About 59% of Medicare beneficiaries would have paid higher Medicare premiums in 2010 under a premium-support system if they had remained in their same plan and if such a model had been implemented, a new Kaiser Family Foundation study (PDF)
In their nearly 50-page analysis, authors Gretchen Jacobson, Tricia Neuman and Anthony Damico examined the premium-support approach that connects federal payments to the second-lowest cost plan offered in an area, or traditional Medicare—whichever is lower. The study acknowledged that while this model was included in House Budget Committee Chairman Paul Ryan's (R-Wis.) fiscal 2013 budget and embraced by former Massachusetts Gov. Mitt Romney, it “should not be interpreted as an analysis of any particular proposal, including the Romney-Ryan proposal” because that analysis would require more policy details, and it would also require certain assumptions about future shifts in factors such as demographics, spending and enrollment.
The reason nearly 60% of Medicare beneficiaries would have paid higher premiums, the authors contend, is because a majority of beneficiaries would be in plans or traditional Medicare that cost more than the benchmark plan in their area. About 4 in 10, or 41%, of beneficiaries would have paid the same amount or less in a premium-support system. For those beneficiaries in the traditional Medicare program, about 53%, or 18.5 million beneficiaries, would be expected to pay higher Medicare premiums for coverage under traditional Medicare “because about half of beneficiaries in the traditional Medicare program live in counties where traditional Medicare costs were higher than the benchmark,” the study noted.
Meanwhile, the portion of beneficiaries subjected to higher premiums—again, if they remained in their same plan—would vary considerably across the states, which the study emphasized is a change from the current program. Premiums for beneficiaries enrolled in traditional Medicare would rise on average by $60 per month under a premium support system. And while beneficiaries in Alaska, Delaware, Hawaii, Wyoming and Washington, D.C., would not see their premiums increase, average annual premiums for traditional Medicare would exceed $100 per month for beneficiaries in the states of California, Florida, Michigan, Nevada, New Jersey and New York. In Florida, premiums would exceed $200 per month.
“In high-cost counties (defined as counties in the top quartile of traditional Medicare per-capita costs), 80% of beneficiaries would pay higher premiums for Medicare coverage, unless they switched plans, because only a small share of enrollees in these counties are in a benchmark plan,” the study said.
With Medicare a hot policy topic in the current presidential campaign, the Obama administration was quick to post the Kaiser study on its website Monday
. The Romney campaign, meanwhile, distanced itself from the report.
“As the authors stress, this is not a study of the Romney-Ryan plan,” Andrea Saul, press secretary for the Romney campaign, said in an e-mail. “Our plan would always provide future beneficiaries guaranteed coverage options with no increase in out-of-pocket costs from today's Medicare.”