American Sauce: The Ryan Medicare Plan
May 31st, 2011
11:00 AM ET
11 years ago

American Sauce: The Ryan Medicare Plan

Capitol Hill (CNN) - As families make their 2011 summer plans, we here at American Sauce are thinking about 2011 summer politics. The Medicare plan from House Budget Chairman Paul Ryan, R-Wisconsin, is a clear, early contender, to dominate town halls and political barbecues.

What's in it? That is our podcast this week. Listen here. Comment below. Or keep reading.

True, the Ryan plan is not likely to become law in the next two years. Republicans do not have the votes in the Senate or the seat in the Oval Office. And recently, the party has seemed to lift its foot gently off the gas behind the Ryan Medicare Plan.

But RyMed, let's call it that for short, is one of the key pivot points for debate on Medicare. And it is a key political dividing line over government philosophy.

But to know what lawmakers' views mean, Americans need to understand what's in the plan.

Check out our "Explain It To Me" video here. Or the cheat sheet below.

CHEAT SHEET: Ryan Medicare Plan


– Starting in 2022, Medicare would privatize. Private health insurers would take over most of the functions government performs now for Medicare.
– In general, RyMed would affect Americans age 54 and younger. Those 55 and older would stay on the current version of Medicare.
– BUT, those 55 and older would be affected in the costs of prescription drugs. The Ryan plan reopens the "donut hole," a point in the cost curve where seniors must pay full price for their drugs.

What Happens To Each Person On Medicare

– Again, starting in 2022.
– Each person on Medicare would be allotted a certain dollar amount from the government to help them buy private health insurance.
– RyMed calls this a "premium support" payment.
– Next each person would chose from a list of government-approved private health insurance plans.
– Then the government's allotted payment for that Medicare recipient goes directly to the health insurer they chose.
– The Medicare recipient pays the difference between the insurance plans costs and what the government has allotted for them.

What Does That Mean? In Dollars?

– Here's how the Congressional Budget Office looked at that in dollars.
– CBO estimated that in 2022, the government would allot $8000 for a 65-year-old, to go toward buying a health insurance plan.
– CBO estimated that the 65-year-old would then pay an additional $12,500 for that plan and for all out-of-pocket costs.

Medicare Survival

– Medicare is running out of money.
– The latest forecast from Medicare trustees predicts Medicare will completely go through its trust fund by 2024.
– At that point, money coming into Medicare will not cover the costs of current benefits.
– The Ryan plan cuts the government's Medicare costs, thereby offering one way for the system to survive.
– Ryan argues that the system cannot continue with the amount of cash coming in and the much larger amount going out for costs.
– Critics point out that the Ryan plan shifts Medicare costs from government to the individual. Individuals continue paying into Medicare at current rates, but could face increased out-of-pocket costs for the same benefits they receive now.

How Much Government Will Pay (wonky but important)

– Under the Ryan plan, the government's Medicare payments would increase by no more than the rate of inflation each year.
– Ryan sets the inflation rate at CPI-U, the consumer price index for urban consumers. That is the broadest current CPI measure.
– Other Medicare plans (Simpson-Bowles, for example), tag Medicare cost increases to GDP or the growth in the economy.
– Depending on the economy, the Ryan measure could keep Medicare costs lower for the government. But it could thereby increase the out-of-pockets costs of individuals each year.

What We Don't Know

– How much costs will go up by age. The Ryan Medicare Plan allows insurers to charge more for older Medicare recipients. Thus, an 85-year-old could have significantly higher costs than a 65-year-old.
– What the benefits look like. RyMed stipulates that private insurers have to give Medicare recipients at least the same value of benefits that Members of Congress and other federal employees receive. What that means, specifically, is unclear.

What do you think of the Ryan plan? Did we miss anything?

Comment below.

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Filed under: American Sauce • Medicare • Paul Ryan
soundoff (36 Responses)
  1. Rick McDaniel

    Ryan simply would throw seniors to the "wolves"........the health care industry, who will rip them off, going and coming, and indeed, likely force them to commit suicide, because they can't pay the bills........of course, that IS his intention, in the first place, now isn't it? Just get rid of those "old" people.........they are "in the way".

    May 31, 2011 11:05 am at 11:05 am |
  2. apib

    20 billion a year for tax breaks to big oil. lets find OTHER places to slash BEFORE the healthcare of our old, sick and disabled.

    May 31, 2011 11:17 am at 11:17 am |
  3. prabha

    Ryan plan is meritorous but need to accomodate both quality improvement and cost efectiveness included in Affordable health Care Act. Combined vision is the most optimal. But then its my dream. Reality is that each party is blaming the messanger and message is thrown to the gutter. Only God can help us.

    May 31, 2011 11:17 am at 11:17 am |
  4. Republicans Are The American Taliban

    What does his plan mean to you middle class America? You're screwed....

    May 31, 2011 11:18 am at 11:18 am |
  5. mgc florida

    And just where is a senior citizen who is not working supposed to come up with $1,000 a month for premiums not to mention the cost of everything else including prescriptions if the donut hole is gone??? $12,500/year is not a small sum.

    May 31, 2011 11:22 am at 11:22 am |
  6. GOP-Tea Party Radical Social Engineering to Kill Grandma Medicare

    GW Bush touted this same plan a while back; that is privatising social security....and now the GOP-Tea Party aka Paul Ryan plan to KILL MEDICARE as we know it is also about privatizing medicare!!!

    The grand GOP-Tea Party Radical Social Engineering to Kill Grandma Medicare is fully at work here!!!

    I have been paying into social security & medicare since I started working @ the age of 16...while the politicians in Congress are stealing TAX PAYERS money from social security & medicare lock box to fund wars in Iraq, Afghanistan and anywhere else in the world they deem fit!

    Now the politicans and GOP-Tea Party are saying social security & medicare are BROKE!...and want to turn over the left overs dollar$ in the lock box & medicare over to their WALL STREET buddies and their rich fat cats to TRADE IT as a stock option to be traded in the STOCK MARKET!!!!

    Housing bubble, anyone? How well did that turn when we started trading bad mortgages & credit default swaps in the STOCK MARKET & 401K?

    Lehmann Brothers & Goldman Sachs went bankrupt and the bottom fell out of the US economy because they couldn't cover the insurance on those defaulted housing properties...and we are still suffering from that till today!!!

    Paul Ryans Radical Social Engineering to Kill Grandma Medicare...will once again lead to the US bailing out the health insurance companies & the stock market!


    May 31, 2011 11:22 am at 11:22 am |
  7. w l jones

    This privite med plan will create a bonanze for ceo. by 22 they will making twenty million a year plus bonus and a retirement plan after five years on the job.

    May 31, 2011 11:22 am at 11:22 am |
  8. Jeffrey Cole

    In otherwords, Ryan care puts seniors right back to where we were before Obamacare. The difference is that more than of the senirs won't be able to afford heath insurance when they get to be 65.

    May 31, 2011 11:24 am at 11:24 am |
  9. dep

    Voters over 25, the Ryan Plan will put the medical cost of your "Retired Parents medical cost on your back! Think about that? You,ll be in debt up to your eyballs in no time! just because retired folks can,t pay the bill, Your Responsible! Good Luck? I,m glad I,m not going to be you???? Beware!

    May 31, 2011 11:24 am at 11:24 am |
  10. sue

    Instead of cutting Medicare and putting such a burden on the elderly,poor and middle class, the GOP needs to get off the pot and cut the TAX cuts these BIG Oil companies and Big Busniess are getting......they are not serious unless they start making the Big Corporations start paying their fair share.....instead of making the poor, elderly, and the middle class take on this burden.......Remember it was these Republicans that sat by with their thumbs up their butts while Bush started this mess and now they talk like they have all the answers......well where were they when Bush was running up the debt? We wouldn't be in any better shape if the Republicans would have been in charge during these last couple years.....I think we would be in a worse least Obama has tried to help get this country back on it's feet, even thought the Republicans and Tea Nuts have tried to make hiim look like he has failed.......Democrats in 2012 will take back the House again and keep the Senate and keep the White House

    May 31, 2011 11:24 am at 11:24 am |
  11. Larry L

    Ryan's plan to "privatize" means give the money and the ability to control costs to the insurance and HMO industry. How well does the financial industry protect the consumer? When you look at developed countries you see health care provided by tax revenues. The Republicans use the word "socialism" to create a very negative picture in the minds of people who don't actually understand the issue – but they vote. The federal highway system is socialism if the term is to mean "funded by federal tax dollars". Should we privatize the highway system? How about the Army & Navy?

    The elephant in the room is the reality that health insurance can't be funded by the elderly. All Americans must contribute while they are healthy to create enough revenue to pay the bills. Tort reform will reduce medical costs and preventive medicine is absolutely a requirement. Americans are fat and our lifestyle promotes a death spiral of chronic illness. Obese people will ultimately cause our health care system to implode – with diabetes, heart disease, kidney disease, and a long list of other maladies poised to break the bank. Yelling about socialism won't make these truths go away. "Trusting" the insurance industry and the free market to solve the problems is absolutely ridiculous. Like it or not, a federal health care system is the only real option that can work.

    May 31, 2011 11:26 am at 11:26 am |
  12. John

    When Is It that this Idiot Paul Ryan will Understand that the American people DON"T WANT ANY THING TO DO WITH HIS PLAN PERIOD. I don't know why he don't get IT. I would rather pay more Taxes than to take away from the Old and The Poor and the disable. If he so worry about It why don't he have all Republican give up there health care and pay for It them self in stead of the American tax payer. Than the money you save and go to Medicare for the OLD. But you don't hear any body In the House and senate saying they would give there up. I just wonder how much that costing American people. And let not for get that he Till want to keep the BUSH tax cuts for the RICH. I say It Once and I say It again the PAUL RYAN PLAN IS A BUNCH OF CRAP. This man need to be kick out of the House In 2012, a long with a lot of other Republican. The Republican got the deficit this high with these two war they been fighting for Ten years ,and now they want the Middle Class,the POOR ,the OLD and the Disable to pay for It. That all Republican can do Is LIES, Just like In 2010 they run on finding JOBS and they haven't done the first thing to do anything about IT. It case you think giving the Rich More tax cuts ,that haven't work In the Past six years Is a good IDEA. Quit worrying about the Rich and Big Business and start worrying about the American People.

    May 31, 2011 11:27 am at 11:27 am |
  13. Mike

    Enron accounting, what the difference? Rob Peter to pay Paul. Reverse Robinhood.

    May 31, 2011 11:29 am at 11:29 am |
  14. Rudy NYC

    I am sorry. Inserting an entire industry of middlemen and middle companies into the money stream cannot save money. No way, no how. Save your breathe trying to convince me otherwise because simple human greed will trump any rationalization or reasoned argument that you could put forward. Period. Nothing against your reasoning to the contrary. It is just that greed does not follow reason or rational logic. Greed has a mind of its' own, and the RyanDoesntCare Plan is an example of greed following its' own mind.

    May 31, 2011 11:32 am at 11:32 am |
  15. tolron

    The issue is the demand for broad medical services and how much they cost. We need to find ways to drive down costs. Relying on the market will not work unless we change regulations. Our soldiers in combat rely on medics for most front line triage work. We need to use doctors only when doctors are needed. We need to stop the drive towards defensive medicine and to encourage the people to pay higher premiums for poor life style choices. This broad brush method will never work and no one will buy into it.

    May 31, 2011 11:32 am at 11:32 am |
  16. Outside Looking In

    Looks terrible. I cannot believe anyone would support this measure. The out of pocket costs alone would bankrupt seniors. Raise the Medicare tax a 1/2 % and problem solved.

    May 31, 2011 11:34 am at 11:34 am |
  17. Name king

    Hey it looks to me that the Ryan plan will allow Medicare recipeans to pay twice more money than what the government pays them. That's if you don't have a Cronic ilness, how the hell can a senior citizen with cornice ilness survive on $8000 dollar for medical bill. Hell that's one trip to the emergency room, are you people serious, 12 years from now medical cost is going to be way higher than what it is right now. How would that measly $8000 dollars look then. I don't believe how the repugs tricks these elderly folks so easy. Raise taxes and allow every one to share in the cost, and not put seniors on the side of the road to die.

    May 31, 2011 11:36 am at 11:36 am |

    Beats the Hades out of no plan at all like Obama has.
    "War is an ugly thing, but not the ugliest of things; the decayed and degraded state of moral and patriotic feeling which thinks nothing worth a war, is worse. A man who has nothing which he cares more about than he does about his personal safety is a miserable creature who has no chance at being free, unless made and kept so by the exertions of better men than himself."

    May 31, 2011 11:36 am at 11:36 am |
  19. diridi

    I do not know as to who voted for this idiot, he does not have any kind of vision for this nation....o.k, Spending cut is not advise on Medicare right now.....o.k, We are reeling economically to better need to focus on Manufacturing, Jobs, Energy efficiency, strict immigration, o.k, and Job Retraining, retraining, and retraining....we need to uplift our GDP first....o.k, take loan at lesser interest rate, and pay....these things we need...not GOP thugs mindless thinking...what an idiot...God bless this nation.....o.k, education, education, and education...

    May 31, 2011 11:38 am at 11:38 am |
  20. Michael

    If you vote conservative and call yourself a Christian, you need to read the book of James NOW. Chapter 2 and especially chapter 5. Don't worry, they are short. Now try to reason THAT one away.

    May 31, 2011 11:40 am at 11:40 am |
  21. Former Republican, now an Independent

    Paul Ryan should not be the subject of a barbeque, he should be the barbeque for trying to steal the money that hard working Americans have paid into Social Security and Medicare.

    May 31, 2011 11:41 am at 11:41 am |
  22. Bill

    Here's the part that Rep. Ryan doesnt get .... and I say this with the concession that the "half a loaf" approach he is taking has some merit .... healthcare for the elderly is waaaaaaaaaaaaaayyyyyyyyy more important that trillion dollar defense spending to change other countries into democracies ..... Whether or not Libya is a democracy or not DOES NOT MATTER .... leave these countries the hell alone and use the money to take care of elderly and mentally ill in this country desperate for care .... and oh, by the way, cap the profits pharmaceuticals and doctors can make .... $500,000 for a trans plant is obscene .... the salaries of these surgeons and pharmeceutical executives is morally wrong.

    May 31, 2011 11:47 am at 11:47 am |
  23. prabha

    I agree with what 'tolron' thinking. Either compromise and keep private plus federal support otherwise sooner or later we will have to accept universal health plan where the cost will be kept down by the health commission which is acceptable except Americans undestand their rights of freedom, liberty, and pursuit of happiness except that they dont want to pay to enjoy these and dont want to be bothered about the freedom, liberty and pursuit of happiness for their fellow citizens.

    May 31, 2011 11:52 am at 11:52 am |

    80% of Americans do Not want RyanCare, yet Mr. Ryan claims the polls are wrong because HE knows what Americans really want. Can you say IDIOT?

    May 31, 2011 11:54 am at 11:54 am |
  25. Randy, San Francisco

    The increases in cost for Medicare under the Ryan plan, additional $12,500 for the plan, full price for drugs, out of pocket expenses, and increasing cost of premiums as the recepient ages will prove to be too onerous of a burden to many seniors. The cost to seniors may be reduced by considering revenue generating options and higher deductibles and co-pays. The Medicare issue need not become the third rail of politics if both parties compromise on their ideology and bear the pain of making tough choices.

    May 31, 2011 11:58 am at 11:58 am |
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