October 15, 2012
Kaiser study: Medicare costs would have risen with premium supports
A Kaiser Family Foundation study found that if a premium support plan had been put in place in 2010, more than half of Medicare beneficiaries would face a rise in premiums if they stayed with their current plan — including traditional Medicare.
The study, released Monday, doesn’t examine a specific proposal — and it posits 2010 as a start date, even though most of the plans being debated wouldn’t start for a number of years.
The study uses a sort of generic premium support model drawing on elements of Rep. Paul Ryan’s plans — those in the House budget and the one he presented with Sen. Ron Wyden (D-Ore.) as well as the deficit reduction plan proposed by Pete Domenici and Alice Rivlin. That model would link federal payments to the insurance plan with the second lowest cost in an area or traditional Medicare, if that cost is even lower.
Under this scenario, Kaiser found approximately six out of 10 people in Medicare would find themselves with higher premiums if they chose to stay with the same plan versus changing to a new private sector alternative.
About 53 percent of people on traditional Medicare would have higher premiums — an average of about $60 more per month. And 88 percent of beneficiaries in private plans would pay higher premiums — an average of about $87 more per month in premium costs.
One in four beneficiaries in traditional Medicare would have at least an additional $100 or more added to their current premium.
Analyzing the geographic impact of a premium support plan, Kaiser found that at least 90 percent of Medicare beneficiaries in Connecticut, Florida, Massachusetts and New Jersey would be hit with higher premiums.
And in California, Florida, Michigan, New Jersey, Nevada and New York, premiums for those on traditional Medicare would rise by an average $100 per month, at least — and in Florida, a minimum of $200 per month.
But in Alaska, Delaware, Hawaii and Wyoming, people in the traditional Medicare program would not be hit with higher costs.
“These findings underscore the potential for highly disparate effects of a premium support system for beneficiaries across the country,” the study states.
However, the study shows that if a quarter of Medicare enrollees facing higher costs enrolled in their area’s benchmark plan, then the percentage of beneficiaries with higher premiums would drop to about 35 percent.
View article here.