CBO: GOP budget raises health costs for retirees

WASHINGTON (AP) — Most future retirees would pay more for health care under a new House Republican budget proposal, according to an analysis by nonpartisan experts for Congress that could be an obstacle to GOP ambitions to tame federal deficits.

The fiscal blueprint would put people now 54 and younger in a different kind of health care program when they retire, unlike the Medicare that their parents and grandparents have known. Instead of coverage for a set of benefits prescribed from Washington, they’d get a federal payment to buy private insurance from a choice of government-regulated plans.

“A typical beneficiary would spend more for health care under the proposal,” the nonpartisan Congressional Budget Office estimated in an analysis released late Tuesday.

The sweeping fiscal plan by Rep. Paul D. Ryan, Wisconsin Republican, who is chairman of the House Budget Committee, would reduce total federal spending, deficits and debt, the budget office concluded. That means federal taxpayers would save money, but it would be tempered by a cost shift to future retirees.

The findings loom as a potentially big political headache for Republicans, who relentlessly criticized Medicare cuts in President Obama’s health care overhaul as part of their strategy to win back control of the House last fall. According to the budget office, the new GOP plan would leave most of those cuts in place.

GOP leaders want to move the budget quickly through the House, but it probably will hit a dead end in the Democratic-controlled Senate. A spokesman for Mr. Ryan said savings from the Medicare cuts would be plowed back into the program.

The budget office gave two reasons future retirees can expect to pay more. First, private plans would cost more than traditional Medicare because of such factors as higher administrative costs. Second, the federal contribution would grow more slowly than health-care-cost inflation, leaving a bigger gap for beneficiaries to pay.

Mr. Ryan calls his Medicare idea “premium support.” Critics call it the voucher plan.

“The ballgame in a premium support or voucher program is the level of support and how it is increased in the future, over time,” said Drew Altman, president of the nonpartisan Kaiser Family Foundation, an information clearinghouse on the health care system. “If it is not increased adequately, then seniors will pay more or get fewer benefits.”

The Ryan plan comes with other major health care changes:

Mr. Obama’s health insurance expansion to more than 30 million people who now lack coverage would be repealed.

• Medicaid, the federal-state program that covers low-income and severely disabled people, would be converted into a block-grant program that gives each state a lump sum to design its own insurance plans. But the poor no longer would have a right under federal law to health care.

• The coverage gap in the Medicare prescription drug benefit would be brought back. Mr. Obama’s health care law gradually eliminates the so-called doughnut hole. Mr. Ryan’s plan repeals that provision, the budget office analysis said.

• Future retirees would see an increase in the eligibility age for Medicare, currently set at 65. Starting in 2022, the eligibility age would rise by two months each year until it reaches 67 in 2033.

• Jury awards in medical malpractice cases would be limited, helping to reduce the practice of defensive medicine by doctors fearful of being sued. That would help lower health care costs.

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