Repetition does not decrease inaccuracy

Jared Bernstein was on the case when Rep. Ryan appeared on Meet the Press:

“Our plan is to give seniors the power to deny business to inefficient providers…their plan [Affordable Care Act] is to give government the power to deny care to seniors.”

To get why this “market solution” can’t work, you have to understand a bit about how Ryan’s plan changes Medicare.  As is by now pretty widely appreciated, including by many in his own party, the plan ends guaranteed health care coverage for seniors and replaces it with a voucher for them to shop for insurance on the street.

Importantly, the value of those vouchers start well below where they need to be to enable seniors to afford coverage comparable to Medicare today (in fact, beneficiaries costs would have to double), and their value falls increasing behind coverage costs over time.

It’s baffled me recently how much you can choose to change a program and still claim that you’re not changing it at all. Here’s my new idea for a health care plan for the elderly: I’m going to give every American over the age of 65 a shiny nickel with which to buy health insurance. I call my plan “Medicare”. Shall we argue over whether this plan is a radical departure from the norm?

Before you get all hot and bothered in the comments, I’m not suggesting this is Rep. Ryan’s plan. But giving out vouchers when you know in advance they will buy less and less insurance in the future is not traditional, defined benefit Medicare.

Jared also has an answer for those who claim that these reduced value vouchers will radically reform the market:

Suppose you send me to the grocery store to buy you a gallon of milk.  Milk costs $3.50 a gallon but you give me $2.  I spend the whole day “denying business to inefficient providers”—i.e., grocers who all charge more than that—and at the end of the day, bring you back a pint.

Now, instead of milk, where I’ve got the information I need to be a smart shopper, suppose you give me the same under-priced voucher but ask me to bring you back a plan for treating that strange pain you’ve been experience on your left side on humid days.

There’s no “denying business to inefficient providers” in the Ryan plan because there’s no market discipline that average folks with incomplete information armed with an inadequate voucher can enforce on a private health insurance market that’s…well, different.


What about the rest of Rep. Ryan’s statement, though? The part about “their plan [Affordable Care Act] is to give government the power to deny care to seniors.” No. As Austin said, “the ACA has nothing in it to deny care to seniors. In fact, Medicare is not permitted to do anything of the sort.”

We’re still on “death panels”? Really?


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