• 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.

    Exactly.

    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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    • There is plenty to criticize in Ryan’s plan for Medicare reform. I fully agree that it ends Medicare as we know it. Therefore it is, I think, unnecessary to criticize the plan using misleading and inflammatory accusations, specifically: “the [Ryan] plan ends guaranteed health care coverage for seniors and replaces it with a voucher for them to shop for insurance on the street.” (my boldface).

      Suppose we replace “on the street” with “on government managed insurance exchanges offering insurance policies with government specified minimum coverage and government guaranteed eligibility without regard to age or pre-existing conditions.”

      Mr. Bernstein does himself a disservice when he attacks misleading claims on the other side by introducing misleading claims of his own.

    • “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.”

      On the flip side, it’s baffled me recently how much people deny that IPAB is a death panel while claming that it merely has the effect of a death panel. The last paragraph in your last link gives the game away, when it states that “health care providers may well abandon Medicare.”

    • Contrary to the comments above, this post is absolutely correct and the examples fully illustrate the issues with the Ryan Plan.

      I think we do have to allow that the Ryan Plan is premium subsidy and not a voucher plan, but that does not change the fact that it is not Medicare as we know it.

      Of course, the Republicans can always “trademark” Medicare as this post here advises.

      http://dismalpoliticaleconomist.blogspot.com/2011/05/republicans-plan-to-trademark-medicare.html

      and tht would make it “Medicare” but otherwise it is a radical change, see this

      http://dismalpoliticaleconomist.blogspot.com/2011/05/does-ending-medicare-mean-ending.html

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