Since it seems that Romney has vocalized support for the Ryan/Wyden compromise health care plan rather than the Ryan plan that was folded into his budget, I thought it comparing these two plans might yield some interesting discussion, since, if I recall correctly, there was some cross-partisan support for the Ryan/Wyden plan. So, I'm posting all this so you all can think about which plan you might prefer and why. I start with a policy comparison of the plans and conclude with projected cost analyses of the two plans.
Here is a chart comparing the Medicare and Medicaid policy outlines of the two plans that I produced this past weekend on another thread, with the relevant plans now in the first and third columns.
http://www.kff.org/medicare/upload/8284.pdfThe most glaring contrasts (accompanied by some similarities) between these plans seem to me to be the following:
--Under ACA, no changes are made to the eligibility age for Medicare, while under Ryan-Wyden, eligibility for Medicare increases by two months per year, reaching 67 in 2033.
--Under the ACA, Medicare remains a defined benefit plan for seniors, effective in continuation, which gives them the option of purchasing supplemental coverage for Parts A, B and D. The Ryna/Widen plan would, for the next ten years, give beneficiaries the option of either remaining in traditional Medicare or enrolling in the new system. The plan will then change Medicare to a premium-support system in 2022 which reimbursed an individually determined percentage of a premium for a plan purchased from a state exchange that was actuarially equivalent to a current FFS plan, though which may not feature the same benefits.
--Under ACA, while there is a limit to out-of-pocket spending with Advantage and Part-D, there is none with FFS plans. In Ryan/Wyden, because all these plans are eventually collapsed into private coverage, there is a limit set to out-of-pocket expenses (this latter detail differs from Ryan's stand-alone plan).
--Under ACA, the government pays 95%-115% of Advantage-covered A and B plans and 75% of Part D plans, going up to 80% of catastrophic needs, with percentages determined by federally established benchmarks and made available for competitive bidding. In Ryan/Wyden, benchmarks for reimbursement are set by the second-cheapest plan in a state exchange that offers the actuarial equivalent of the FFS plan. In other words, both plans rely on private bidding, but in ACA, the benchmarks are determined by the feds based on locality, while in Ryan/Wyden, they are determined by state exchanges. In addition, under ACA, reimbursement levels are determined by health risk profile for part A and B coverage and also by income means testing for part D, while Ryan/Wyden implements risk profile, geographical locale and means testing for all coverage.
--Under ACA, part A benefits are guaranteed, while beneficiaries generally play 25% of the premium costs for Part B and Part D coverage. In Ryan/Wyden, beneficiaries who purchase a plan more expensive than the state exchange plan identified as the benchmark will be responsible for the difference, and those who buy less expensive plans will have the difference deposited in a "health savings" account, which can be used for other supplemental premium reimbursement, co-pays or out-of-pocket expenses.
--Under ACA, the feds provide information about specifically Medicare coverage variations while in Ryan/Wyden, such information is made available through the state exchanges.
--Under ACA, a certain "basket" of benefits is guaranteed with some local variations, whereas, in Ryan/Wyden, the state exchanges would determine specificities of benefits so long as they're equal to the actuarial value of the FFS plan.
--Guaranteed issue and community rating for Medicare beneficiaries are available under both plans, and both restrict adjusting ratings on the basis of age and risk profile, but ACA requires special pooling for "special needs" plans.
--Under ACA, risk pooling is also managed by prohibiting Advantage plans from charging high cost-sharing amounts for services, incentivizing sicker people from buying them. Under Ryan/Wyden, tax fees would be charged to companies with heavily populated low-risk pools and tax incentives would be offered to those with large high-risk pools.
--ACA compels Medicaid plans (in states that participate in expansion) to pay for part B premiums and limits part D cost-sharing requirements for beneficiaries who are dually eligible up to 135% of the poverty line. In Ryan/Wyden, dual eligibility would be determined by states, and those deemed dually eligible would receive unspecified amounts of premium and cost-sharing assistance from Medicaid.
--Premium contributions and cost-sharing requirements for high-income beneficiaries are the same under both plans.
--Under ACA, cost savings mechanisms involve lower payments to providers, cuts to Medicare Advantage plans, and ongoing CMM and IPAB oversight on how to compensate value-based plans and make such recommendations to Congress, while under Ryan/Wyden, though IPAB remains in place, Congress decides on what to do should annual Medicare spending exceed projected targets with unspecified requirements as to IPAB input. Under both plans, the annual Medicare spending cap target is GDP + 1%.
n terms of costs of these alternative plans going forward, here are the latest analyses from government sources that at least offer some comparable figures. Keep in mind that these numbers are based on greatly variant budgetary assumptions and extrapolations about future revenues and expenses that are purely speculative; in other words, both sets of numbers are very much guesses
Recent CMM testimony before Congress, basing its figures on pre-SCOTUS decision implications, estimated that ACA will lead to a net reduction of Medicare spending by .5% of GDP by 2019, but a net increase in Medicaid and CHIP expenditures of around .3%. Significantly, this testimony estimates that total national health care expenditures under the provisions of ACA would, by 2019, rise by almost 3.5%.
http://budget.house.gov/uploadedfiles/fostertestimony1262011.pdfSomething close to the Ryan/Wyden plan was analyzed by the CBO in the context of its scoring of Ryan's 2013 budget. Compared to an "Alternative Fiscal Scenario" that the CBO deems consistent with current law and the continuation of recent legislative policies, they estimate that Medicare spending would be reduced by 2.5% of GDP and Medicaid and related spending by 3.5% of GDP by 2050. Note that the savings on Ryan/Wyden kick in much later, only saving about .5% of GDP in the beginning of the 2020's because the plan doesn't fully kick in until then.
http://pgpf.org/Issues/Fiscal-Outlook/2012/03/032112-Ryan-Budget.aspxThe American people get to pick their retirement poison in a few short months!
