One of the solutions touted for Medicare's looming financial doomsday is to switch the program to a voucher system, where recipients get vouchers to buy private coverage. However, a study, by the Kaiser Family Foundation, has found that such a system would probably increase, if not double, rates for many individuals. Article source: get additional information

A different suggestion linked to Medicare privatizing

It is never good when a business or program is getting less money than it gives out. That is why a lot of government programs such as Medicaid and Social Security cannot possibly last much longer. Medicare is now facing the same struggle.

Whenever Congress decides it needs installment loans for projects, it will take the cash from these programs, which is another issue.

According to Romney, one way to solve this problem is to “privatize” Medicare by giving coupons to people who need to purchase private insurance. The premiums would increase for most people though, according to a Kaiser Family Foundation study, which may be bad for many people, according to CBS.

Could not have been based off of Romney

Kaiser’s study was modeled after the Romney-Ryan Medicare program but not exactly on it. This is because, according to BusinessWeek, there are not any details about the plan released except that people will get coupons to buy private insurance with the “premium support” model.

One assumption in the study is that people will be allowed to used Medicare, Medicare Part B, or a lower-cost privatized Medicare plan for a while during the transition.

At this time, Medicare Part B pays a $99.90 per month premium, and Kaiser assumed about half of individuals would keep using the Part B program. It also expected most people would see a 59 percent increase in rates.

Medicare Advantage is the privatized Medicare program already accessible. In February, the Department of Health and Human Services projected that the average premium for the program was $31.54.

Mostly based on state

The study also found regional implications. People receiving traditional Medicare in high-cost areas would absorb more out-of-pocket costs. In California, New Jersey, Florida, CT and Nevada, rates would increase by $100 or more for those still getting Part B coverage. Florida had the worst increase, as premiums would increase to a projected $200 per month.

People with areas of lowest cost coverage would do better with Part B than with private insurance whereas those in high cost areas would pay more for Part B than for private insurance.

The Romney-Ryan program could very well still work, according to Kaiser, but that has not stopped Obama from using it against his opponent.

Sources:
CBS
Businessweek
HHS