• Politics and policy, Paul Ryan edition

    In mid 2011, Paul Ryan got the House of Representatives to pass a budget that radically changed Medicare. It would have gone from a defined benefit program to a defined contribution program, and the contribution would have increased so slowly that the CBO estimated that by 2030, seniors would have had to cover about 68% of premium costs themselves. The Democrats pounced, and the backlash was so severe that the Republicans lost a couple of elections that should have been easy wins for them.

    By the end of the year, Ryan had moved somewhat. The Ryan-Wyden plan, while still a major shift from the current single-payer system of Medicare today, is a much less radical program. Sure, there are still issues with it that concern many, but it eliminates many of the “ending Medicare as we know it” concerns of the House budget.

    In the coming weeks, we should have a strong and vigorous debate as to how to reform the health care system. But let’s keep it rational. I have no doubt that Democrats would rather run again the first Ryan plan. That one was hard to defend. But it’s the second Ryan plan that closely aligns with Mitt Romney’s, and unless things go crazy, that is the plan they will be running on.

    It may make for good politics to demonize Ryan for his first plan. I expect politicians will do that. But here, and in places where policy is taken seriously, I hope we can focus on the plans that are actually being considered. As I’ve said before:

    I’ve often been snarky towards those who think that a single payer system is American as apple pie if you’re 65, but communism if you’re 64 (I’m looking at you, Congress). But if [Ryan-Wyden] picks up steam, it will flip things for many people. It will be hard to argue that the ACA is a viable, progressive solution for universal coverage if you’re 64, but free-market-heartlessness if you’re 65. And many who wholeheartedly supported the ACA will find themselves in that position moving forward. After all, [Ryan-Wyden] even has a public option.

    Moreover, with Ryan’s support, many who want to repeal the ACA may soon be in a similar spot. How do you support [Ryan-Wyden] as a sensible solution for universal healthcare if you’re 65, but believe that it’s tyranny and the end-of-freedom if you’re 64? After all, the ACA doesn’t even have that public option.

    There’s a real case to be made for compromise here, if politicians could act like adults. They may not for the next few months, but that doesn’t mean we can’t set an example for them here.

    UPDATE: Wow. Didn’t take long to get some howling emails. Yes, I get why you’re upset by his first plan. We were, too. But on this site, we focus on the policy, not the man. If you want to have a discussion on the old House budget, so be it. But if it looks like this election will be about Ryan-Wyden and Romney’s vision versus the ACA, then that is what we will discuss. Just because President Obama said something nice about single-payer doesn’t mean I have to mention it in every post about Obamacare.


    • As part of your proposal for rational debate, I woul d propose some work over the next few weeks simply on some some definitions everyone could agree on.

      When you say

      “The Ryan-Wyden plan, while still a major shift from the current single-payer system of Medicare today..”

      ..my Irish comes to the surface. How can we call an insurance system where over 90% of the beneficiaries find it necessary to or choose to get a second, third or fourth payer, “single payer?” I have raised this on Austin’s posts in the past and (not to put words in his mouth) his opinion is that this statistic is a side issue. I’d be interesting on your opinion on the statistic.

      Then maybe there could be a civil debate about terms not to use even if everyuone agees on their meaning.

    • I actually agree with you this time.
      Your comparisons make sense, and I believe Americans will start to see this more clearly as time goes on.
      Even though it’s not Medicare, the statistics just came out recently that the year’s retirees will see less payback in Social Security than they paid into it.
      It used to be that everyone was willing to pay the government for SS and Medicare because they knew they were going to get theirs someday.
      That’s not true anymore.
      Ryan’s plan may not be perfect, but at least he sees the writing on the wall and is willing to come up with options that may work to preserve some sort of acceptable health plan for the elderly in the future.
      What the Democrats are trying to support now just won’t work in another 20 years.

    • It seems that a fundamental question separating the right and left here is: “Does competition between private insurers lead to a more or less efficient system than single-payer?” It’s a nuanced enough issue that I don’t expect a consensus any time soon. (For example, there can be well- and poorly-regulated insurance markets, and not all single-payer systems are created equal.) But I wish this were the question being debated on the political stage, rather than finger-pointing about who’s out to kill Grandma. I can dream, right?

    • I don’t see why accepting the ACA as a lesser of evils (because of the political reality that there are way too many of those who see Medicare as apple pie for 65 and over, and communism under 65), must commit one to therefore step backward on Medicare in order to be consistent.

      The two are targeting different populations, and the ACA was better than nothing. To then say that obligates one to make a similar compromise on an already established program, Medicare, is a bit unfair. How many ACA supporters are willing to claim that it is a better solution than Medicare (or single payer)?

      Also, regarding the first and second Ryan plans: just because the Ryan-Wyden plan has been discussed after Ryan’s first proposal, how are we to know that it has priority for Ryan over his first proposal?

      What guarantee is there that a Republican sweep of the House, Senate, and White House wouldn’t go full steam ahead with the first Ryan proposal? It seems that concern alone is enough to make it legitimate to say that “Those guys seriously proposed this thing at one time, therefore we can’t trust them holding office.” In other words there is some legitimate reason to campaign against the first plan simply because he was able to propose it and his party able to pass it in the House. For all we know the second proposal was just a smoke screen to get people to stop talking about the first plan because they knew it was unpopular and it cost them a Congressional election in New York. So keeping quiet about the first plan only aids them in establishing political cover for their maximal political desires, which in my view are pretty ugly and deserve to be called out.

    • Aaron:

      Unfortunately, Senator Wyden seems to disagree with your assessment (there is no Ryan-Wyden plan). Could you clarify exactly what proposal you are talking about? From what I’ve found, both the legislation and the policy proposal seem to end Medicare as I know it.

      I understand why you are trying to separate the person from the policy in order to analyze it. But then I think it is unfair to state that since his policy has changed we should only consider the new one. The fact of the matter is that Representative Ryan voted to do a radical thing. That he now supports a policy proposal to do something slightly less radical may or may not be significant based on his track record in politics. This is a fundamental problem with trying to divorce policy from the people who implement it.

      • (On MV’s comment:)

        I agree that you don’t need to analyze only the latest policy but I see no need to make it personal. There can be just two separate analyses. This has the advantage of showing the weakness of the person without attacking him or her personally. I have been almost totally turned off by Cong. Ryan trying to make brownie points with independents like myself by working out a bi-partisan proposal with Sen. Wyden and then not holding to the Wyden-Ryan GDP cap in his own budget.

        So I can analyse the Wyden-Ryan proposal with this hand and the Ryan budget plan with this other hand. However, I won’t use my toes and that is what Cong. Ryan might be forcing me to do if you read between the lines of a recent analysis on National Review by Y. Levin. It appears (admittedly because it is left out) that Ryan is not committed to adding catastrophic coverage to traditional Medicare as called for in Wyden-Ryan. If that is true, I would be totally turned off.

    • Thank you, Aaron Carroll. This is a necessary exercise. I hope others can give better answers than mine.

      Suppose, for the sake of argument that, through risk adjusting and subsidies, a Medicare voucher system could be made to work fairly for all elderly people, including sick and low income elderly people. What’s wrong with that?

      First, it’s unlikely that healthcare consumers are really going to make the right choices for themselves. A new layer of for-profit companies will be created to assemble bargaining power for at least the better-connected elders, and to help with the complexity of the choices.

      Also, a lot of standardization will be required to protect people against under-insurance, bad insurance, and to get guaranteed issue. In effect, the some of the same apparatus as in ACA would end up being required, resulting in a system that is less efficient. That’s one argument.

      But that’s just the current situation. Here’s the main problem:

      Over time, the Medicare voucher program will be in perpetual crisis. Somewhat like the debt ceiling, new votes will be required each year to cover increases in health spending. In the turmoil, costs would tend to shift to beneficiaries, putting greater burdens on the sicker beneficiaries. This is what a transition to defined contribution would mean.

      (The main political benefit for Republicans is gained now just by having made the proposal. But if it were enacted, this perpetual crisis would generate resentment and fear, which would be wonderful for Republicans.)

      Also, consumer choice using capped vouchers is a substitute for intelligent cost control. It’s cost control for the consumers who are able to choose. Others get less care. If the system is perfectly risk adjusted, and insurers have perfect knowledge of risks, perhaps this doesn’t matter as much. But such perfection is not real.

      Also, potential social gains in health are given up, all for the sake of economic freedom. Is this the trade-off we want?

      I’m not an economist or healthcare expert. But it seems to me that it is very important to be able to show why a more robust form of social cooperation than vouchers is needed for healthcare.

      But here’s a purely political response (written for television):

      Obama might say: This proposal is much like my ACA. I’m flattered by imitation. I’m not against privatization in principle, but only if it works. So let’s see how well ACA works when it’s fully implemented before trying to shift Medicare to a similar plan.

      • What Aaron Lechter provides is a strong argument against a fixed-dollar-amount-forever voucher program where all Medicare beneficiaries buy insurance (over which no government entitiy has any say as to minimum creditable coverage or other characteristics) as individuals, individuals who cannot have pre-existing conditions (or — if they do — they might possibly get coverage but have to pay a higher premium).

        No one is proposing such a plan to the best of my knowledge but I think we can all agree that it would not be a good idea.

        (Aside, now that you guys have agreed on another post that “single payer” on this web site means the government is the single payer or the government gives the payer a tax break for being one of the payers — including an individual if the government chose to give such a break in the future, how about defining “voucher.”)