3:21pm

Tue October 16, 2012
Health and Welfare

Kaiser Study Estimates Medicaid Costs Under Premium Support System

A Kaiser Family Foundation study has looked into what Medicare beneficiaries might pay under a "premium support" system that relies on competitive bidding, like the one proposed by House Budget Committee Chairman and Republican vice-presidential candidate Paul Ryan. Presidential nominee Mitt Romney has also supported a premium-support system, which allows beneficiaries to choose among competing plans.

Under such plans, if subscribers choose to enroll in a more costly plan, for whatever reason, they would pay the additional premiums. This differs from the current Medicare system, explains Kaiser, "in which beneficiaries generally pay the same Medicare premium regardless of where they live, whether they choose traditional Medicare or a private plan, or whether they live in a high-cost or low-cost area." Assuming full implementation of such a premium support system, and assuming current plan preferences among beneficiaries, the Kaiser study "estimates that:

  • Nearly six in 10 Medicare beneficiaries nationally could face higher premiums, assuming current plan preferences, including more than half of the beneficiaries enrolled in traditional Medicare and almost nine in 10 Medicare Advantage. Even if as many as a fourth of all beneficiaries moved into a low-cost plan offered in their area, more than a third of all beneficiaries would still face higher premiums.
  • Premiums for traditional Medicare would vary widely based on geography, with no increase for beneficiaries living in Alaska, Delaware, Hawaii, Wyoming, or Washington, D.C., but an average increase of at least $100 per month in California, Florida, Michigan, Nevada, New Jersey and New York. Such variations would exist even within a state, with traditional Medicare premiums remaining unchanged in California's San Francisco and Sacramento counties and rising by more than $200 per month in Los Angeles and Orange counties.
  • At least nine in 10 Medicare beneficiaries in Connecticut, Florida, Massachusetts and New Jersey would face higher premiums to keep their current benefits.

"This analysis does not attempt to model all aspects of any specific premium-support proposal, which would require more details than are currently available and assumptions about shifts in demographics, spending, and enrollment," Kaiser says. "The analysis also differs from Chairman Ryan's most recent proposal by assuming full implementation in 2010 (rather than a phased-in implementation starting in 2023) and by not exempting everyone who is at least 55 years old now." (Read more) To read the full report, go here.