One criticism of the Medicare overhaul that House Budget Committee Chairman Paul D. Ryan (R-Wis.) has championed is that it would shift more and more of the program's costs onto seniors. In the latest version of his plan, Ryan acknowledges that capping the growth of the program could, in fact, make health insurance more expensive for some retirees. But that's part of the point of the change, which would concentrate Medicare spending on the poorest and sickest seniors.
This page has argued that Ryan's overhaul goes too far, threatening Medicare's fundamental promise of affordable health insurance for all seniors. But the questions he poses about who the government subsidizes and to what end are the kind of debate that Congress can't afford to duck.
Ryan wants to transform Medicare from a health insurance plan into subsidies for coverage, starting with those who become eligible for the program in 2023. Seniors would shop for insurance at a new Medicare exchange, where private insurers would offer standardized plans alongside the government's traditional Medicare coverage. The subsidies would be large enough to pay for the second-least-expensive plan, with a notable caveat: The subsidies could not grow more than half a percentage point faster than the economy as a whole. If the subsidies didn't keep up with the increase in premiums — and they wouldn't, if Medicare costs grow at the same rate they did in the 1990s and 2000s — the government would increase its aid to the poorest and sickest beneficiaries to cover their out-of-pocket costs. Everyone else would have to pick up a larger share of the tab.