/5/11, emphasis added]

...Leaving Seniors To Pay Higher Health Care Costs...

CEPR: GOP Budget Would Force Seniors To Spend Much Of Their Income On Health Insurance. According to Center for Economic Policy Research co-director Dean Baker:

Representative Ryan would replace the current Medicare program with a voucher for people who turn age 65 in 2022 and later. This voucher would be worth $8,000 in for someone turning age 65 in that year. It would rise in step with the consumer price index and also as people age. (Health care expenses are higher for people age 75 than age 65.)

According to the CBO analysis the benefit would cover 32 percent of the cost of a health insurance package equivalent to the current Medicare benefit. This means that the beneficiary would pay 68 percent of the cost of this package. Using the CBO assumption of 2.5 percent annual inflation, the voucher would have grown to $9,750 by 2030. This means that a Medicare type plan for someone age 65 would be $30,460 under Representative Ryan's plan, leaving seniors with a bill of $20,700. (This does not count various out of pocket medical expenditures not covered by Medicare.)

According to the Social Security trustees, the benefit for a medium wage earner who first starts collecting benefits at age 65 in 2030 would be $32,200. (This adjusts the benefit projected by the Social Security trustees [$19,652 in 2010 dollars] for the 2.5 percent annual inflation rate assumed by CBO.) For close to 70 percent of seniors, Social Security is more than half of their retirement income. Most seniors will get a benefit that is less than the medium earners benefit described here since their average earnings are less than that of a medium earner and they start collecting Social Security benefits before age 65. [CEPR.org, 4/6/11, emphasis added, all parentheses original, internal citations removed for clarity]

CBO: Under The GOP Budget, "Most Elderly People Would Pay More For Their Health Care Than They Would Pay Under The Current Medicare System." According to the Congressional Budget Office: "Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario." [CBO.gov, 4/5/11]

In 2022, A Typical 65-Year-Old Would Be Paying Approximately Double Compared To Current Levels. The Center on Budget and Policy Priorities prepared a graphic comparing health care spending for a typical 65-year-old under the current system to the same spending under the Republican budget:

[CBPP.org, 4/7/11]

If Medical Costs Continued To Increase Faster Than Voucher Values, "The Average Retiree Would Be More Than $50,000 In The Hole." According to an op-ed in the Huffington Post by R.J. Eskow, Senior Fellow with The Campaign For America's Future:

Even if the voucher is given full Medicare value in Year One (which we question), things start to get really bad after that. If medical costs continued to increase at 9% each year, which isn't at all impossible, and the voucher's value continued to increase at 5%, here's what would happen 10 years later using my figures:

By 2031, the cost of Medicare-equivalent coverage would be $73,000, and the voucher would be worth $18,000. By my calculation, the average retiree would be more than $50,000 in the hole. [Eskow Op-Ed, 4/6/11 via Huffington Post, emphasis original]

...And Resulting In Rationing Of Health Care

The GOP Budget "Would Effectively Result In More Rationing On The Basis Of Income." According to the Center on Budget and Policy Priorities:

Many future Medicare beneficiaries with modest incomes, such as elderly widows who must live on $15,000 or $20,000 a year, also would likely be hit by the plan's Medicare provisions; the Medicare voucher (or defined contribution) they would receive would fall farther and farther behind health care costs — and purchase less and less coverage — with each passing year. Aggravating this problem, Ryan has said that his plan calls for repeal of a key measure of the health reform law that is designed to moderate Medicare costs — the Independent Payment Advisory Board. In other words, his plan would scrap mechanisms to slow growth in the costs of health care services that Medicare beneficiaries need, even as it cuts back the portion of those costs that Medicare would cover.

Affluent Medicare beneficiaries surely would respond to shrinking Medicare coverage over time by buying more supplemental coverage. Those who could not afford to do so, however, would get less health care. This is another way that the Ryan health care changes would make ours more of a two-tier health care system and would effectively result in more rationing on the basis of income. [CBPP.org, 4/6/11]

Politico: GOP Budget "Will Control Costs By Requiring Seniors To Ration Themselves." From Politico: "The Ryan plan to privatize Medicare will control costs by requiring seniors to ration themselves, said Michael Tanner with the Cato Institute. 'Rationing is going to go on within the Medicare system. It's a fact of life' given financial constraints, he said. 'The question's going to be, is that decision going to be made by government and imposed top down under the current system? Ryan wants to shift that responsibility to individuals and from the bottom up.'" [Politico, 4/7/11]

The GOP Budget Would Also Raise The Medicare Eligibility Age

The GOP Budget Would Raise The Retirement Age To 67, Possibly Pricing Some Seniors Out Of The Market Or Raising Health Care Prices For All Americans. According Time magazine's Swampland blog:

Even more vexing, however, is how 65- and 66-year-olds would get coverage. Although Ryan doesn't say so in the Path to Prosperity document, which was released on Tuesday, his plan would raise the Medicare eligibility age from 65 to 67 by 2033. This would save the federal government money, but if these people shop for coverage on the open market, one of two things will happen: insurers will either price them out, or drive up prices for everyone. Again, this depends on what Ryan would propose to do with the health care law's new insurance regulations. [Time¸ 4/6/11]

The GOP Budget Will Negatively Impact Current Seniors, Too

Centrist Think Tank: Despite Ryan's Claim, "Current Beneficiaries Are Not Protected In The Ryan Budget." According to a report from Third Way by David B. Kendall, Senior Fellow for Health and Fiscal Policy and Ryan McConaghy, Director of the Economic Program:

Despite promises to the contrary, current beneficiaries are not protected in the Ryan budget. Under the Republican proposal, traditional Medicare would quickly become second-class medicine. It would "wither on the vine," as then-House Speaker Newt Gingrich described a similar GOP effort in 1995.

The traditional Medicare plan, which covers three-fourths of today's beneficiaries, relies on its huge size to keep costs down. Doctors and hospitals are not required to participate in it, but they have little choice if they wish to treat any seniors, who are the nation's biggest health care consumers.

Fewer doctors would participate in the traditional Medicare plan if there were an alternative. The traditional plan pays physicians about 20% less than private health insurance plans. Today, that is essentially a discount for the large volume of Medicare patients. Under the Ryan budget, it would become a reason for doctors to leave the traditional plan.

By 2030, only 55% of Medicare beneficiaries would still be eligible for traditional Medicare according CBO. Actual enrollment would be less than half of Medicare beneficiaries because many seniors would continue to enroll in private health care coverage under Medicare Advantage. By 2040, traditional Medicare would have only about 20% of Medicare beneficiaries.

[ThirdWay.org, 4/14/11, internal citations removed for clarity]

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