The Ryan budget plan, Part II: Medicare
In his so-called “Path to Prosperity,” U.S. Rep. Paul Ryan pledges to “preserve America’s social contract with retired workers” by rescuing Medicare from collapse.
“Current retirees deserve the benefits around which they organized their lives,” the plan states. “Future generations deserve health and retirement security they can count on.”
Who's on Medicare? They are, and if you're lucky, you will be too someday. (AP photo)
There’s no question that Medicare is in real trouble. It is already placing enormous pressure on the federal budget, and once the Baby Boom generation begins to retire and claim their benefits, the stress will become untenable. Unfortunately, Ryan proposes to save Medicare by destroying it.
First, some basics. Under Ryan’s plan, Americans 55 and older will be guaranteed standard Medicare benefits. However, those who turn 65 after 2021 will be placed on an entirely different plan. They will in effect be given taxpayer-funded vouchers that they can use to purchase insurance from government-run exchanges, much like the much despised ObamaCare model.
However, those vouchers will not cover the entire cost of health insurance for those retirees. In fact, under the proposed formula, by 2021 those vouchers would probably cover roughly three-fourths of the cost of current Medicare coverage, and that percentage would decline in each succeeding year. Senior citizens would be forced to cover the difference out of their own pockets.
For some retirees, that would be manageable (the plan envisions unspecified higher subsidies for low-income retirees and those with more serious health problems.) But for others it would not, particularly as private and public pension plans falter and proposals are made to slash Social Security.
Ryan argues that the change from a government-managed plan to a voucher plan would actually drive down the cost of health insurance and make it more affordable for retirees. As the plan describes it, “50 million empowered seniors holding providers accountable in a true marketplace” will be more effective than the government in driving down health care and insurance costs.
“Putting patients in charge of how their health care dollars are spent will force providers to compete against each other on price and quality,” the plan argues. “That’s how markets work: The customer is the ultimate guarantor of value.”
There’s an idealism in that claim that is almost charming. The problem is, we have considerable data proving that such belief is nonsense. We know, for example, that since 1970, per capita costs for Medicare coverage have risen more slowly than per capita costs for private medical insurance. Ryan himself acknowledges that fact, complaining that Medicare pays hospitals and doctors less than private insurers while also claiming that “the open-ended, blank-check nature of the Medicare subsidy drives health-care inflation at an astonishing pace.”
When you make an apples-to-apples comparison in what are called common costs — defined as “benefits commonly covered by (both) Medicare and private health insurance” — the price-containment difference is even more stark. Since 1997, the per capita cost for such benefits provided by Medicare has risen at an average annual rate of 4.1 percent, compared to a rise of 6.6 percent among private insurers, a difference of more than 50 percent.
The truth is, individuals in the confusing, frightening and complicated health-care marketplace don’t have the information or analytical skills needed to drive a hard bargain with providers. That’s particularly true of an elderly demographic. If you doubt that, walk into a hospital and try to negotiate a better price for a knee replacement than Aetna or BlueCross has negotiated, using their experts and market power. You can’t do it.
These are not surprises. Nor are they design flaws. The Congressional Budget Office, in an analysis of the Medicare plan requested by Ryan, laid out its impacts in a letter last fall.
“Voucher recipients would probably have to purchase less extensive coverage or pay higher premiums than they would under current law, for two reasons. First, most of the savings for Medicare under the proposal stem from reducing the amounts that the federal government would pay for enrollees on a per capita basis, relative to the projections under current law. Second, future beneficiaries would probably face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.
For both Medicare and Medicaid, the budgetary effects would become larger over time because federal payments would tend to grow more slowly under the proposal than projected costs per enrollee under current law. Although the level of expected federal spending and the uncertainty surrounding that spending would decline, enrollees’ spending for health care and the uncertainty surrounding that spending would increase.”
Ryan bristles at the description of his approach as a voucher plan, preferring the term “premium support program,” but that’s what it is. But it’s a voucher plan. Through Medicare, this country has made a commitment to its senior citizens that they will not be denied needed medical care because they can’t afford it.
The Ryan approach to Medicare reform abandons that commitment. The best thing that can be said about it — and it’s a contribution not to be belittled — is that this proposal begins a much-needed conversation about how to tackle one of the most serious financial challenges facing us as a society.
That word, by the way, was not chosen lightly. How we treat our senior citizens is an issue for our society, not our government, to solve. It is a challenge to our values, our morals, our ethics and our humanity.
– Jay Bookman
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680 comments Add your comment
retiredds
April 5th, 2011
5:02 pm
Let’s see: Path to Prosperity, Contract with America, Weapons of Mass Destruction, No Child Left Behind, Death Panels. Seems the Repubs are very good and artful when coming up with names and slogans for their programs that never work.
Kamchak
April 5th, 2011
5:05 pm
Seems the Repubs are very good and artful when coming up with names and slogans for their programs that never work.
They have Frank Luntz on retainer.
josef nix
April 5th, 2011
5:08 pm
Oooohhhh and even a link to a chart!
While I am for free, universal health care, I’m willing to forego it for all provided it’s there for the over 62 and under 18…anything else is just dickering, imho. And how to pay for it? A flat rate tax on all income, earned and unearned…
Del
April 5th, 2011
5:12 pm
Oh well, more subjective criticism minus alternative plans from the party of irresponsibility. So far…Ryan 2 and Jay goose egg.
Paul
April 5th, 2011
5:15 pm
Looks kinda good at first glance, but as you get to know it, makes you shudder.
I’ve dated women like that.
Anyhow, part of that cost-per-patient is based upon the ridiculously low rates Congress has been paying to health care providers. Who of the posters here would like such a system imposed upon their livelihood?
Rather amusing the comparisons to Obamacare. Maybe this’ll take the heat off Romney for a while?
Adam
April 5th, 2011
5:17 pm
Del: CBO is subjective but Heritage Foundation is not?
Dave R.
April 5th, 2011
5:17 pm
Ohhhh, another stunning Jay Bookman series on something he knows little about. Case in point: The FairTax.
If he shows as much intellectual honesty in this series as he showed in the FairTax series, we can simply ignore this one as well.
“Unfortunately, Ryan proposes to save Medicare by destroying it.”
And there’s your sign . . .
Dave R.
April 5th, 2011
5:18 pm
:Looks kinda good at first glance, but as you get to know it, makes you shudder.
I’ve dated women like that.”
Are you talking coyote arm, Paul?
Del
April 5th, 2011
5:19 pm
Looks like Ryan has the Democrats chasing their tales and soon they’ll be backing off like Iraqi tanks. Catch y’all later. maybe it will be The Ryan Budget Part III
Paul
April 5th, 2011
5:21 pm
Jay
similar to topic follow-up: KV Pharmaceutical Company cut the price of its Makena to $690 per shot, still resulting in thousands of dollars’ cost for the entire regimen. FDA then announced it would take no action against compound pharmacies who still made the drug and charged 15 bucks per dose.
Paul
April 5th, 2011
5:22 pm
Dave R
Never had the pleasure, thank heavens -
Del
April 5th, 2011
5:24 pm
Paul’s discovered that they all look good at closing time. ISFH…sorry just had to slip that one in. I’m out
jm
April 5th, 2011
5:24 pm
Gimme a R – R!
Gimme a Y – Y!
Gimme a A – A!
Gimme a N – N!
What does that spell? Cannon Fodder!
Dave R.
April 5th, 2011
5:26 pm
Time for the commute home. Not sure if I’ll be back on. The CBS Tuesday night lineup is just too good, especially if all new episodes.
Paul
April 5th, 2011
5:26 pm
Jay
And it seems Medicare will now pay for the prostate cancer drug Provenge to the tune of $93,000 per patient.
That buys another four months of life.
Sorry, but cost containment needs to take place within Medicare when fatal diseases are involved.
WOW
April 5th, 2011
5:27 pm
Yaaaaaaaaaaawn. More left wing nonsense about the GOP taking away health care for old people.
Paul
April 5th, 2011
5:27 pm
Dave R
Have a good one –
Better check my DVR.
jm
April 5th, 2011
5:29 pm
The laws of economics cannot be refuted Jay. We either have to tax everyone to death, or let people try to help themselves.
All this analysis is completely “ceteris paribus” too, such that it utterly fails to take into account human nature. All I know is the path we’re on is unsustainable. I look forward to “The Bookman Plan”. We can all be critics. What’s our solution to the plan that actually solves the problem? (rank amateur solutions that don’t meet basic economic tests don’t count)
I can look at this stuff in detail (and have to some extent). But I also no Ryan’s a good guy, not an a-hole, and if this is what it takes to keep america solvent and functional for the next generation, so be it.
josef nix
April 5th, 2011
5:30 pm
PAUL
Death panels?
jm
April 5th, 2011
5:30 pm
My parents get my social security and medicare payment each month. They could take care of themselves as necessary. But no one turns down a government hand out. Which is why the must stop.
Your GOP Representative
April 5th, 2011
5:30 pm
How we treat our senior citizens is an issue for our society, not our government, to solve. It is a challenge to our values, our morals, our ethics and our humanity.
I’m sorry, next door neighbor’s momma, but I have to throw you under the bus. The people have spoken. They came to me in my dreams and said, “take me, no, take me.” How could I refuse. The savings will be well spent on tax cuts for Kochs though. They told me to tell you, “You’re Welcome.”
Jay
April 5th, 2011
5:31 pm
Paul, I agree on that prostate drug. Unfortunately, Ryan also takes a shot or two at “death panels” in his budget, although he doesn’t use the term.
Pablo
April 5th, 2011
5:33 pm
“Seems the Repubs are very good and artful when coming up with names and slogans for their programs that never work.”
How about “Hope You Can Believe In”? Seems to me that Democrats are not that far behind…
WOW
April 5th, 2011
5:34 pm
Congress makes first major dent in health care law
http://www.washingtontimes.com/news/2011/apr/5/congress-makes-first-major-dent-health-care-law/
Joe
April 5th, 2011
5:36 pm
“The best thing that can be said about it — and it’s a contribution not to be belittled — is that this proposal begins a much-needed conversation about how to tackle one of the most serious financial challenges facing us as a society.”
The most serious financial challenge facing us as a society is NOT the cost of Medicare. The cost of Medicare is a symptom.
The most serious financial challenge facing us as a society is the cost of health care. Cutting Medicare benefits will only shift the cost of health care from the public sector to the private sector. Either way, taxpayers are still screwed.
Health care in this country costs twice as much as in other industrialized countries. The solutions are out there. If only our political leaders would offer them, and when they do, if only the media would put these leaders on television too so Americans can hear about and consider such solutions.
Kamchak
April 5th, 2011
5:37 pm
The laws of economics cannot be refuted…
Funny.
That’s the same thing a high priest says about his god’s law.
Your GOP Representative
April 5th, 2011
5:38 pm
What we need to do is put all those Medicare recipients on private health insurance because they know how to keep profits up as long as the government stays out of the regulation business. For example, those stupid rules about insurance companies spending at least 80 percent of insurance premiums on the people paying the insurance premiums while CEOs and other executives struggle just to make ends meet is absurd. And that utterly foolish requirement that insurance companies cannot dump people at will doesn’t even deserve the time that I have already wasted on it. The nerve of that Obama fellow and those Democrats. Unleash Ryan. He’ll set things right.
WOW
April 5th, 2011
5:38 pm
OH UH SPEGETIOES!!!!!!!!!!
Voters still split on blame for possible shutdown
http://www.washingtonpost.com/politics/voters-still-split-on-blame-for-possible-shutdown/2011/04/04/AFMUiXdC_story.html
Left wing management
April 5th, 2011
5:39 pm
Jay: “How we treat our senior citizens is an issue for our society, not our government”
But the modern right doesn’t believe in ’society’ (Thatcher). To the modern conservative movement (the one that’s in the driver’s seat of the GOP and in whose pocket Paul Ryan the mouse with clipboard and calculator sits) ’society’ is a myth, a ploy crafted by degenerates to sap the vitality of the nation. The nation exists, but not the society. (If you can’t waive a flag for it, it doesn’t exist.)
Southern Comfort (aka The Man)
April 5th, 2011
5:39 pm
I’d say a cursory read of Matthew 25 is in order for most of the society today. Whether we choose to do so or not, the Bible explains the reward/punishment for our actions towards those that need help the most. I’d rather err on the side of caution and aid those who need help as opposed to leaving them on their own. Seems as if those who say we are a “Christian Nation” sometimes forget the teachings of Christ.
Koch's Law of Money Rules
April 5th, 2011
5:41 pm
The laws of economics cannot be refuted…
Unless they’re related to the laws of physics and are used to support such absurd notions as man-made global warming. My money says otherwise.
WOW
April 5th, 2011
5:41 pm
For too long Washington has not been honest with the American people. Washington has been making empty promises to Americans from a government that is going broke. The nation’s fiscal trajectory is simply not sustainable. The debt is projected to grow to truly catastrophic levels in the new future, leading to an economic collapse and a diminished future. We don’t need clever politicians in Washington. We need real leadership and that is what we intend to provide. The president’s recent budget proposal that he gave is worse than just a commitment to the status quo. The president actually accelerates our descent into a debt crisis. He doubles the debt by the end of his first term and triples the debt by the end of his budget.
Let me ask anybody who is listening this, what if your congressman, your president saw it coming? What if they knew it was gonna happen, what if they knew why it was gonna happen, when it was gonna happen, what nature, and more importantly, what if they knew what could be done to prevent it from happening, and if they had time to prevent it, but they decided not to because it wasn’t good politics? What would you think of your president, your member of Congress? Well, gah, that is where we are right now. This is the most predictable economic crisis in our history, and what are we doing, playing politics?
- Paul Ryan
Face it Bookman, Obama is very very nervous right now.
Paul
April 5th, 2011
5:44 pm
josef nix – Jay
Rep Ryan came up with politically palatable terms for ‘Obamacare’ and ‘vouchers’ to sell it to the public.
I’m sure someone can come up with something to replace ‘death panels.’
How about “eternity-accelerating options”?
josef nix
April 5th, 2011
5:48 pm
PAUL
EOI! I kinda like that term…catchy.
Paul
April 5th, 2011
5:51 pm
SoCom
Hey! That stuff applies only on Sundays.
Doesn’t it?
josef nix
April 5th, 2011
5:51 pm
SoCo
I’m with you on that. But then, I’m not a Christian and am a bleeding heart liberal…
1811/1801 - 0311/0317
April 5th, 2011
5:52 pm
Jay:
“How we treat our senior citizens is an issue for our society, not our government, to solve. It is a challenge to our values, our morals, our ethics and our humanity.”
I would add, how we treat our most vulnerable unborn citizens is an issue for our society, and our government, to solve. It is a challenge to our values, our morals, and ethics and our humnanity.
So fair we are doing very poorly.
Southern Comfort (aka The Man)
April 5th, 2011
5:54 pm
Paul
I’m beginning to believe that, and only between the hours of 10am-1pm.
josef
Wasn’t Jesus Jewish?
Guess you don’t have to be Christian to follow common sense though.
ty webb
April 5th, 2011
5:55 pm
“I’d rather err on the side of caution and aid those who need help as opposed to leaving them on their own.’
Well go ahead, no one’s stopping you.
josef nix
April 5th, 2011
5:58 pm
Cuddin JC should’ve stayed out of politics! Oh, wait a minute…he did…I think…oh, I don’t know.
josef nix
April 5th, 2011
6:00 pm
ty
“Well go ahead, no one’s stopping you”
It shouldn’t stop anyone with a moral compass…
Left wing management
April 5th, 2011
6:01 pm
Let’s correct that little bit for ty webb’s benefit:
We should say rather: I’d rather make damn certain that as a society we err on the side of caution and aid those who need help as opposed to leaving them on their own.
ty webb
April 5th, 2011
6:02 pm
josef,
well said…nor should it stop anyone regardless if the federal government does it or not either.
getalife
April 5th, 2011
6:03 pm
Whoa a two parter.
I know two seniors so I know what I am talking about.
But seriously, Seniors should be warned they are voting to take their own ss checks and health care if they vote gop.
Fear card.
Southern Comfort (aka The Man)
April 5th, 2011
6:04 pm
ty
Trust me, I already do. I’m not waiting on anyone else to aid my personal salvation. I’ll die with a clean conscience.
Abe Froman
April 5th, 2011
6:06 pm
If their goal is to reduce medicare enrollment, then this plan is too complicated. Handing out 2 free cartons of cigarettes a month to seniors would so the same thing, and support a valuable constituency to boot.
Southern Comfort (aka The Man)
April 5th, 2011
6:06 pm
josef
Read some interesting research a while ago in a book about ol’ Cuddin JC. We’ll have to discuss that sometime as part of it was based on linguistics.
jt
April 5th, 2011
6:06 pm
Jay claims–”f you doubt that, walk into a hospital and try to negotiate a better price for a knee replacement than Aetna or BlueCross has negotiated, using their experts and market power. You can’t do it.”
One needs to only escape an immoral and corrupt federal government and those coorps who it influences—————–
Knee Replacement Surgery & Cost in India, Costa Rica & Mexico
Package Cost: 6,000~12,500 US Dollars
The cost of a total knee replacement varies depending upon where it is performed. The average cost – total knee replacement in the United States is about $40,000. The average cost of total knee replacement in our network varies from $6000 to $ 13,000.
Example numbers are India: $ 6,000; Costa Rica $ 11,500; Mexico: $ 11,500.
These surgeries are performed by the best knee replacement doctors that have experience of several successful knee replacement procedures. Many of the doctors have worked in the USA or Europe.
Listen to Ron Paul, get the government OUT of the medical field..and we could have decent cheap service too.
http://www.medicaltourismco.com/orthopedic-joint-bone/knee-replacement-surgery-cost.php
Paul
April 5th, 2011
6:06 pm
josef nix – SoCom
’scuse me if I’ve told this before, but my dad enjoys relating the time his mother was talking about Jesus and my dad said, “you know Jesus was Jewish” to which my grandma replied most indignantly, ‘He was not!!! ”
‘course, we all know the Kinky Friedman song -
josef nix
April 5th, 2011
6:07 pm
SoCo
“I’m not waiting on anyone else to aid my personal salvation”
Race traitor!