The retirement pundits are all taking aim at the proposal by U.S. House Budget Committee Chair Paul Ryan to dismantle Medicare and Medicaid in favor of a voucher system that could be used on the open market.
I don't want to be left out, so here's my 2 cents: Boomers -- those are the people born between 1946 and 1964 -- are about 75 million strong. Unlike other segments of the population, they vote. That gives this proposal a snowball's chance on a July day in South Florida of passage.
So don't spend a lot of time worrying about this plan as you do your retirement planning. But just for the record -- in case you haven't read Ryan's proposal -- here's what the squawk is all about:
- Medicaid pays 62 percent of long-term care because with nursing homes costing an average of $72,000 per year, even the well-heeled blow through their money and turn to Medicaid for help.
- Medicaid pays the Part B premiums, deductibles and copays for 5 million Medicare recipients who otherwise couldn't afford them.
- Two-thirds of money spent on Medicaid goes to people older than 65 and people with disabilities. The remaining one-third provides medical care for the poor -- most of them children.
Ryan's plan for Medicare would affect people 54 and younger. People older than that would continue to participate in Medicare as it is now.
I calculated what Medicare costs people today who don't get help paying it, and it comes to about $10,000 per year for a couple -- at a minimum. Would Ryan's plan push that up or down? My guess is that the winners would be people who are able to pay because it would give them more choice and control. The losers would be people who live on modest incomes -- or less -- and who don't have insurance from their former employers. They could be faced with some ugly decisions.
But politics being politics, I don't think we'll ever have a chance to find out if I'm right or wrong. What do you think?