• Give me one reason I should believe this

    The CBO scores the Ryan-Rivlin Health Proposal as saving $280 billion over 2011-2020. Future savings come from pegging increases in vouchers for private Medicare plans to GDP per capita + 1%.

    There are many ways to attack or defend what the Ryan-Rivlin plan would do to Medicare and the health of beneficiaries of that program. I’m not going to do either (and don’t assume I’d go one way or the other–I do support private plans in some fashion).

    All I want to ask is, why should I believe that voucher growth will stay pegged to GDP per capita + 1%? Medicare Advantage (MA) payments didn’t go according to plan either and they’re subject to the same political pressures. If the Ryan-Rivlin plan would save money we’d already be saving some in the MA program.

    We’ve seen this many times before. We can do better. There is cost control I believe in. This is not it.

    • When you read health care writers who are opposed to the ACA, they claim that cutting MA spending back to FFS levels is balancing the budget on the backs of old people. That it will lead to 10 patient open wards. Yet they support this kind of voucher plan that cuts Medicare spending even more. Medicare spending needs to decrease somehow. I still think we need to be looking at ways to focus on costs. I am also less than certain we can do it for Medicare in isolation from the rest of the system.


    • Agree with Steve. Additionally, given the way GDP is measured and it’s significant flaws in depicting “average” income and ability to pay, I submit that “GDP+1% per capita” is far from a reasonable approach. I’ve not been impressed by Ryan so far and this does nothing to improve on that record.

    • If I read this correctly, the GDP per capita + 1% has nothing to do with the “savings” in 2011 thru 2020 (the vouchers are not in play during this time frame).

      The savings come from (a) raising the deductibles for FFS Medicare, and (b) preventing a medigap plan from picking up those deductibles. My guess is the limits on the medigap plans were put in to allow a savings in Advantage plans.

      Again, if this non-expert is reading things correctly, the whole deal with the GDP + 1% is to make sure the vouchers are already too low when they kick in (at current rates of increase, the cost of a voucher which would duplicate then current Medicate benefits would be greater than what the Ryan plan stipulates).

      Of course, unless something is done to reduce the rate of medical cost inflation, this just amounts to a giant cost-shift. Or, does standard economic theory predict that this sort of stuff should “bend the curve” all by itself? I’m slowly re-learning economic theory by reading your posts and following your blogroll, but I have no idea what the answer to my question is.

      • @Phil in Brighton – I think you’re reading it right and I’ve updated the text accordingly. Theoretically if physicians need to attract more patients with other insurance they’ll have to lower prices to do so. That is, if Medicare patients become less attractive their will be more competition for other patients. That’s theory and it could only work out that way if we were patient and stuck steadfast to the plan. But we won’t. Once physicians threaten to not accept Medicare beneficiaries Congress will be spooked and raise the payment level. That’s what happens now with physician payments. Nobody has explained why we should ignore our experience in these matters.