• The standard critique of the Ryan-Rivlin plan

    Paul Van de Water expertly describes the standard critique of the Ryan-Rivlin plan in a Center on Budget and Policy Priorities paper (PDF). It takes the plan at face value and describes the consequences. I agree with Van de Water’s analysis.

    However, when I factor in the likely political dynamics, based on what I know about Medicare Advantage, I do not think things would play out as Rep. Ryan and Rivlin expect. That is, I do not believe the savings they anticipate would materialize. That also means the erosion of benefits would not occur, or wouldn’t be as severe.

    Neither outcome is particularly good. Benefits erosion would harm low-income beneficiaries. Failing to achieve cost savings would question the whole enterprise. Either way you slice it, it’s problematic.

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    • Replacing Medicare with vouchers takes Medicare out of the monopsony/price fixing business, for better or for worse. The short term impact on provider unit prices would be significant, and we’d lose CMS as a lever of policy reform.

    • what is the problem that ryan-ryvlin purports to solve?

    • It is impossible to take seriously a paper that contains the following sentence:

      “Rep. Ryan has erroneously described CLASS as “a new unfunded entitlement”; in reality, CLASS is designed to be self-sustaining from premiums paid by beneficiaries and interest earnings, and the Congressional Budget Office has determined that it can meet this goal.”