medicare<u+00a0>beneficiaries could face big changes as the republican party, fresh off its election sweep, looks to revamp the federal health-care system. while donald trump had said before his campaign<u+2019>s launch that <u+201c>i<u+2019>m not going to cut<u+00a0>medicare<u+00a0>or medicaid,<u+201d><u+00a0>the president-elect<u+2019>s transition website has signaled support for longstanding republican-backed plans to <u+201c>modernize<u+00a0>medicare.<u+201d> in addition, if the trump administration amends or repeals the affordable care act<u+2014>as mr. trump has vowed to do<u+2014>medicare<u+00a0>beneficiaries could lose some basic benefits, although upper-income participants could see reductions in their premiums. the bigger question is whether the incoming administration and the republican majority in congress will push to revamp<u+00a0>medicare<u+00a0>itself by scrapping the current payment system<u+2014>in which the federal government covers a percentage of the cost<u+2014>in favor of fixed-dollar subsidies for retirees to purchase insurance. <u+201c>trump has adopted the language conservatives have been using for a long time when they talk about modernizing<u+00a0>medicare,<u+201d> said howard gleckman, a senior fellow at the urban institute think tank. <u+201c>he went from saying, <u+2018>i am not going to touch<u+00a0>medicare<u+2019> to saying, <u+2018>i am dropping hints that i am going to do some pretty dramatic things to<u+00a0>medicare.<u+2019> <u+201d> the trump transition team didn<u+2019>t respond to requests for comment. the scope of the potential changes remains unclear. much will depend on whether republicans opt to fully or partially repeal the aca and whether policy makers are able to agree on an approach to reshaping<u+00a0>medicare, which covers 57 million older and disabled americans. over the years, politicians<u+2014>including house speaker paul ryan (r., wis)<u+2014>have backed a variety of approaches that would shift<u+00a0>medicare<u+00a0>to what supporters call <u+201c>premium support<u+201d> and critics call <u+201c>vouchers.<u+201d> these proposals would end the current<u+00a0>medicare<u+00a0>benefit and instead give seniors a subsidy to purchase private insurance. some would allow traditional<u+00a0>medicare<u+00a0>to compete with private plans. while observers predict the incoming administration will make the repeal or amendment of the aca a priority in 2017, they say a<u+00a0>medicare<u+00a0>overhaul could take longer. the chances of passing a<u+00a0>medicare<u+00a0>overhaul <u+201c>are certainly better than they have been,<u+201d> mr. gleckman said. <u+201c>there is strong support for it in the house, there now appears to be strong support for it from the president-elect, and there is even some support for it from democrats in the senate.<u+201d> if the aca is repealed, <u+201c>most people in<u+00a0>medicare<u+00a0>are going to see changes in their cost and coverage,<u+201d> said juliette cubanski, associate director of the henry j. kaiser family foundation<u+2019>s program on<u+00a0>medicare<u+00a0>policy. <u+201c>medicare<u+00a0>is tied up in the aca in very important ways.<u+201d> for example, the aca mandates free preventive benefits for<u+00a0>medicare<u+00a0>recipients, including routine annual physicals, mammograms, pap smears and hepatitis-b vaccines, according to the nonprofit<u+00a0>medicare<u+00a0>rights center. the law also does away with a coverage gap under<u+00a0>medicare<u+2019>s part d plans, which pay for prescription medications. part d plans cover 75% of the cost of prescription drugs, leaving the participant to pick up 25%. but after the total cost of a participant<u+2019>s drugs reaches a set amount a year, he or she falls into a coverage gap known as the <u+201c>doughnut hole.<u+201d> once there, a participant is on the hook for a larger share of the cost until catastrophic coverage kicks in. before the aca took effect, beneficiaries paid 100% of their drug costs in the doughnut hole. but under the aca, the percentage beneficiaries pay in the doughnut hole is phasing down to 25% by 2020. on the flip side, if the aca goes away, upper-income<u+00a0>medicare<u+00a0>participants could see income-related premiums for part d disappear. when it comes to revamping<u+00a0>medicare<u+00a0>itself, many believe a plan backed by mr. ryan could serve as a starting point. outlined in a june 22 publication titled<u+00a0><u+201c>a better way: our vision for a confident america,<u+201d><u+00a0>the plan represents what could be a <u+201c>dramatic departure from what the<u+00a0>medicare<u+00a0>program looks like today,<u+201d> said tricia neuman, director of the kaiser family foundation<u+2019>s program on<u+00a0>medicare<u+00a0>policy. under it, the age of eligibility for<u+00a0>medicare<u+00a0>would gradually rise starting in 2020 to eventually reach age 67. perhaps the biggest change would be to introduce<u+2014>starting in 2024<u+2014>so-called premium support, under which the federal government would issue a payment for each<u+00a0>medicare<u+00a0>beneficiary for either private insurance or traditional<u+00a0>medicare. ms. neuman says the goal would be to motivate insurers to lower their costs and consumers to purchase cheaper coverage, holding down medical costs and<u+00a0>medicare<u+00a0>spending. mr. ryan<u+2019>s plan states that the <u+201c>premium-support payment would be adjusted so that the sick would receive higher payments if their conditions worsened; lower-income seniors would receive additional assistance<u+201d> and <u+201c>wealthier seniors would assume responsibility for a greater share of their premiums.<u+201d> while people already on<u+00a0>medicare<u+00a0>may see no change, for younger people, the new system could be <u+201c>a game-changer,<u+201d> ms. neuman said. according to the kaiser family foundation, a 2013 report by the congressional budget office concluded that under such a plan, average premiums paid by beneficiaries would go down, but many beneficiaries who choose traditional<u+00a0>medicare<u+00a0>would pay higher premiums than they would under current law. but depending on factors including how the federal government calculates the premium-support payments, beneficiaries<u+2019> out-of-pocket costs could rise or fall, the cbo report said. some consumer advocates worry that such a change could allow the federal government to shift medical costs to<u+00a0>medicare<u+00a0>beneficiaries, who experts say currently shoulder about 30% of their costs. joe baker, president of the nonprofit<u+00a0>medicare<u+00a0>rights center, says his <u+201c>concern is that if the voucher doesn<u+2019>t keep up with the rate of health-care inflation, the value of that voucher will decline over time and folks will have to<u+201d> pay more of their medical costs or buy cheaper plans. rep. frank pallone, jr. (d., n.j.), ranking member of the house committee on energy and commerce, said, <u+201c>one of the most troubling republican proposals will privatize<u+00a0>medicare, threatening retirement security for americans. democrats will fight to keep our health-care promises to all americans.<u+201d> write to anne tergesen at anne.tergesen@wsj.com
what a gop government potentially means for medicare beneficiaries  - wsj
anne tergesen