Good question for Rep. Paul Ryan

About his Medicare premium support plan, Kevin Drum asks of Rep. Paul Ryan,

What happens if all the bidders submit bids that are over the [GDP+0.5%] growth cap? Who pays the difference? Seniors?

If Rep. Ryan’s answer is as expressed in his white paper with Senator Wyden,

Cost growth above the cap will be brought in line by reducing “support for the sector most responsible for cost growth, including providers,”

then I will not be satisfied. I want to know how pressure will be brought to bear on providers when the system is operating in a more decentralized way through insurers. How do you make care provision more efficient without doing the kinds of things Obamacare is doing and Rep. Ryan rejects? How do you do it if the main tool of the government in the health sector, FFS Medicare, is less popular and has less market power, which is an outcome I expect from a premium support policy?

The most straight-forward way to reduce the cost to accommodate the rate growth cap is to weaken the minimum actuarial requirements of plans. That’s a cost shift to seniors, and is what I’d expect to occur. But, I could be wrong. I hope someone puts the question to Rep. Ryan.

@afrakt

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