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Graph of the Day: Saving Seniors from Ryan
In December, Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-OR) offered a proposal that marked a compromise from Ryan’s original plan last year to convert Medicare into a voucher program. The new system offers a more generous framework to pay for seniors’ care and includes the traditional Medicare program as a “public option” within the system.
Unfortunately, the innovations of Ryan-Wyden run headlong into this graph:
As you can see, Medicare—and not the private, competitive market—has been the most effective at restraining health care cost growth. It’s not clear making a move toward the private market would reduce cost growth rather than accelerate it.
The Commonwealth Fund explains why: “Only Medicare, as the largest purchaser of health care, has sufficient clout to set payment rates while still engaging the participation of nearly all providers.” Ryan-Wyden would weaken that clout if individuals moved to private insurers, and without clearly cutting costs in exchange for doing so.
That’s not to say Ryan-Wyden is a waste. While it fails as a true compromise that brings progressives on board, it provides a possible starting point for a workable proposal.
As a first amendment, Ryan-Wyden must continue to guarantee Medicare’s health benefits to seniors even if they purchase their insurance elsewhere. Switching to “premium support” as Ryan’s original proposal did means guaranteeing seniors a dollar amount, which may or may not be up to the task of covering their care. Benefits must be guaranteed.
As Jonathan Cohn writes, “Wyden swears” the proposal does guarantee benefits, and “seems utterly sincere about this. But the policy provisions to back up that vow are not in the paper he and Ryan make public on Thursday. Mostly the document is just too vague.” There’s a reason for that vagueness, too. The proposal says the Medicare option and its competitors must offer seniors traditional Medicare benefits, and that the size of the subsidy is determined by the second-cheapest option. But the proposal also caps the vouchers at inflation plus one percent beginning in 2023.
The reason is simple: The non-partisan Congressional Budget Office won’t record any savings due to market competition. Both Ryan and Wyden believe their proposal will save money through competition and the cap won’t be necessary, but they’ve included it in order to show actual savings.
They shouldn’t. If competition doesn’t work, seniors shouldn’t be punished for the failed proposal. In contrast, an amendment to eliminate the cap and guarantee benefits means experimenting with a free market system, but without betting the farm on it.
A second amendment should also appeal to progressives: In exchange for moving Medicare towards a market system, the “public option” proposal should return for the general health insurance market and be added on top of the 2010 health reforms. This proposal does the same thing as the Ryan-Wyden Medicare reform, but in reverse. It experiments with a government-run program, but without betting the farm on it.
With these two changes, Ryan-Wyden might begin to take shape as a real compromise proposal. It would include the guaranteed benefits progressives must require of any reform proposal, free market solutions conservatives are demanding, and the potential to cut costs without committing too strongly to any unproven methods.
Posted in Health Care | Related Topics: Federal Government Health Care Reform Medicare/Medicaid Senior Issues
18 Comments
January 20, 2012 at 5:31 pm
Mondragon Corporation signed an agreement with the United Steelworkers in October, 2009 to set up cooperatives in the US. Look it up. Union meetings will tell you to sit down & shut up, the same as a coop meeting if the rest of the people & the meeting leaders disagree with your point. Thats human nature. I have friends in the steelworkers union & they havent had your problem, so cant help you there.
January 20, 2012 at 4:26 pm
Tony, there is NO UNION involvement in the Basque coops and no connection to any American Union, and no need for one. Yes they are one man one vote but unlike in Unions participation is mandatory. Also unlike most Unions these workers and their representatives are allowed to be heard not told to sit down and shut up like the Steelworkers Union here on the Range. As for you Paul, I don’t understand your point at all. What are you trying to articulate in that last post?
January 20, 2012 at 1:21 pm
Bill, your arguments go in circles. You complain about public employee unions which are run by public employees, so you hate public employees. Regular unions(which run the same way)are ok? Unions work on a one man, 1 vote system. Exactly the same as the Mondragon coops you talk about(which an American union has joined). You say they need to share power, with whom? Unions are made up of members, all sharing power together. Share with you? Join one & share their power, its what our parents did. Do it quickly, as your corporate masters are doing everything they can to end unions, which is the last bastion of power for the poor & middle class against the plutocrasy you seem to desire.
January 20, 2012 at 1:20 pm
Bill, one thing I have to give you credit for is mastering the art of political spin. When you can take the purist form of socialism, apply a few twists, and hold it up as a utopian alternative to something you like to call socialism (which is actually nothing of the sort), that takes spin doctoring to a level I’ve never seen before. It might work with the low information voters usually attracted to Republican candidates, but those who frequent this site are more inclined to see right through your ruse and recogize you as the most radical socialist on this board.
January 20, 2012 at 11:43 am
As for my alleged hatered of public employee’s Tony, that too is a missrepresentation. I have been quite clear that it is the Public Employee Unions, their radicals, and particularly the white collar activist elements of said unions that I object to. It is their arrogance, out of proportion power mongering, manipulation, and control through bullying that I object most of all. Only when these public employees are willing to proportioately share power will they again have my support. The catch 22 here is that much like Syria, the DFL leadership knows that any sharing of power will lead to the end of this fractional coalitions rule.
January 20, 2012 at 10:56 am
Well Bill, a conservative that doesnt count everything run for the common good as socialism. Unfortunately your rants tend to say otherwise. If the military doesnt serve the state(the people) who does it serve, and by the conservative definition of socialism, ANYTHING that serves the common people IS socialism. Just ask your leaders Limbaugh & Hannity. Your particular hate for govt. employees is interesting, seeing how this country & this state wouldnt exist with out them. Somebody has to plow the roads & clean our air & water. As a conservative you probably have no interest in those issues. Try putting out your fire instead of calling the fire dept. Conservatives called the Firewise” program in your area socialism & communism until they had those big forest fires, then they all became liberals when the firefighters put out the fires. We are all in this together & society collapses when we dont work together. Ask any liberal, they can explain it to you, we tend to be quite smart on these topics. We will talk slow if that helps..
January 20, 2012 at 9:19 am
Paul, I will not be put in the position of defending those I hate worse than socialists (Insurance Co.), so prove your point because I have never seen a TV exposee’ exposing such fraud. I have seen several such exposee’s done on the Medicare fraud issue by your beloved liberal press. As for the Basque system being the result of Robert Owen, you are dead wrong. While Robert Owen and other English Coop adventures were looked at in formulating the basis for the Mondagon Worker Coops, their inhearant faults were eliminated quite successfully with their power structure changes being most evident. These Coop are described as the next evolutionary step for socialism as they put the power into the hands of the worker not the State.
January 19, 2012 at 10:38 pm
First of all Tony millitary structures predate socialism. Our millitary is not now nor has it ever been a Socialist structure as it does not exist to serve the state. Don’t ever insult this veteran with that ignorant missgiuded sewage again.
Neither our schools nor our colleges were originally designed to be socialist, only White Collar Unionism has undermined our once great education system creating that change thank you. Lastly if you read the autobiography of Ben Franklin you will find the basic structure that went into all your other examples except our highway system, and I don’t see that as socialist either. Everything done by a group of citizens for their collective good is not socialism.
January 19, 2012 at 7:12 pm
Bill, do you really think filing false claims is called “commisions and profit” or are you just making stuff up again? Your ranting about socialism is quite ironic given that your preferred health care system, the “Basque Industrial Coops” is rooted in the priniciples of Robert Owen who is described by Wikipedia as “one of the founders of utopian socialism and the cooperative movement”. Who’s the big socialist here?
January 19, 2012 at 4:04 pm
Bill, Indian agents from the 1800’s? That’s your example of todays evil public servants? Makes your arguments kind of weak(as usual). Socialism? They called my Dad a socialist for supporting the 40hr week, paid vacations & overtime pay. They called Teddy Roosevelt(a Republican) a socialist for wanting to break up monopolys. Freeways, libraries, city pools and parks, public schools & colleges, the Army & Marines are all examples of what you call socialism. I call it freedom & the American way of life. You probably have used some of these & will collect social security when you get older. Does that make you a socialist?
January 19, 2012 at 3:14 pm
The commentary seems to be all about fraud, which is fine except that it neglects the possibility that Medicare, our least expensive insurance system except for the VA, which is 100% socialized, will be privatized by the right-wing zealots who pushed through the privatized drug plan.
In 2006, economist Dean Baker studied the Medicare drug plan and found that it cost us as a society (tax dollars plus seniors’ co-pays, deductibles and doughnut hole purchases) $80 billion per year more than it would have cost to simply add prescription meds to Medicare as a benefit and use the power of its huge risk pool to negotiate prices.
Last year, the retail cost of my drugs was $7,215.67 per Medicare’s statement. My out-of-pocket costs, including the deductible but not monthly premiums, was $2,684.53. This would have been $4575.67, but the feds paid $1891.14 toward doughnut hole purchases that I would have had to pay were it not for the new Affordable Health Care Plan.
My insurer paid a total of $2,640.00.
There is no reason to suppose that a completely privatized Medicare would save money for anyone other than the private insurance industry. Like Minnesota’s proposed “Healthy Minnesota Contribution Plan,” the government’s share of seniors’ expenses would end with paying part of the cost of premiums.
Who wins under a plan like this? The insurance industry, of course. Who pays? Folks trying to exist on Social Security and, if they’re lucky, modest pension plans.
January 19, 2012 at 2:53 pm
You forgot one figure Gregg, 500 million out of “HOW” many Billion? A fractional improvement at best. Paul, your figure is as bad as Gregg’s without anything to give it meaning. As for Fraud with private insurers, we call that commisions and profit. As for public employees being evil Tony, perhaps some of you should look at the Indian agents of a little over a Century ago. Yes some public employees are evil, but not as evil as absolute failure we call Socialism.
January 19, 2012 at 1:34 pm
Medeicare fraud is real, but according to the private insurance companies their fraud is worse, so its everywhere. Adding investigators will cut this down but you know, those are govt. employees & some people think their evil, whether they save us money or not…
January 19, 2012 at 11:28 am
Government haters who whine about Medicare fraud like to pretend there’s no fraud in private insurance. The Obama administration ramped up Medicare fraud investigations by 85% last year which makes the numbers look bad, but at least they’re exposing the fraud, unlike private insurers who keep it covered up.
January 19, 2012 at 11:01 am
Obama’s health care reform addresses the fraud problems with medicare by adding more investigators. In fact they estimate $500 million in savings. The GOP claims that this is cutting medicare when it really is only cutting out the fraud.
January 19, 2012 at 9:24 am
When are the people of this country ever going to wake up to these money grabbing Tea Party Republicans? These Tea Party Republicans are with out question the reason this country is in such a disaray with their anti-American phosophy.
January 19, 2012 at 9:19 am
Your single graph does little or nothing to describe growth in medicare or fraud within medicare. With medicare growing exponetially as more Americans are added to it, so does fraud. Now running inexcess of 20%, this compromise does nothing to address controling that fraud. I am very tired of this selective failure by Democrats to even acknowledge fraud exists. Supporting any medicare reform that refuses to deal with fraud is beyond my ability to support.
W. D. (Bill) Hamm says:
January 20, 2012 at 6:45 pm
You may be right Tony and that is differnt than having an involvement in the Coops. I have been telling Steelworker leaders here on the range for over 20 years that worker ownership is the future for workers, maybe someone actually lisened. It is surprising to me considering they are the most Stalinistic Union I know of. I was a member who when I filed for union president soon found myself fighting both the union and the company working together. I pulled 1/3rd of the vote even after losing my arbitration hearing. Don’t ever lecture me on the theiving Steelworkers Union, 2 of my brothers and many friends are tied up in the battle at KeeTac overstolen retirement pay.