This week, Paul Ryan wrote an op-ed in the Washington Post entitled A road map to saving Medicare. A better title for the article would have been "A Radical Prescription For Changing Medicare As We Know It".
Ryan's thesis is basically that we need to rein in costs at all levels of government spending. Fair enough. What's arguable is that he does it by removing government spending. How? By turning risk over to individuals. His proposals (the "Roadmap") can be found here, with areas of concentration in health care, social security and tax policy.
One problem is in the numbers. Paul Krugman:
Its numbers indicate that the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers The Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.
And that’s about the same as the budget office’s estimate of the 2020 deficit under the Obama administration’s plans. That is, Mr. Ryan may speak about the deficit in apocalyptic terms, but even if you believe that his proposed spending cuts are feasible — which you shouldn’t — the Roadmap wouldn’t reduce the deficit. All it would do is cut benefits for the middle class while slashing taxes on the rich.
While there are more detailed rebuttals of Ryan's entire argument (this one by Paul Van de Water from the Center on Budget and Policy Priorities), his Medicare proposals deserve a closer look. Krugman, again:
After 2020, the main alleged saving would come from sharp cuts in Medicare, achieved by dismantling Medicare as we know it, and instead giving seniors vouchers and telling them to buy their own insurance. Does this sound familiar? It should. It’s the same plan Newt Gingrich tried to sell in 1995.
But let's hear it from Ryan:
Future Medicare beneficiaries would receive a payment to apply to a list of Medicare-certified coverage options. The Medicare payment would grow every year, with additional support for those who have low incomes and higher health costs, and less government support for high-income beneficiaries. The most vulnerable seniors would also receive supplemental Medicaid coverage and continue to be eligible for Medicaid's long-term care benefit.
In other words, vouchers. Give seniors a fixed amount of money, and if that doesn't cut it (and it won't), let them eat Medicaid. The irony of Ryan railing against Democrats for expanding Medicaid is not lost on me.
For a more detailed line by line fisking of Ryan's Medicare article, Dean Baker (The Center for Economic and Policy Research) has a very readable post here:
Of course Ryan's plan would end Medicare as we know it. It replaces a Medicare system that pays directly for health care with a voucher system. The voucher is explicitly designed not to keep pace with health care costs. Ryan describes the rate of increase in the size of the voucher as "a blended rate of the CPI and the medical care component of the CPI." In other words, something less than the rate of increase in health care costs. It is also means-tested, so that individuals with incomes above $80,000 would see their voucher cut in half (we might see a lot of people earning $79,999 under the Ryan plan) and those with incomes over $200,000 would not get the voucher...
Ryan then describes his Medicare voucher:
"The Medicare payment would grow every year, with additional support for those who have low incomes and higher health costs, and less government support for high-income beneficiaries."
Actually, the payment is explicitly designed to fall behind the rate of medical care cost inflation. Rather than those with lower incomes getting more, those with higher incomes (above $80,000 a year) would fall further behind inflation.
So, why don't we simply tell seniors that Ryan's plan eliminates Medicare as we know it now, reintroduce Gingrich's idea of vouchers for seniors, and leaves seniors with the risk should they not be able to find a commercial plan that covers them? Ah, Ryan has an answer for that:
The Democratic leadership will seek to brand every Republican running for office with my road map.
You betcha. Republicans are running from this plan as fast as they can, because Ryan's plan really is radical.
I asked CBPP's Van de Water for a comment about the overall plan:
The scariest thing about the Ryan plan is that it gets such respectful attention. Ryan’s Roadmap provides huge tax cuts for the rich while it raises taxes on most everyone else, privatizes Social Security, eliminates guaranteed Medicare benefits, and fails to stem the rising tide of debt. It’s an extremely radical proposal that shouldn’t be taken seriously and certainly doesn’t represent a reasonable starting point for a discussion of the federal budget.
That is scary. Ryan's numbers don't add up, as Krugman and others have noted, and Republicans want no part of it. But the media is not doing a great job of covering that. As far as the job they are doing, here's Brad DeLong:
Why oh why can't we have a better press corps?
There should be resignations from the Washington Post today in protest of their running their unfact-checked piece by Republican representative Paul Ryan. You'd think they'd be embarrassed to be complicit in yet more selling of deficit-exploding plans as deficit-reducing ones.
But, then, it is a freezing day in August when there shouldn't be resignations in protest from the Washington Post, isn't it.
There are other provisions in Ryan's proposal that also merit attention. Fromm Van de Water's post at CBPP:
The Ryan proposal would also replace the tax exclusion for employer-sponsored health insurance with a refundable tax credit for people to buy health coverage — the equivalent of a voucher. By eliminating the tax exclusion without providing incentives for employers to continue offering health coverage, the plan would likely cause a substantial decline in employer-based coverage.
One of the reasons Wyden-Bennett didn't go further in the Senate is because of the concerns about the effect on employer-based health insurance, generally not addressed by the press that prints his op-eds. And a big picture summary from van de Water:
The Roadmap would give the most affluent households a new round of very large, costly tax cuts by reducing income tax rates on high-income households; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax. At the same time, the Ryan plan would raise taxes for most middle-income families, privatize a substantial portion of Social Security, eliminate the tax exclusion for employer-sponsored health insurance, end traditional Medicare and most of Medicaid, and terminate the Children’s Health Insurance Program.
That's a lot of responsibility shifting (and we haven't even touched on Social Security.)
But rather than the pejoratives from Ryan (who went on Glenn Beck to decry progressive ideas as a "cancer"), let's lay out single payer, the current system and Ryan's Roadmap side by side and see what we get. Let's have a discussion about shifting responsibility from the Feds to individuals ill-prepared for what Ryan is suggesting, but let's do it honestly. If the Republicans really want to run on dismantling the government safety net in the middle of a recession, let's just lay it out on the table and have a vote.