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Three Big Changes to Medicare in the Ryan Budget

The Medicare proposals in House Budget Committee Chairman Paul Ryan’s new budget are essentially the same as those in last year’s Ryan budget, our new paper explains.  Three particularly important provisions are:

  • Replacing guaranteed coverage with a voucher. The Ryan budget would replace Medicare’s guarantee of health coverage with a flat “premium support” payment, or voucher, that beneficiaries would use to buy either private health insurance or a form of traditional Medicare.  Premium support would apply to all new beneficiaries starting in 2024 and to all other beneficiaries who chose to participate.

    This would shift substantial costs to Medicare beneficiaries — especially for low-income beneficiaries also eligible for Medicaid.  The Ryan plan would eliminate the supplemental benefits and help with premium and cost-sharing they now get through Medicaid without providing an adequate replacement.

    Adopting premium support would also likely lead to the demise of traditional Medicare by making its pool of beneficiaries smaller, older, and sicker — and increasingly costly to cover.

  • Raising the eligibility age. Starting in 2024, the Ryan budget would raise Medicare’s eligibility age — now 65 — by two months per year until it reaches age 67 in 2034.  It also would repeal health reform.  As a result, many 65- and 66-year-olds would have neither Medicare nor access to health reform’s coming health insurance exchanges in which they could buy affordable coverage and receive subsidies to help them secure coverage if their incomes are low.
  • Rescinding health reform’s Medicare improvements. The Ryan budget would repeal health reform provisions that strengthen Medicare benefits, such as closing the gap in Medicare prescription drug coverage (known as the “donut hole”) and covering preventive services without cost sharing.  These repeals would adversely affect both current and future beneficiaries.