-- THE RYAN PLAN --


(Fully Privatized Medicare for People 65 or Older, Where Seniors Have to Worry About Pre-Existing Conditions Making Their Medicare Unavailable or Astronomically Expensive)




To: FULL SITE CONTENTS (click here).

(10/2013) Back in November of 2012, Obama Won Reelection and the Senate stayed Democratic. The last obstacle (Romney and a Republican Senate) to enactment of Obamacare (=The Affordable Care Act) was taken away. (Well, actually just this month, Oct 2013, the Republicans did a surprise action "Repeal Obamacare or We'll Destroy the Country" by shutting down the government for two weeks (minor) and then threatening worse by not raising the debt ceiling, and knocking out 5% of consumption to the U.S. economy and really making the already bad jobs situation much worse). The Republicans seem to have lost this battle, (though they may do it again in 3 months) and Obamacare goes into effect in January, with exchanges already open. (The internet-site version of the exchanges to find and buy insurance used in many states got messed up technically, and this could be so for a while, but that's a pretty minor problem in the scheme of things: there is maybe 20 hours of time on the site wasted for some, but that's small compared to millions of people going broke in medical bankruptcy, and, of course, dying from lack of health insurance. I live in Massachusetts, the only state that already has its own version Obamacare, and last time, on the first day of enrollment time, the MA internet site was overloaded with users, and kicked me out, but I just enrolled on paper, and 7 days later I had my proof of enrollment back in the mail.)

The main provisions of the Obamacare law are that health insurers may no longer deny coverage or charge more for people with pre-existing conditions, or exclude coverage of pre-existing conditions. Further, people with lower incomes get partial or complete subsidies (on a sliding scale according to income and family size) so they can afford to buy the health insurance (with major exception (1), as below). There are some real potential problems ahead, which are all, I am sorry to say, due to Republicans.


(1)MAJOR EXCEPTION TO AFFORDABILITY: in 26 Republican states the state's Republican governor and/or legislatures have exercised their option, given in the (unexpected) June 2012 Supreme Court decision on ObamaCare, not to extend coverage to a large group of low-income people
(the group being people not so extremely poor as to be covered under pre-Obamacare-extended Medicaid but still very low income: income to about 130% of the poverty line -- the extension of Medicaid is how those particular people were supposed to have gotten their full subsidies in the enacted ObamaCare law). (See the state-by-state Obamacare-Medicare-Extension status here.) The state Republicans are choosing to not extend Medicaid even though 90% of the cost of covering those people would be paid for by the Federal Government as a provision of ObamaCare. And even though most of those people don't now get Medicaid simply because they work and make a little too much to be dirt-poor to qualify under pre-extension rules for Medicaid. (These people who will be denied health insurance in those Red States are often called the "working poor", and may be about 10% of the population in those states. Thus, those folks can keep getting whatever care they can get at the emergency room, and accept not being able to save any money if the emergency-room and hospital sends them humongous bills.) Those Red States' health care coverage will not be 98% (as in MA where I live, now, with its own version of ObamaCare in effect for several years) but maybe only 88% without those working poor having coverage.

(2)REPUBLICANS HAVE THE POWER TO, AND WILL, BLOCK ANY NEEDED ADJUSTMENTS TO THE LAW: Until at least 2016, and possibly for many years longer, the majority of members of the House of Representatives will be Republicans. They will undoubtedly block any changes to Obamacare, instead saying "tough luck, no changes, you must just repeal it".


(3)REPUBLICANS CAN NOT NOW, BUT MAY, AT ANY TIME AFTER THE ELECTIONS OF 2016, HAVE THE POWER TO REPEAL OBAMACARE AND GO BACK TO THE PRE-EXISTING-CONDITION-SCREENED SYSTEM.
They indeed might do it, particuraly if by not allowing changes they can force it to mess up. Thus, I plan to stay here in Massachusetts, the only state where we have already our own version of Obamacare, at least until the results of the November 2024 election.
The Site is About Managing Pre-Existing-Condition Health Insurance Issues Under the Current System, The Passed-in-2010 Effective-In-2014 Obama Health Insurance Reform, and the Republican (Including Mitt Romney--even after 6/28/12 Supreme Court Law-Is-Constitutional Decision) Efforts to Repeal the Reform.

The Obama Reform Will Completely Do Away With Pre-Existing-Condition Health Insurance Issues starting in 2014. (That Is, Pre-Existing Conditions Will Not Be Allowed As Grounds for Claim Non-Payment, Higher Rates, Non-Coverage, Condition Exclusion from Coverage, or Policy Recision.)

However, if the Republican Repeal Efforts Succeed, the country Will Continue to Be the Only Developed Country With Medical-Financial-Wipeout Risk Due to Pre-Existing-Conditions Traps, Inter-State Moves, Job Changes, and Job Loss. (All Republican Proposed "Replacements" to Obama Care are Minor and Keep Pre-Exisiting Conditions As An Allowed Reason for Insurance to Deny Coverage, Deny Claims, Charge Higher Rates, etc.)

The site includes tables for ASSESSING YOUR OWN (BY-STATE) RISK OF MEDICAL FINANCIAL WIPEOUT / ILLNESS NON=TREATMENT
Due to Pre-Existing-Conditions Issues




[NOTE Ryan Plan vs Wyden-Ryan vs "Path to Prosperity": The Ryan Medicare Plan was proposed in 2010 as a detailed bill, which most definitely has the private insurance plans allowed to charge higher rates for seniors with pre-existing conditions. (Specifically, it allocated a larger voucher amount to purchase private insurance for people with serious pre-existing-conditions, but without any provisions that the amount the voucher would be enlarged would be as much as the additional amount the insurance company would charge for a pre-existing condition.)

Some sources indicate that the original 2010 Ryan Medicare plan (here) should be considered superseded by the Wyden-Ryan plan of December, 2011 (here), which was floated jointly by Ryan and a Democrat as a "bipartisan option for the future". The sources, accepting -- I am not sure why -- that Ryan now endorses the later "bipartisan option", in any case interpret Wyden-Ryan as switching away from pre-existing-condition-screening being allowed. I am not convinced that it actually switches away, however. Firstly, unlike the original Ryan Plan, we have no detailed proposed law, just a "brochure" that leaves wiggle room. More importantly, on the detail of whether people with pre-existing-conditions will pay more, the brochure says on p.8 "community rating" but immediately clarifies or defines that term with "(i.e. inability to impose prohibitively disparate costs on seniors)"--the italics are mine. On the next page, I also see, "The federal contribution to seniors’ health plans would be risk-adjusted so that the sickest seniors are protected from high premiums as well as adverse selection from insurers. Building on the risk adjustment tools currently used by the Centers for Medicare and Medicaid Services (CMS), proper risk adjustment would ensure that seniors with the highest health costs would still be able to find an affordable plan" (italics mine): another suggestion that rates charged vary based on health. Note the use of the legally vacuous word "affordable". Yes, the proposal's subsidies do vary based on health, but if the subsidy covers say 60% of actuarial health-based cost, people with serious pre-existing conditions may still need to make humongous payments to cover the remaining 40% of that actuarial cost. Based on prior Republican tricks based on hoping for misreading of language (like the one in the legal text of original Ryan plan documented here, where a big heading is labelled "Benefit Parity with Members of Congress" but the meaning below the heading provides for no such thing), I really do suspect the legal minds involved in this brochure likely have crafted in some deception here, to permit the profitable state for insurers of winding up with a disproportionate amount of the healthiest people to insure, and further, to keep the sickest seniors out of the system by having many of them unable to pay their share of their higher premium. I believe some of the unbiased analysis sources, such as Kaiser Foundation (here), may have missed that ambiguity in the Wyden-Ryan brochure's plan.

There is also, later than Ryan-Wyden, another brochure, this one Republican Only, "The Path to Prosperity" from the House Budget Committee with Chairman Paul Ryan's name on the cover (here). If you go to p. 53, you see that on pre-existing-conditions, it has the same language as Wyden-Ryan, which, as before, may not actually mean seniors with pre-existing-conditions can't pay much higher rates. There is also, a few days later from Ryan's Committee, this less-brochure-looking "Concurrent Resolution on the Budger"(here). On page 97 "The Medicare premium-support payment would be adjusted so that the sick would receive higher payments if their conditions worsened"--this does not say the patient share of premium cannot be higher for people with pre-existing conditions.

In any case, if Ryan now intends to abandon his original different-rates-for-pre-existing-conditions Ryan Plan, he needs to make that clear, as well as indicate the new plan he is now behind, and its premium-with-pre-existing-condition status, in an unambiguous public statement. (Even if he and the Republicans can be made to go so far as to sign one of their "pledges" not to ever have rates be higher for Medicare recipients with pre-existing-conditions, we should still beware that the later Ryan Budget repeals ObamaCare and raises Medicare age to 67, so under them we all still have two extra years in the pre-existing-conditions nightmare of the current, pre-ObamaCare system, with those years, due to high age, being very expensive when there are serious pre-existing-conditions.)

Incidentally, when you manage to find a Republican policy advisor talking any sense at all about the Ryan plan (rather than the usual "socialism", "invasion of freedom") the core of the argument for the Ryan voucher-privatization of Medicare is that private insurers have more freedom than the government to force efficiencies, and also control the giving of care when it has just too little bang for the buck (e.g. $300,000 for procedures giving only a year of life). This fundamental idea of course does make sense. If we could trust that the Ryan Medicare Plan would in fact manage to get passed by Republicans with older senior citizens, and seniors with pre-existing conditions, not paying much more (questionable--Republicans have shown the pattern over the last 30 years of taking everything they can get, and pushing health insurance more and more into the Wild West rules), and if the Democratic objection that seniors would still pay too much under Ryan Medicare, could get taken care of (with somewhat higher premium subsidy), than the outline of the Ryan Medicare Plan for Medicare would seem to be O.K. Except, however, the current crop of Republicans are so Wild West that it is very important that the insurance policies sold under Ryan Medicare would have regulations which are both skillfully crafted and quickly adaptive and tunable to observations of how things are going. (The reason is sort of technical, very mathematical people like me who have proved a lot of mathematics can see it, as well as some others in business who think of ways to game, or else prevent gaming of the system. It winds up that you could have gaming by some less ethical insurance companies, for example by giving really good treatment to people who were not very sick, but really being miserable to expensive sicker people -- giving them higher profits in response to this bad behavior which just puts insurance out there that no one can rely on if they become more than slightly sick. In any case, skillful, perceptive regulators can anticipate or otherwise identify when it happens this gaming, and defeat it with appropriate responses as long as they are given the resources and legal right to do so.) In any case, the current crop of Republicans has shown themselves again and again to be against almost all regulation in health insurance, and whenever we do have legal provisions for regulation in any area of anything (say banking), Republicans defund it to make it ineffective, nonadaptive, and non-skillful regulation. Thus, there is much too much risk that Republicans would allow a Ryan Plan (regulated purchasable private insurance) with well-enough-crafted regulations. Rather, there would be Wild West regulations, or no regulations.

Yet further, the Ryan Plan calls for the repeal of ObamaCare (even before the main provisions go into effect in 2014), and as well the raising of Medicare age to 67 from 65. Now, if private insurance that people can pick from several options, where premiums do not depend on pre-existing conditions, is actually the Republican goal for Medicare (the best-case scenario of what Ryan-Plan or Republican Medicare might wind up being), then why the heck won't they allow the same thing, already passed ObamaCare, for people under 67? (ObamaCare is in fact set up pretty much like best-situation Ryan Medicare, with the mandate to carry insurance for people who can afford it being an economically similar funding mechanism compared to, for Ryan-Medicare, payroll taxes withheld as partial premium during prior-to-coverage years.) Really, all you can come up with, if you follow the proposals, and understand the technical mechanisms with health insurance, is that getting the system to work well and keeping people from become bankrupt and being sick and untreated is of no interest to the current crop of Republicans. What the Republicans apparently want to do is to take any particular group, look at what that particular group has now for health insurance, and move what that group has continuously closer and closer to rabble-manipulator and Republican spokesman Grover Norquist's declared vision -- something, that for the 300 million plus citizens of the country, can be completely paid for and administered by "a government that is sufficiently small to be drowned in the bathtub" (verify quote here).

Thus, one group of people is the Medicare group (people over 65 soon 67 under Ryan). Another is the Medicaid group (for very poor people sometimes also requiring them to have young children to get any coverage; this group of people also includes many elders, as Medicaid pays for elders to be in nursing homes when they have qualified by already having spent away the rest their assets on medical care and nursing homes). There is also a the-rest-of us-group (covered by a chaotic patchwork of miscellaneous laws, programs, and employer-provided-insurance actuarial rules varying over each and every state). The current crop of Republicans wants look at whatever each given group of people has for health insurance, and methodically, and as much as they can get it away with it at any given time, they want to move it closer and closer to something that, adding up over the more than 300 million people in the country, can be drowned in a bathtub. (If you follow the issue and think it through, no other explanation fits.) The Republicans intend to, as much as they can get away with it, move the insurance for each group of people continuously toward the one-bathtub-sized-sheriff-and-bank-for-the-whole-Wild West system. They are a bunch of Wild West hooligans. (Well, maybe at best, some of them really don't understand the technical issues and mechanisms with health insurance, which is said by Republican apologists for Paul Ryan on his initial Ryan Medicare Plans, even though Ryan even had some undergraduate economics courses. So perhaps some of these Republicans are not truly hooligans and sociopaths but they act like hooligans and sociopaths because they don't have a grasp on, or knack for, the technical issues, and go with some of the nonsense fed to them by the true hooligans, sociopaths, and the idiots and clowns in the rest of the Republican motley crew.)

The rest of this page references the original Ryan Medicare Plan, not the more-sketchily-detailed Wyden-Ryan plan.]




(The general outline of the Medicare under the Ryan Plan is that it is a privatization of Medicare with seniors being given a limited voucher to purchase private-insurer, pre-existing-condition-screened health insurance. Any guarantees of health insurance availability, and limitations on the higher rates that people without sound prior-employer retiree insurance will pay when they have a pre-existing condition, falls to the states with whatever high-risk pools they choose to construct--this reliance on state high-risk-pools is working out pretty miserably for people under 65 right now if you check through this by-state table . )


Details on the Republican Ryan plan: The only place to really get the details is in the proposed bill itself (here; you can verify my link from here), rather than the "brochures", which mislead and leave a lot out. The Medicare portion is in pp 255-337, with numerous references to sections of the US code (here), and the Internal Revenue code (which is just title 26 of the U.S. code at the previous link). Further, there are references to Sections numbered between 1800 to 1900, which refer not to the US code, but Title XVIII of the Social Security Act of 1965, to be found here. I admit to being defeated in my attempt to understand the full details and implications of the long and complicated Ryan bill. Besides the repeal of the Obama reform law, thus keeping the pre-existing-condition-screened-system for people under 65 beyond 2014 when the current Obama law kicks in, I've noted a few very worrisome things about it:

(1)Medicare age rises by 2027 to 67 year and 1 month from the current 65 (In the much longer term it rises to 69 and 1/2; p. 266-267). This, along with the Obama-reform repeal which is in the Ryan bill, keeps people in the pre-existing-condition-screened pre-Medicare-age mess for longer, without a subsidy, and at an expensive age. (And I wonder if employers will be eager to fill in that 65-67 or 65-69 insurance gap for everyone.)

(2)Current Medicare, covering people 65 and older, does not have or allow screening for pre-existing-conditions. However, under Ryan's new Medicare, insurers will be allowed to charge more on Medicare for people with pre-existing conditions. (See pp. 255-267 of the bill. Health insurance pre-existing-condition protection, even for Medicare people,under the new Ryan Replublican Medicare falls back to the protections in pp. 9-16 of the bill. This is basically the current system of state-optional high-risk-pools (pp 13-14 of the bill) without mandated coverage that now (pre-2014-Obama-Reform-kickin) is used for people below 65, which has large availability, affordability, and "death spiral" problems. Do not be fooled by the requirements of insurance to meet the requirements of section 9801 of the IRS code of 1986 (here's a link to that )-- the wording might make you feel secure if you have a pre-existing condition, but when you read carefully and think it through, the insurance company is not stopped from setting the premium higher or much higher for people with pre-existing conditions. (As another way of seeing this, if charging higher rates for people with pre-existing conditions under Ryan's Medicare was not allowed, the state options given on pp. 13 and 14 of the Ryan bill would not be needed.) Additionally to me, the internet official sites, such as the Time mag listing here--look at the last paragraph under the heading "It Makes Medicare Voluntary"), there is further confirmation. So, we are bringing old people now into the same pre-existing-conditions-hell that younger people are in. Except more of a hell, because 88-year-old people have, typically, a lot more pre-existing conditions, and sometimes they even can't remember them all, and when they do write them down sometimes they lose the lists. (To see how those rates may look for high-risk Medicare people, note that in CT now for people under 65, the best high-risk pool rates are these MONTHLY rates, where each high-risk individual should also count on paying an additional $7500 out-of-pocket maximum each year (as in the brochure, p. 4.) I come out with about $13,000 a year for one 25 year old high-risk male, and about $29,000 a year for one 62 year old high risk male. At the moment, the table does not cover 84 year old high-risk males because they are covered under Medicare, but under Ryan's plan they will need to be added to the table. What will the rate be do you think, for the high-risk people under the new Republican Ryan Medicare? (Yes, Ryan's bill provides for a higher subsidy from the Federal Government for people of Medicare age with pre-existing conditions (p. 261), but it then falls on each state to actually set up a high risk pool and determine rates (pp. 13-14). Whether those rates greatly exceed the subsidy is up to the states, and for the most-part now the states are generally doing a horrible job of maintaining health insurance availability for the middle class with their current high risk pools, due, of course, to the fact that it would cost money to do so. Thus, 3 years ago, when I went through state-by-state and made this table, I found that just on the always-being-available issue of any insurance on major pre-existing conditions for people who had responsibly maintained insurance all of their lives prior, 23 of 50 states had a problem if people didn't move between states, and 37 of 50 had a problem if people did move between states. The problems are indicated in the table with my red "Danger"s. This is when you don't even count available insurance for pre-existing-conditions people that is just too expensive. Thus, the state of Connecticut, with pretty high rates above, passed in my analysis because the insurance was at least available. Yet additionally, there are problems in many states where the state makes it just not pay to have worked and saved, due to local political pressures and often technical competence issues in the state government. Again, Connecticut serves as one example: for this insurance, you see that a 62-year old male making $32,660. a year or less saves 12x($3416.02-$1152.63)=$27,160.68 a year vs. a person of the same age making a few hundred dollars more.)

(3)Representative Ryan is being awfully-damned-deceptive about what he's doing to Medicare--for example in this PBS Newshour interview he asserts "Medicare Advantage is nothing different than what I'm talking about, which is about 20 percent of Medicare beneficiaries get comprehensive private plans." (Ryan part 3 in the transcript). Ryan's assertion is very misleading. Medicare Advantage policies are not allowed to screen for pre-existing conditions, which is allowed in Ryan's plan. People with pre-existing conditions pay more, perhaps a lot more, and perhaps can't get coverage at all. And they may have to worry about getting coverage denied altogether when they have a policy, because of a pre-existing condition they forgot to put down on the original application for insurance (like the result of an obscure lab-test). I also find fault in this remark in the same transcript "So future seniors, 54 and below, will get a list of Medicare-approved plans kind of like how it works today but for all of Medicare. And it's a system that works identical to the one members of Congress and federal employees have." The comparison to the coverage of Members of Congress and Federal Employees is terribly misleading -- members of Congress and Federal employees aren't screened for pre-existing conditions and don't pay more if they have pre-existing conditions, and don't have to worry about a missed pre-existing condition being reason for claim denial.
(3b) The brazenness of Ryan's and the Republicans' deception is perhaps most concisely shown here:In the PBS Newshour interview, he promotes that Medicare people will be getting coverage like "Members of Congress" under his plan. I scanned the Ryan bill for "Members of Congress", and it is found on p. 11 of the bill, and we have this: "BENEFIT PARITY WITH MEMBERS OF CONGRESS.—With respect to health insurance issuers offering health insurance coverage through the State Exchange, the State shall not impose any requirement that such issuers provide coverage that includes benefits different than requirements on plans offered to Members of Congress under chapter 89 of title 5, United States Code." . Certainly the heading "BENEFIT PARITY WITH MEMBERS OF CONGRESS" will sell those inclined towards a superficial glance at the bill, but those reading farther, and competent in the English language, will see that it says the government won't prohibit an insurance company from giving you the same coverage as members of Congress get if the insurance company is so inclined. Didn't Jack Abramoff get brazen like this before he got discovered?
(Besides the section quoted above being intended to mislead, as a non-lawyer, I suspect it might be tied to an additional purpose of limiting state requirements on insurance in some complicated way that perhaps even the courts would have to decide. I'm not a lawyer. For interested lawyers, here is a link to Chapter 89 of title 5.)
I also noted

(4) "SEC. 313. ELIMINATION OF INDEXING OF INCOME THRESHOLDS FOR PART B INCOME-RELATED PREMIUMS", on p. 276, which suggests a gradual withering away of a certain subsidy due to inflation.

(5)Let me point out that the means-testing for Medicare means people with higher middle income seniors will pay more, and certainly more than they do now. This seems sort of OK, but a lot of these extreme means-tested Republican approaches, despite Republican rhetoric, make it not pay to work and save. What it does is hold benefits down to people who have earned and saved less, little, or no money. Thus, we get like the current system for pre-Medicare people, where most dirt-poor people don't have to either pay or worry about pre-existing conditions, and everyone else who is not rich has to worry about paying and pre-existing conditions.

(6)The switch from a single payer government (currently covering 80% of Medicare people) to private payers is questionable, in that currently non-pre-existing-condition-screened private Medicare Advantage (that 20% of Medicare people now choose) costs the government 12%-13% more than than the single-payer government version (as reported here). But worse, since the Ryan plan allows pre-existing-condition screening, the comparison gets even worse, since the history of pre-existing-conditioned screened individually-sold insurance is to payout only 60%-75% for medical bills of the premium dollars payed in, as against 97%-98% for the current standard Medicare.Though Republicans might claim throwing 15%-40% of Medicare money at insurance companies to keep and not pay out in claims (vs. only 2%-3% kept by the government for the 80% of Medicare people on standard Medicare now) is good policy, as they claim the insurance companies will figure out ways to control costs, we might certainly be skeptical.


[U.S. Government Debt-Spiral Note: The author of this site is aware of the looming government debt crisis, and wants to be clear that he supports the tough, painful decisions that need to be made (a la Bowles-Simpson) and which indeed the special-interest-infested political system and electorate are not making.

My objection to the Ryan plan is not that it inflicts pain, is austere, etc., but rather that it supplies pre-existing-condition-screened insurance to people over 65. (You observe this if you read the bill--here--carefully.) Pre-existing-condition-screened insurance is just lousy insurance, which leaves people who have worked and saved to go bankrupt if they get sick for a long time. I would accept austerity of a "premium-support" plan like the Ryan plan if the associated insurance is not pre-existing-condition dependent. Indeed, there needs to be pain in the measures necessary to control the U.S. debt, but the point is to act sensibly, and not have the pain be mainly by personally bankrupting say 10% of people over 65. The author of this site is not opposed to the necessary austerity -- indeed there will need to be some extra physical discomfort and a bit of earlier death and cutting back on luxuries for the over-65-crowd, but the author wishes to avoid excessive risk volatility amd punishments on people who work and save. This is the apparent consequence of much in our current health care system and state/Federal financing, and many of the Republican proposals, including much of the means-testing (only when such means testing is poorly crafted).]



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