Politics aside, changes ahead for Medicare

Amid the partisan squabbling over plans to rein in the cost of federal health care for the elderly, there's one certainty: You're not going to get your grandmother's Medicare.

Democrats charge the House Republican plan would end Medicare as Americans have known it. Republicans say "Obamacare" -- their name for the health care overhaul passed last year -- is cutting Medicare benefits.

In reality, both the law signed by President Barack Obama and the plan devised by Rep. Paul Ryan (R-Wis.), which House Republicans passed this year, would change how Medicare delivers and pays for health care for the elderly, experts say.

Both raise premiums and other expenses for more affluent seniors, which could affect many on Long Island, where incomes and costs are higher than the national average.

But key analyses and studies also say Medicare beneficiaries will pay more of the cost of care under the Ryan plan than under the Obama law.

"There is no question that both sides, the Democrats and Republicans, see the need to bend the cost curve," said Kevin Dahill, chief executive officer of the Nassau-Suffolk Hospital Council in Hauppauge.

Medicare last year covered benefits for 47.5 million seniors and disabled people nationally at a cost of $523 billion. It drives up the federal budget deficit, and its hospital trust fund is projected to go broke by 2024, Medicare trustees said in May.

Both plans seek to slow Medicare spending, but the difference comes down to who bears the brunt of savings squeezed out of Medicare, Dahill said.

Under the Obama law, being phased in now, Medicare remains a government-run program. But it shifts the risk and responsibility of reducing expenses to health care providers by requiring them to figure out how to provide the same service at a lower cost, Dahill said.

The Ryan plan, which would start in 2022, remakes Medicare into a federal subsidy for private health insurance.

It transfers risk and responsibility of cost-reduction to Medicare beneficiaries by giving them a federal voucher of about $8,000 to help buy private insurance -- and requiring them to pay the rest.

The Ryan plan, which has little chance of being approved by Democrats who control the Senate and White House, has become a political sore spot for the GOP because seniors and others worry it goes too far.

In the meantime, the Obama plan is facing court challenges and could be changed as part of a still-elusive budget deficit compromise.

Whether the Obama law or Ryan's plan ultimately guides Medicare's future may depend on the outcome of the 2012 elections. Both parties are making Medicare a defining issue.

Here are three areas where Long Island beneficiaries would be treated differently under the Obama health care plan and the Ryan Medicare plan:

Out of Pocket Costs

The biggest difference is the cost of the Medicare premium.

Under the Ryan plan, Medicare beneficiaries would, on average, get an $8,000 voucher to buy private health insurance expected to cost $20,500 a year.

The beneficiary would have to pick up the $12,500 difference, about twice what he or she would pay under the Obama law, according to a Kaiser Family Foundation analysis.

Advocates for the Ryan plan say it frees firms to vie for seniors' business in a competitive market, giving them choice and possibly lower premiums.

Affluent pay more

Both plans require seniors with high incomes to pay more.

Under the Obama law, individuals making $85,000 a year and couples earning $170,000 pay a higher Medicare premium for doctors and prescription drugs.

Under the Ryan plan, Medicare beneficiaries among the top 2 percent in income would get just 30 percent of the voucher amount, and those in the next top 6 percent would get half of the voucher amount.

Care Delivery

The Obama law includes several innovations and pilot programs to test ways to save money by moving away from paying for each medical procedure and instead paying for overall care for a patient.

But the law also creates targets for growth in costs, and if those are missed, a panel of experts lowers payments to providers, and critics say that could reduce benefits or services.

The Ryan plan relies on private insurance companies to manage seniors' health care and restrain Medicare costs.

No one knows just how well either plan would work out.