The thirty-four trillion dollar solution

Economists at Center for Economic and Policy Research have crunched the numbers on the "Ryancare" plan to kill Medicare, using Congressional Budget Office estimates and projections, and it's not pretty:

"Thirty-four Trill-i-on Dollars!"

Based on the CBO data provided, the waste far exceeds the savings to the government. Under traditional Medicare, the government is expected to spend about $6,600 in 2022 on a typical 65-year-old, and the beneficiary is expected to spend $4,600 (all numbers in 2011 dollars). Under the Ryan proposal, a voucher for the same 65-year old would cost the government $6,600, saving the government nothing. However, the total cost of purchasing Medicare-equivalent insurance would be $16,900 – more than 50 percent higher than the $11,200 spent by the government and beneficiary combined under traditional Medicare. The difference of $5,700 represents a gift to the private sector...

The CBO projections imply that the main effect of the Ryan plan will not be to shift costs from the government to Medicare beneficiaries. While there is projected to be a substantial shift of $4.9 trillion under the Ryan plan, this shift is dwarfed by the increase in overall costs due to the inefficiency of the private insurance system relative to the public Medicare system. The inefficiency of the private insurance system is projected to add more than $34 trillion to the cost of providing Medicare equivalent policies over the program’s 75-year planning period.

$34 trillion.

The GOP budget plan - following their House budget czar Mr. Ryan off this particular cliff - kills Medicare, raises the eligibility age for their post-Medicare vouchers  to 67 and gives a $34 trillion gift (yes, that's THIRTY-FOUR TRILL-I-ON DOLLARS, Dr. Evil!) to the private insurance companies as subsidy to their additional overhead, profits and inability to match Medicare in cost control.

Stunning.

Complete CEPR study HERE.  Via TPMDC.