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December 15, 2011

Paul Ryan Pitches New Medicare Reform Plan, With Democrat Ron Wyden Joining Him; But Plan Seems To Contain Much Less Structural Reform

Ben Domenech has some questions for Ryan. He's not sure how these proposals would actually reform the program.

While the initial reaction will be negative for Wyden giving Ryan political cover for premium support, in the long game he has nothing to lose here. Ryan, on the other hand, has a lot to lose - he is a thought leader, sometimes viewed in the press as the thought leader, on budget and entitlement policy for the right... which means he gave up a lot more to do this and his movement has more impact on his party.

My concern is that Ryan's timing and the nature of this plan will be viewed as a walkback, one that weakens the hand of Republicans going into the presidential, and creates conflict for his fellow House and Senate members who stuck their necks out to support his budget and now will be confronted by more questions.

The blueprint for the plan is hard to understand, and seems to be a hodgepodge of smaller-bore widgets that don't seem likely to reduce Medicare costs.

I gotta tell ya, it reads more like a campaign document than a real plan.

The National Journal summarizes:

People 55 and over now would be unaffected by the proposal. But starting in 2022, it would introduce a “premium support” system that would allow seniors to choose between enrolling in traditional Medicare or in a Medicare-approved private plan.

"Doing it this way harnesses the power of choice and competition," Ryan said.
“Unlike Medicare Advantage, these private plans would compete head-to-head with traditional, fee-for-service Medicare on a federally regulated Medicare exchange,” the lawmakers wrote in a Wall Street Journal commentary.

Unlike similar proposals, including those from presidential candidates Newt Gingrich and Mitt Romney, the Wyden-Ryan plan includes a number of consumer protection provisions designed to ensure that competing plans maintain similar benefits to those of traditional Medicare.

Part of the plan insists that these private plans be just as "comprehensive" as Medicare.

But if they're just as comprehensive, why would they be cheaper? It's my opinion that a major driver of costs is that the actual service-user is not, in any real sense, the service-payer; he's held harmless as to costs, and doesn't have much interest in patrolling his medical bill for those $100 bills for crutches or $30 fees for aspirin.

If it's the same flawed model, now just administered by a government-regulated corporation, where exactly will the downward pressure on prices come from?

Good Summary: Yuval Levin thinks this is more of a reform than Domench does, and is keener on it.

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posted by Ace at 12:01 PM

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