Rep. Paul Ryan has released his 2012 budget proposal (PDF), and in it, he has endorsed the truly terrible idea of eliminating Medicare and replacing it with a voucher to buy more costly private insurance on an exchange.
Future Medicare recipients will be able to choose from a list of guaranteed coverage options, and they will be given the ability to choose a plan that works best for them. This is not a voucher program, but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.
The premium-support model would operate similar to the way the Medicare prescription-drug benefit program works today. The Medicare premium-support payment would be adjusted so that wealthier beneficiaries would receive a lower subsidy, the sick would receive a higher payment if their conditions worsened, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.
This approach to strengthen the Medicare program ensures security and affordability for seniors now and into the future. First, it ensures security by setting up a tightly regulated exchange for Medicare plans. Health plans that choose to participate in the Medicare exchange must agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking and ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.
I would love if the entire Democratic establishment could unequivocally beat up on Ryan and the rest of the Republicans for promoting such a horrible plan. They could point out how the Medicare Advantage private insurance exchange ended up significantly more expensive than traditional Medicare, show how public insurance has always been more cost effective (PDF) than private insurance and explain how the largest private health insurance exchanges in America have been a total failure at controlling cost. They could mock that we are to believe an 85-year-old with the beginnings of dementia is going to be a super savvy shopper able to understand the complexities of insurance and select the best deal.
And after demonstrating what a costly and wasteful idea premium subsidized private health insurance exchanges are, they could than show that Ryan’s plan only “saves” money by drastically reducing the level of coverage we provide our seniors.
Unfortunately, this task has become monumentally more difficult in the last year because President Obama, Congressional Democrats, and the bulk of “liberal” pundits endorsed the new health care law, all claiming profusely what an amazing idea it is to use sliding scale premium support payments to provide individuals with insurance on private exchanges.
The basic description of Ryan’s Medicare privatization program is essentially indistinguishable from the new “Obamacare” exchanges. So, basically every progressive complaint you will hear about the horrible design of Ryan’s Medicare privatization plan could apply equally as well to the Democrats’ new health care law.
Democrats could have made a very clearcut and principled case for why Ryan’s plan is so wrong, but now they need to tie themselves in logical knots explaining why it is a great system for Americans under 65, yet a horrible one for those over 65.