In the wake of Republican Paul Ryan’s budget proposal, more information is becoming available on the impact a proposal to privatize Medicare would have on seniors. Ryan has touted his plan to issue seniors vouchers that they can use to purchase health care on the open market, claiming it would help rein in the cost of the out-of-control beast known as Medicare.
However, the Congressional Budget Office has a different prediction for the vouchers proposal: that it would double the cost of care for seniors to $12, 510 per year. According to an independent analysis by the CBO, Ryan’s plan to phase in privatization of Medicare beginning in 2022 would set off a dramatic increase in the cost of senior health care, an assessment in stark contradiction to Ryan’s claim.
This would occur, says the CBO, because of a number of factors, including the fact that private health insurance companies cost more to run than Medicare. But a further burden borne by private companies is the one involving profit, a factor that is not an issue in government-run plan.
Furthermore, according to the CBO, the increase in health care costs would not be limited to seniors. The CBO asserts that adding millions of seniors to the private health care insurance market would prompt a spike in costs for all Americans.
The basis for Ryan’s claims is the Republican mantra that free-market competition for health care dollars will lower costs. However, many health care economists dismiss this argument because people do not shop for health care the way they shop for other goods and services.