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The Romney-Ryan Budget: Turning Medicare Into a Boon for the Insurance Industry and a Bust for Seniors

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This is Part 3 in a series. Find previous parts here.

At a July 11 press conference announcing NOW's endorsement of President Barack Obama, a reporter asked about Mitt Romney's message on the economy, and I suggested that the GOP candidate "bring it" -- that feminists are ready to have a substantive conversation about Romney's economic ideas and the impact they would have on women if he were elected.

Exactly one month later Romney did indeed bring it -- the pain, that is -- by choosing Rep. Paul Ryan as his vice presidential running mate and supply-side soul mate. Ryan is the author of the deeply unpopular House budget plan, now appropriately referred to as the Romney-Ryan plan.

I've already addressed what the GOP team has in store for women's health care, so now I want to talk about Medicare. A lot of confusing, contradictory information on the future of Medicare is being lobbed at us right now via the opposing campaigns, their surrogates and the media. So I'd like to get to the heart of the matter, to what women and their families will experience if Romney and Ryan get their way.

First off: Although the Romney-Ryan budget plan goes to some length trying to disguise it, the reality is that converting Medicare to a privatized voucher system is a key element of the Romney-Ryan scheme.

In other words, take health care coverage for retirees out of the hands of the U.S. government, where it has worked comparatively well, and shift it to the private market, which has proven to be a high-cost failure for most everyone else. Oh, and simultaneously repeal Obamacare, so the array of benefits that recently became available to seniors, often without co-pays or deductibles, disappears. Women especially should beware. Senior women's median annual income is shockingly low: just $15,282, compared with $25,877 for men. Where are senior women supposed to find the resources to pay the extra costs for their health care?

Remember, Medicare isn't designed to make a profit, while that is the main mission of private companies -- to produce lots of money for their investors. The health outcomes of seniors are secondary to private insurers. The reason Medicare was introduced in the first place is because, as we age, we have less income just as we start developing more health issues and needs. This is when we need stability, reliability and affordability most in our health coverage.

But the Romney-Ryan budget prods seniors into taking their chances in the private market, which is exactly where the right-wing always funnels public money whenever it can. And what a favor they're doing for retirees: Isn't that how all of us want to spend our golden years -- shopping for health insurance that won't break us financially yet will provide all the services we require (or think we will require, because we can't know in advance what health condition might emerge next).

One thing we do know is that older women's health care needs are greater than men's. That's partly because women are more likely than men to experience physical limitations and to suffer from chronic conditions like arthritis, hypertension and osteoporosis. Moreover, according to the National Women's Law Center, nearly half of women with Medicare report having three or more chronic conditions; just 38 percent of men do. These conditions require medications, so it's especially important for women to have drug coverage under Medicare. But the Romney-Ryan Medicare plan makes it harder for women to get the medications they need. Remember the "donut hole" -- the gap in drug coverage that requires seniors to pay out of pocket once their medication costs have reached a certain level? In 2007, 64 percent of those affected by the donut hole were women. Obamacare closes the donut hole. The Romney-Ryan plan, by repealing Obamacare, opens it right back up again.

Oh, and the Romney-Ryan plan also raises the Medicare eligibility age to 67, leaving millions of retired seniors high and dry -- without employer-based health care, relegated to the private health insurance market during the interim. And because the Romney-Ryan scheme repeals Obamacare, insurers would go right back to refusing coverage based on "pre-existing conditions," and wouldn't be required to cover life-saving preventive services like mammograms, bone scans and screenings for a range of conditions (heart disease, high blood pressure and cervical cancer, for example) without co-pays.

Imagine a woman in her 60s or 70s -- who may already have health conditions in need of consistent supervision and treatment -- laboring to discern what each private plan available has to offer. She has a government-issued voucher, or as Romney-Ryan now call it, a "premium-support payment," for a fixed amount of money. What information will she have to help her judge whether or not a private plan's rate is truly a good buy? The price might look right compared to her voucher, but what extra costs might pile up down the line?

Do we think for a moment that these companies are going to be completely forthcoming about what services their policies cover and what extra costs are involved, thereby allowing this woman to make a thoroughly informed decision? The sub-prime mortgage crisis offers an important lesson here: Big companies cannot be trusted to police themselves and act in the best interest of the consumer. The Romney-Ryan plan contains no failsafe to prevent analogous scams being run on future retirees.

And just how easy will it be for this woman to move from one plan to another until she finds one that suits her budget and health needs the best? Will her doctors accept all of the competing plans, or will she need to switch providers as well? Romney and Ryan use terms like "empowering" and "the power of choice" to describe this process, but it sounds exhausting and is in fact risky and cost-inefficient. Please note that according to the Romney-Ryan plan, the competition factor is what would drive down health care costs, so their system only works if seniors flock to insurers that do a good job and drop ones that aren't delivering. Not that this approach has ever worked to contain costs in the larger health care market, but don't mind that small detail.

Now wait, you ask: Doesn't the Romney-Ryan plan include an option for retirees to stick with the tried-and-true "traditional" Medicare? The answer is that the option to stay with Medicare is set up to fail. In other words, after the huge blowback against Ryan's original plan to voucherize Medicare, this most recent version now gets there in several steps rather than in one giant leap. But the end result is the same. After all, the GOP platform tells us in black and white just what the wizards are up to -- moving Medicare (and Medicaid) to the private market.

The Romney-Ryan plan claims this major Medicare overhaul would not go into effect until 2023, so that people 55 and over wouldn't be affected, but that turns out to be not quite true: Despite the delayed implementation, if this plan were to be enacted along with repeal of Obamacare during a Romney-Ryan administration, out-of-pocket costs for all people on Medicare would start going up almost immediately.

Here's another clue that these guys' pants are seriously on fire: Surely you've seen the Romney TV ads charging President Obama with viciously cutting $716 billion from Medicare in order to fund health care reform. Romney promises to restore those funds, but what the ads don't tell you is that Obama's cuts don't affect benefits, only over-payments to insurers, providers and hospitals. The president's cuts responsibly address inefficiency and waste. The New York Times reports that repealing those cuts would "immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries."

Finally, don't be fooled into thinking that a privatized Medicare with seniors paying for more of their health care is needed to somehow control rising health care costs. The truth is, the Romney-Ryan budget plan undermines Medicare -- and many other essential social programs -- in order to pay for increased military spending and enhanced tax breaks for millionaires and billionaires. No meaningful reduction in the federal budget, and certainly no reining in of runaway health insurance costs are included.

In my first post in this series, I introduced Linda and her daughter Emily. Linda retired with no savings, no 401(k) and no pension. She didn't save much from the low-wage jobs she worked, and today she relies on Social Security for more than 90 percent of her monthly income. Without traditional Medicare, she would not be able to afford health coverage, and Emily would be exhausting her own savings and salary helping out her mother. That is exactly where the Romney-Ryan plan would leave Linda and Emily: stuck in a cycle of economic insecurity that gets passed from one generation to the next.

When President Lyndon Johnson signed Medicare into law in 1965, he said: "No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime."

Our nation has the ability to protect and enhance President Johnson's vision of health care for all. But the Romney-Ryan plan to convert Medicare to a private voucher system takes us in exactly the wrong direction.

Next time: What the Romney-Ryan budget plan's scheme for Medicaid means for women.

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