Paul Ryan’s health care ‘fix’

Rep Paul Ryan (R WI) has come up with an economic/philosophical/governance plan that puts our problems squarely on the table – unsustainable government spending, driven in large part by health care costs.
While that’s not exactly new news, it is helpful to be reminded of how big the issue is. And some of his ideas, like increasing the eligibility age and means-testing for Medicare, make a lot of sense. And they will help, on the margins.
If you were looking for real solutions to the health cost problem, you’re going to be sorely disappointed. Limiting eligibility doesn’t address cost drivers, it just limits the number of people in the program. And that’s where Ryan’s ‘plan’ falls apart.
Unfortunately, he’s fallen into the same trap his Democratic colleagues did with their version of health reform – the Ryan plan does little to address costs.
The main pillars of Ryan’s plan are privatizing Medicare, changing Medicaid to a block grant program, and replacing health reform with a refundable tax credit ($2300 for individuals, $5700 for families).
While each of those ideas are attractive on their face, they are not going to do anything to solve the real problem – cost inflation.
If privatizing Medicare was the solution, Medicare Advantage programs would be less expensive than good old government run Medicare, and the private insurers that manage them wouldn’t be screaming about the reduction in their payments from the Feds. MA plans are MORE expensive than plain Medicare. They’ve also been around for about twenty years, more than enough time for the private market to prove it can do a better job delivering benefits while controlling costs.
The sad fact is that hasn’t been the case. While this may be difficult for free market ideologues to grasp, the for-profit system has not delivered better results for the Medicare population, better results defined as lower costs and better outcomes with happier members
Ryan also recommends fixing the Medicare physician fee problem by adding $350 billion to the deficit, an idea that does nothing to control costs, and actually increases the financial burden of the system on taxpayers.
I’ll look at Medicaid and private insurance in later posts – where we’ll examine Ryan’s plan to require insurers to take all comers without forcing people to get coverage before they get sick, and institute tort reform to somehow control costs when credible studies indicate this is a minor cost driver.