It’s important to note that conservative Republicans have opposed Social Security, Medicare, and Medicaid since each program was established! Part two of this three part Medicare report reviews the major components of the Republican Medicare Reform Plan, provides analysis of the premium support proposal by the CBO and the Kaiser Family Health Foundation, and presents the Democrats argument.
Analysis by the Congressional Budget Office (CBO), which does budgetary analysis for both parties in Congress, concluded that Medicare beneficiaries coming into the Republicans Health Premium Support System after 2022 would spend significantly more for heath care under the Republicans private insurance plan:
- Traditional nonprofit FICA Medicare costs much less than private health insurance premiums because private insurance companies have significantly higher administrative costs, pay higher hospital and doctor’s fees than Medicare, and need to make a profit.
- The Republicans proposed direct federal health premium support payments to private insurance corporations, would increase much more slowly than private insurance premium increases, leaving more for Medicare beneficiaries to pay out of their social security and pension savings.
Using CBO projections, the Kaiser Family Health Foundation did the math and determined that if a person who turned 65 in 2022 were to remain in the traditional Medicare system, their out of pocket costs would be just $5,630 – a full $6,870 less than it would be under the Republican reform proposal. Kaiser explains it would cost more money to provide benefits under the Republican proposal because private health insurance plans traditionally pay higher fees to health care providers: hospitals and doctors, than FICA Medicare does”, and private health insurance plans have significantly higher administrative costs and profit requirements.
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Democrats argue that Republicans proposed “Health Insurance Premium Support” would not keep pace with rising health care costs because their health insurance support premiums would be linked to the consumer price index, which hasn’t grown nearly as fast as health care costs! Furthermore, Democrats argue the Republicans plan, which would make direct federal payments to private insurance corporations, amounts to a massive subsidy to private health insurance corporate profits!