Ryan Flinched on Medicare

Path to Prosperity, Paul Ryan’s budget proposal, beats a significant retreat from last year’s Roadmap for America’s Future. The Roadmap contained a very precise “payment” (in Ryan’s words) of $11,000 — to be adjusted for future inflation by a factor combining changes in the Consumer Price Index and changes in medical prices — for future Medicare beneficiaries who are now under 55 years of age. Furthermore, you could have taken the “payment” and used it to “to pay for one of the Medicare certified plans, or any other plan, such as those offered by former employers or available from the private market” (p. 51).

Path to Prosperity, however, eliminates the “payment” in favor of the woolier “premium support.” Nor does it even report how it would calculate this premium support, beyond asserting that “wealthier beneficiaries would receive a lower subsidy” (p. 46). It never ceases to amaze me that conservative policy analysts cheer such a notion, which in any other environment we correctly label “increasing marginal income tax rates.” One professor who hates the proposal figures that the average “premium support” will be about $15,000.

Worse, we won’t be using our “premium support” to buy whatever policy we want, but choosing it from a federal “tightly regulated exchange” (p. 47). Can’t we put any talk of “exchanges” to bed until we finally get rid of Obamacare? Currently, discussion of “exchanges” only serves only to confuse people about the role of the state in determining our health benefits. Nor will we be receiving the money and then sending it to the plan of our choice, as we would have with our payment under the Roadmap. Ryan insists that the money “doesn’t go to the person, into the marketplace. It goes to the plan.”

If this is a tactic to avoid the dreaded “V” word, it’s not working. John Podesta of the Center for American Progress immediately attacked the “voucher,” and so has every critical comment I’ve read in the last few days. Why the fear? We have a voucher for seniors that is just as “popular” as Medicare and has resulted in a program that is in significantly less fiscal distress than Medicare despite being three decades older. It’s called Social Security.

Why a politician with the skills of Paul Ryan would retreat from a plan to reform Medicare by increasing seniors’ Social Security checks by $11,000 or $15,000 annually, and replace it with one to send the money directly to the despised health insurers, is beyond my understanding. Unfortunately, Ryan has surrendered critical ground on Medicare reform.

(Crossposted at National Review Online.)