When Claire Celsi's father-in-law died in July, the one thing her mother-in-law did not have to worry about was the $300,000 hospital bill. Medicare covered most of it.
But election-year proposals to transform Medicare into a so-called premium-support program, as proposed by Mitt Romney, the Republican presidential nominee, are making Celsi anxious about the health costs she may face in retirement. People age 55 and older would see no changes to their Medicare benefits under these plans.
But at 46, Celsi is well into her working life. She has contributed to Medicare and has been counting on it.
"I'm 46; my husband is 52. At this stage of our lives, it's already too late to start building up an emergency medical fund that's big enough to pay for all the extra expenses we'd incur," Celsi said. "I looked at that hospital bill and thought, what if that was me and I didn't have Medicare? What would I do?"
Many health care consumers are wondering the same. But answers to their questions are hard to come by: The proposals keep changing, and some are short on details. No one is certain what health care costs will be in the coming years.
Still, it's clear that the proposed changes would shift costs from the federal government to retirees. An early version of a Republican plan would have more than doubled out-of-pocket health expenses for older adults, to $12,500 in 2022, the Congressional Budget Office estimated.
"All scenarios will require seniors to pay more," said Robert Moffit, senior fellow at the Heritage Foundation, a conservative research organization in Washington. To think otherwise, he said, "is a fantasy."
Under the current Republican plan, seniors would buy medical coverage from private insurers or from traditional Medicare, which would compete with private plans. Medicare beneficiaries would receive fixed amounts from the government to help pay the premiums. The amounts would vary with the recipient's income.
The strategy has been supported by conservatives in Congress since the early 1980s, and it has become a central issue in the presidential campaign. The restructuring would affect some of the most vulnerable Americans: the elderly, nearly half of whom live on less than $22,000 a year, and who already spend 16 to 22 percent of their income on health care. Many have dementia and other complex medical problems.
Proponents say that calling such a system a "voucher plan," as many critics have, is misleading.
"It gives a false impression that individuals will be left with a certificate to go out and fend for themselves in an unregulated market," which is not the case, Moffit said. "It's a defined-contribution system that operates within a very regulated health insurance market exchange, based on what exists in Medicare today."
Participating private health plans would have to offer coverage equivalent to traditional Medicare, for example, and would not be allowed to reject Medicare recipients. The underlying assumption is that private plans can cover older people at a lower cost than the government. But private insurers have not held health costs down in the private market, critics note, and there is no guarantee that a government's fixed contribution would keep pace with rising premium costs.
The Republican plan would "end Medicare as we know it," said Joe Baker, president of the Medicare Rights Center, a national nonprofit organization based in New York City.
A version of a Republican plan drafted in 2011 by Rep. Paul D. Ryan, R-Wis., now the Republican vice-presidential nominee, would have made private coverage the only option for older adults. The Congressional Budget Office estimated that the private health plans would charge more than traditional Medicare: about $20,512 a year on average in 2022.
But the government subsidy would be set at only $8,000, adding $6,400 to a senior's annual out-of-pocket medical costs, according to analyses by the Commonwealth Fund and the Kaiser Family Foundation Program on Medicare Policy. Under the plan, medical costs would consume nearly half of the average senior's Social Security income.
Private health plans cost more than traditional Medicare, the Congressional Budget Office said, because they have higher administrative costs and pay higher rates to doctors and hospitals.
Under the current Republican proposal, the value of the government subsidy would be pegged, at least initially, to the cost of the second-cheapest insurance plan in the local market. Beneficiaries would have to pay more if they choose plusher plans, which could include traditional Medicare in some markets. Romney has said low-income people would receive more generous government support, while higher earners would get slightly less.
Critics say this plan might result in low premium contributions for retirees in many areas, who would be able to afford only the most tightly managed plans.
Karen Davis, president of the Commonwealth Fund, said that could mean "the premium is cheap, but you can't find the oncologist you need."
Where does that leave consumers like Celsi? Most premium-support proposals would exempt those about to turn 55 from changes. Although the average beneficiary in traditional Medicare currently gets free hospital insurance, he or she already has significant out-of-pocket expenses, including about $100 for outpatient coverage under Part B, co-payments or about $177 a month for a supplemental plan to cover co-pays and deductibles, and $33 a month on average for a drug plan under Part D.
But even those who remain enrolled in traditional Medicare might feel changes. Baker and other critics worry that if private insurance companies "cherry-pick" younger and healthier beneficiaries, the people left in traditional Medicare will be older and sicker, driving up costs for those who remain.
For younger Americans who would face a radically reshaped Medicare, like Celsi, the key question is how the government would set the level of the premium support, and whether it would keep pace with health care inflation. No one knows what that will be or whether politicians will choose to spend money to keep up.
