Medicare guarantees access to health care for older adults and people with disabilities. Together with the Affordable Care Act (ACA) and Medicaid, Medicare builds health security for Americans of all ages. Any changes to Medicare must aim for healthier people, better care, and smarter spending—not paying more for less.
Some policymakers support turning Medicare into a premium support (or voucher) program. Through premium support, the federal government would give people with Medicare a voucher or coupon to purchase health coverage. Under recent proposals, people could use their voucher for a private health plan or for Original Medicare.
Under premium support, people with Medicare could pay more for less.
Under some premium support proposals,
the value of the voucher is not likely to
keep pace with rising health care costs,
meaning people with Medicare could pay
Original Medicare could wither away. Over time, younger, healthier people with Medicare would likely opt for private plans, leaving older, sicker people in Original Medicare and causing costs to go up substantially.
According to a 2012 analysis, almost six in ten people with Medicare could face higher premiums for the same coverage under a voucher system.
Not only out-of-pocket costs could be affected. People with Medicare may no longer be able to see the health care providers of their choice.
As more people opt for private plans over Original Medicare, fewer doctors may be willing to accept Original Medicare’s payment rates to care for those patients. By design, private health plans already include restricted provider networks.
People with Medicare: Just the Facts
Most people with Medicare cannot afford to pay more. Half of all people with Medicare have incomes less than $24,150 per year and have $63,350 or less in savings.
People of color live on even less. The median income for black beneficiaries is $16,150 per year and just $12,800 for Hispanic beneficiaries.
Older people of color are more likely to live in poverty. The poverty rate is 18% for black adults over 65 and 20% for Hispanic adults compared to 7% for white adults.
People with Medicare already pay a significant amount towards health care. In 2012, they paid 14% of household expenses towards health care costs, compared with only 5% for those not yet on Medicare.
Baby Boomers need Medicare to retire. Among future retirees, half will have incomes below $28,450 per year and $102,800 or less in savings.
57 million Americans rely on Medicare for health insurance coverage. 95% of Americans consider Medicare an important program, and around 90% of Americans want federal Medicare spending to stay the same or increase.
Six in ten Americans say Medicare is working well, and 75% of people covered by Medicare say the
program is working well.
“I have always had a weak heart, but over the last year my condition got much worse. I live on $1,400 per month, or about $17,000 per year, from Social Security Disability benefits. When my condition deteriorated, my doctor prescribed new drugs, amounting to $500 every month. As my health costs have gone up, it has been hard to decide whether to pay for my mortgage, my prescriptions, or air conditioning in the hot summer months.
I had a Medicare Advantage plan, but in order to pay my other bills, I stopped paying the premium. The plan dropped me, so I now have no prescription drug coverage at all. I could go to a low-cost clinic in town, but I cannot drive because of my health. So, now I just don’t go to the doctor at all.”
Premium support could end guaranteed benefits in Medicare.
Today, people with Medicare are entitled to the same set of benefits, whether they choose Original Medicare or a private plan. Some premium support plans would allow private plans to use comparable—but not guaranteed—benefits.
Most Americans—70%—prefer Medicare’s guaranteed benefits to vouchers.
Medicare is more efficient than private insurance.
Medicare does a better job of controlling costs
than private health plans. From 2010 to 2015,
Medicare spending rose by an average of 1.4%
per person per year—less than half the growth
rate of private insurance.
Medicare provides health coverage less expensively than private insurance and has lower administrative
expenses than private health plans which, by design, turn a profit.
Protect & Strengthen Medicare
Visit our one-stop resource for facts and information on the Medicare program and on proposals under consideration by Congress and the Administration to change it. Check back for ongoing updates and opportunities to get involved.