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Nuts and Bolts of Ryan Healthcare Plan Does Not Add Up

April 28, 2011

The Ryan plan is DOA as guess what — it is a losing proposition. It would add $230 billion to the deficit over the next decade and not reduce the deficit. Plus, it would directly hurt seniors in limiting access to healthcare and burden them with higher costs.

Let’s look at that last part… higher costs for you and me.

Let me give you a real world example. My regular readers know my mom is on Medicare and Medicaid. Medicare pays for her medical expenses and Medicaid pays for the nursing home and some medical expenses. I manage her monthly Social Security income – under $1100. Medicaid takes a Share of Cost of $849 a month. Medicare waives the premium once a person qualifies for Medicaid. You have to have spent down the majority of your assets to qualify — meaning, you have to be poor, to qualify. We pay under $10 a month for AARP Rx Prescription so she can still receive the brand names versus generic drugs. Up until the time she was placed in the nursing home in late 2009, she was paying for AARP Premium supplemental insurance. Let’s be clear. Medicare does not pay for everything. If you want to avoid bankruptcy when you have major surgery, heart attack, or cancer therapy, you must have supplemental insurance IN ADDITION TO MEDICARE. It is costly. You have your choice of tiered plans. We are talking $250 – $450 a month. My mom paid that right up until her last major heart attack. She had spent down her savings though and took on about $3500 in Rx debt because she was in the donut-hole of prescription coverage.

The Ryan plan would do away with Medicare guaranteed coverage. You would be on your own to buy primary health insurance. How much is that? Based on today’s plans and coverages: $400 — $1000 per month. That’s every month until you die. Where will that money come from once you cannot work? Social Security and your savings. The Ryan plan will provide a $15,000 a year voucher. My mom is required to pay $300 a day just for a stripped down semi-room. Medical is extra. The share of cost goes towards state Medicaid coverage plus most of the medical – not all. Hair care – extra. Podiatrist – extra. Certain tests – extra. Ok, so if you are in a nursing home without Medicaid and Medicare, in today’s dollars you can count on $9,000 a month PLUS the new health care premium $400 – $1000 that would replace Medicare’s nominal premium. A minimum of $9500 a month. Plus drugs. Plus some miscellaneous costs. That is for the rest of your life.

Now quick math shows you cannot make it with the $15k a year. It is not even close. Plus, if you chose the $400 a month plan, there is also the issue of deductibles and whether it is a 80/20 plan. That is the big catch. You could pay your premium and still be stuck with 20% owed on any costs not covered by your plan. Then, there are also the medical conditions simply not covered. So, the likelihood of assuming major medical debt obligation is very real.

We are all heading down this road. It may not be for 10, 20, or 30 years, but if you live long enough you get old, you stop working, and you will need assistance both medically and financially. It is hard enough with Medicare, but the Ryan plan is a ticket to the poorhouse and early death.

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