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Kaiser Study: Romney/Ryan Medicare Voucher System Would Mean Higher Premium Costs

Courtesy of the Kaiser Foundation and the Hill

Converting Medicare to a voucher system would raise premiums for more than half of seniors, assuming they keep their current healthcare plans, according to a new study.

The nonpartisan Kaiser Family Foundation found that about 6 in 10 Medicare beneficiaries would see higher premiums under a generic “premium-support” model, assuming their plan preferences remain the same.


This would include more than half of seniors enrolled in traditional Medicare and nearly all of those enrolled in Medicare Advantage, Kaiser said.

Study authors called their premium-support model “similar” to proposals backed by GOP presidential candidate Mitt Romney and his running mate, Rep. Paul Ryan (R-Wis.).

The most extreme example, according to the study, would be Florida’s Miami-Dade County, where seniors could pay as much as $492 more per month to remain in traditional Medicare, or $5,904 more per year.

Under premium support, which is meant to curb cost growth in Medicare, the federal government would provide seniors with a certain amount of money to buy health insurance. The current Medicare system, by contrast, entitles seniors to a defined set of healthcare benefits.

“This paper aims to help inform policy discussions by examining the potential implications of a leading premium support approach on Medicare premiums,” the study’s authors wrote.


An analysis of the Romney-Ryan plan, they said, “would require additional, more detailed policy specifications than are currently available, and would also require assumptions about future shifts in demographics, spending, and enrollment.”

But the Obama campaign quickly seized on the figures to criticize Romney for backing a premium-support model for Medicare.

“If Romney’s plan had been in place this year for today’s seniors, nearly 60 percent would have had to pay more to get the same coverage that they enjoy today,” the Obama campaign wrote in a blog post, citing Kaiser.

The campaign added that seniors facing major cost jumps under premium support would be “forced into a new private plan” with “limited” provider choices.

“That means that under Romney’s plan, millions of people — especially those with complicated health needs who see a lot of different doctors — would have to give up their doctors or pay extra to maintain access to their choices,” the Obama campaign wrote.


For its premium-support model, Kaiser tied federal Medicare payments to the second-lowest cost healthcare plan offered in a given area, or to traditional Medicare — whichever costs less.

The study found that any extra premium costs would vary widely by region.

In areas with high per capita Medicare spending, 80 percent of beneficiaries would pay higher premiums for coverage unless they switched plans, Kaiser said.