The Democrats Have A Plan For Controlling Health-Care Costs, Paul Ryan Doesn’t
There’s increasingly an understanding that the mixture of cuts and taxes in Paul Ryan’s budget aren’t quite fair, and the underlying assumptions it uses don’t quite work. But it’s left people hungry for a budget that does work, and annoyed that Democrats haven’t provided one. “If Democrats don’t like his budget ideas, they should propose their own,” writes Fareed Zakaria. “The Democrats and Obama now have to offer a response,” warned Andrew Sullivan. “As of this evening, the Democratic policy plan consists of yelling ‘You suck!’” complained Megan McArdle.
I’ve made similar comments. And I think those comments are mostly right. Democrats need to step up on taxes, on defense and non-defense discretionary, on Social Security, and on energy. But there’s one huge, glaring exception: controlling health-care costs. There, the reality is that Democrats have a plan and Ryan doesn’t. But the perception, at this point, is just the opposite.
At the heart of Ryan’s budget are policies tying the federal government’s contribution to Medicare and Medicaid to the rate of inflation — which is far, far slower than costs in the health-care sector typically grow. He achieves those caps through cost shifting. For Medicaid, the states have to figure out how to save the money, and for Medicare, seniors will now be purchasing their own insurance plans and, in their new role as consumers, have to figure out how to save the money. It won’t work, and because it won’t work, Ryan’s savings will not materialize.
Even Ryan’s fans agree you can’t hold health-care costs down to inflation. But even if you grant that Ryan’s target is too low, his vision for reforming Medicare would like miss a more reasonabke target, too. Consider the program Ryan names as a model. He said his budget converts Medicare into “the same kind of health-care program that members of Congress enjoy.” The system he’s referring to is the Federal Employee’s Health Benefits Program, and cost growth there has not only massively outpaced inflation in recent years, but actually outpaced Medicare, too. Ryan’s numbers are so fantastic that Alice Rivlin, who originally had her name on this proposal, now opposes it.
Democrats don’t just have a proposal that offers a more plausible vision of cost control than Ryan does. They have an honest-to-goodness law. The Affordable Care Act sets more achievable targets, and offers a host of more plausible ways to reach them, than anything in Ryan’s budget. “If this is a competition betweenRyan and the Affordable Care Act on realistic approaches to curbing the growth of spending,” says Robert Reischauer, who ran the Congressional Budget Office from 1989 to 1995 and now directs the Urban Institute, “the Affordable Care Act gets five points and Ryan gets zero.”
The Affordable Care Act holds Medicare’s cost growth to GDP plus one percentage point, which makes a lot more sense. It’s the target Ryan’s Medicare plan originally used, back when it was called Ryan-Rivlin. But the target is not really the important part. The important part is how you achieve the target. And the Affordable Care Act actually includes reforms and new processes for future reforms that would help Medicare — and the rest of the medical system — get to where the costs can be saved, rather than just shifted.
The Affordable Care Act’s central hope is that Medicare can lead the health-care system to pay for value, cut down on overtreatment, and cut out treatments that simply don’t work. The law develops Accountable Care Organizations, in which Medicare pays one provider to coordinate all of your care successfully, rather than paying many doctors and providers to add to your care no matter the cost or outcome, as is the current practice. It also begins experimenting with bundled payments, in which Medicare pays one lump-sum for all care related to the successful treatment of a condition rather than paying for every piece of care separately. To help these reforms succeed, and to help all doctors make more cost-effective treatment decisions, the law accelerates research on which drugs and treatments are most effective, and creates and funds the Patient-Centered Outcomes Research Institute to disseminate the data.
If those initiatives work, they head over to the Independent Payment Advisory Board (IPAB), which can implement cost-controlling reforms across Medicare without congressional approval — an effort to make continuous reform the default for Medicare, even if Congress is gridlocked or focused on other matters. And if they don’t work, then it’s up to the Center for Medicare and Medicaid Innovation, a funded body that will be continually testing payment and practice reforms, to keep searching and experimenting, and when it hits on successful ideas, handing them to the IPAB to implement throughout the system.
The law also goes after bad and wasted care: It cuts payments to hospitals with high rates of re-admission, as that tends to signal care isn’t being delivered well, or isn’t being follow up on effectively. It cuts payments to hospitals for care related to infections caught in the hospitals. It develops new plans to help Medicare base its purchasing decisions on value, and new programs to help Medicaid move patients with chronic illnesses into systems that rely on the sort of maintenance-based care that’s been shown to successfully lower costs and improve outcomes.
I could go on, but instead, I’ll just link to the Kaiser Family Foundation’s excellent primer (pdf) on everything the law does. The bottom line is this: The Affordable Care Act is actually doing the hard work of reforming the health-care system that’s needed to make cost control possible. Ryan’s budget just makes seniors pay more for their Medicare and choose their own plans — worthy ideas, you can argue, but ideas that have been tried many times before, and that have never cut costs in the way Ryan’s budget suggests they will.
That’s why, when the Congressional Budget Office looked at Ryan’s plan, they said it would make Medicare more expensive for seniors, not less. The reason the deficit goes down is because seniors are paying 70 percent of the cost of their insurance out-of-pocket rather than 30 percent. But that’s not sustainable: We’ve just taken the government’s medical-costs problem and pushed it onto families.
No one who knows health-care policy will tell you that the Affordable Care Act does everything we need to do in exactly the way we need it done. That’s why Resichauer gave it a five, not a 10. But it does a lot of what we need to do and it sets up systems to help us continue doing what’s needed in the future.
Ryan’s proposal, by contrast, does almost none of what we need to do. It appeals to people who have an ideological take on health-care reform and believe we can make Medicare cheaper by handing it over to private insurers and telling seniors to act like consumers. It’s a plan that suggests health-care costs are about insurance, as opposed to about health care. There’s precious little evidence of that, and when added to the fact that Ryan’s targets are so low that even his allies can’t defend them, the reality is that his savings are largely an illusion.
The Affordable Care Act has taken a lot of hits. It’s not popular, and though very few of the political actors confidently attacking or advocating it can explain the many things it’s doing to try and control costs, people have very strong opinions on whether it will succeed at controlling costs. But the irony of everyone demanding Democrats come up with a vision for addressing the drivers of our deficit in the years to come is that, on the central driver of costs and the central element of Ryan’s budget, Democrats actually have something better than a vision. They have a law, and for all its flaws, their law actually makes some sense. Republicans don’t have a law, and their vision, at this point, doesn’t make any sense at all.
By: Ezra Klein, The Washington Post, April 8, 2011
GOP DeathWish?: Republicans Pushing To Revamp Medicare Could Find Themselves Voted Out Of Office In The Next Election
One of the biggest and most frequent mistakes in politics is for a party to misread its mandate. When it happens, independent and swing voters get angry and punish a candidate or a party on Election Day. Because American politics is a zero-sum game, punishing one party means rewarding the other party—even when the latter is not necessarily deserving of support. Frequently, the party that benefits from the spanking mistakenly interprets it to mean that the public is embracing every aspect of its agenda. Republicans shouldn’t forget that their party had dismal favorable/unfavorable poll ratings last fall. They won because they weren’t Democrats.
There is no question that the Republican base, conservatives, and supporters of the tea party want to take a meat ax to government spending. When Republican congressional members return home and meet with their constituents, they are encouraged to vote against continuing resolutions and for deep spending cuts. These supporters have intensity, and they adamantly oppose any compromise with Democrats.
It would be a blunder, however, to think that such views drove the election. Republicans, conservatives, and tea partiers did not throw Republicans out of their House and Senate majorities in 2006, and they did not vote to increase the size of the Democratic majorities and elect Barack Obama president in 2008.
Independent voters were the ones who cast their ballots for Democrats by an 18-point margin in 2006 because they were mad at President Bush and upset about the war in Iraq, not to mention Republican scandals and the general performance of the GOP Congress. Two years later, these same voters were still angry at the president, were afraid of the financial crisis, and didn’t care for GOP presidential nominee John McCain.
In 2010, these independent voters were unimpressed by the economic-stimulus package, didn’t like cap-and-trade environmental regulation, and really didn’t like the Democratic health care package. Those over or approaching 65 years of age also feared that health care reform would erode Medicare benefits. Even those unaffected by the reforms rallied to defend Medicare.
Polling is very clear. Most voters want to see the federal budget balanced and spending cut. However, they don’t want Social Security, Medicare, or Medicaid touched, and, oh yes, they don’t want taxes increased. Now, anyone with an IQ over room temperature knows that all of this is impossible. Spending on Social Security, Medicare, and Medicaid, along with interest on the national debt, amounts to approximately half the federal budget.
There is no doubt that significant budget cutting is necessary and that Medicare and Medicaid must be reformed. No one can doubt the courage or sincerity of House Budget Committee Chairman Paul Ryan, R-Wis. But it’s little short of suicidal to drop a Medicare reform package—even a voucher plan that would be optional for those currently older than 55—into tough budget negotiations stymied over Republican demands for deep spending cuts. Democrats have some experience with older voters going ballistic, even with changes that wouldn’t affect them.
For many seniors, doing anything to Medicare that can’t be portrayed as an increase is essentially a cut, and they will fight it to their last breath. From a political standpoint, Medicare reform is very dangerous territory. House Republicans are not just pushing the envelope—they are soaking it with lighter fluid and waving a match at it.
One can understand why Republicans are pushing so hard. Their base is demanding that they do so. And if congressional Republicans resist, many of them can look forward to primary opposition next year. But it seems that GOP members of Congress have become so consumed with pleasing their base that they are ignoring general-election voters and the independents who drive the wild gyrations in American politics.
Congressional Republicans would be well advised to pay attention to the results of the latest Pew Research Center poll (conducted March 30 to April 3 among 1,057 adults) that asked Americans whether they would prefer that their lawmakers stand by their principles even if it meant that the government would shut down, or whether they would rather have their lawmakers compromise on a budget even if they didn’t agree with it. Among Republicans and Republican-leaning independents who agree with the tea party movement, 68 percent said they would rather have a lawmaker who stands by his or her principles. But among all Republicans, only 50 percent said stand by their principles, while 43 percent said compromise. Among all adults, 55 percent said compromise; among independents, 53 percent said compromise, with 36 percent siding with the principles option.
The bottom line: GOP primary voters are very different from general-election voters. It would be a very shortsighted strategy for Republican members—especially those in swing districts—to focus too much on primary voters. A lot of Democrats did the same thing in 2009 and 2010. Many are now former members of Congress.
By: Charlie Cook, National Journal, April 7, 2011
No, Rep Paul Ryan’s Budget Proposal Is Not Brave
Prominent opinion writers have spent the last few days fawning over Rep. Paul Ryan’s budget plan, which would essentially abolish Medicare and Medicaid while lowering taxes on top earners, and many of them have deployed a litany of superlatives usually reserved for costumed superheroes. Commentators like David Brooks and Jacob Weisberg have described Ryan’s plan as “brave,” and “bold,” and the word “courageous” has been ubiquitous.
But the closer people look at Ryan’s plan, the clearer it becomes that the plan isn’t all that brave. Let’s take stock of all the recent revelations about it.
Ryan’s plan included a laughably implausible unemployment analysis from Heritage predicting it would bring unemployment down to 4 percent by 2015 and 2.8 percent by 2012 — an analysis Heritage then quitely retracted by attempting to disappear it from the internet. Ryan’s plan claims to save money while repealing the Affordable Care Act, even though the CBO has said repealing the ACA will increase the deficit. Ryan implied that his plan was supported by President Bill Clinton’s former OMB Director Alice Rivlin, even though it isn’t. It cuts taxes on top earners, when the easiest way to reduce the deficit is to let the Bush tax cuts expire.
Ryan’s misleading claims aren’t the only thing that isn’t particularly brave about his plan. After accusing Democrats of “raiding” Medicare with the Affordable Care Act, Ryan spares the elderly voters who supported Republicans in 2010 by making sure only he guts medical care for future seniors (he still calls it “saving Medicare,” however). And as the Center for Budget and Policy Priorities noted, 2.9 trillion in Ryan’s budget comes from cuts in programs focused on low-income Americans. It doesn’t touch defense spending.
In other words, it focuses on cuts to programs that benefit those most likely to vote Democratic, while preserving programs that serve those more likely to vote Republican.Rewarding your constituencies while punishing the other side’s is how partisan politics usually works, but there’s nothing particularly brave about it.
Ryan himself said during the rollout that his plan isn’t so much a budget as a “cause.” As Steve Benen wrote yesterday, the cause here is destroying the modern welfare state so that rich people have to pay less in taxes. The only reason so many people think Ryan’s plan is “brave” is because they agree with this cause.
When we call a person brave, what we usually mean is that his or her “bravery” is being employed towards an end we agree with. In this case, those who are hailing Ryan’s proposal as brave are doing so because they agree with its goal, which — no matter how many times people insist otherwise — is not deficit reduction. It’s destroying the social safety net. It just so happens that’s a cause a lot of wealthy people with a disproportionate influence on our political discourse happen to believe in. So they think it’s brave, even if the numbers are phony and even if it disproportionately punishes the poor. But there’s nothing at all brave about it.
By: Adam Serwer, The Washington Post, April 7, 2011
Tea Party Budgeting: Everyone Doesn’t Deserve A Fair Shot
Three lessons I’ve learned from Tea Party budgeting:
1. Charles Lightroller was a chump.
Lightroller was the second mate on the Titanic. Legend holds that no one enforced the command to allow women and children to board the lifeboats first more rigorously than he did. Some call him a hero. But not me. That’s because I, like Rush Limbaugh, think Paul Ryan’s budget is “wonderful.”
And how could you not? Ryan surveys the budget battlefield and here’s what he sees: on one side, an onrushing horde of seniors, working people, and the disabled. On the other, defenseless corporations and their affluent compatriots prancing like happy kittens amongst the flowers. In the face of such forbidding odds some might duck, but Ryan strides onto the field of play and bravely interposes himself between the conflicting parties, prepared to defend the defenseless come what may.
Here’s what that looks like: Medicare, the health program relied on by millions of seniors, is replaced with a benefit guaranteed to fall further and further behind the actual cost of healthcare. Medicaid (healthcare for people with low-incomes) sustains deep cuts. But tax rates on corporations and the highest earners are lowered, while subsidies for oil companies remain untouched. Truly a profile in courage.
2. Pell Grants are destroying America.
I feel badly for not recognizing it, but it seems so obvious now. Freeloaders figured out how to get free food, free housing, and free electricity years ago, but they’ve never been able to reach the Holy Grail: free Biology of the East African Mud Turtle 101. Until now. “You can go to school,” warns Rep. Denny Rehberg of Montana, “collect your Pell Grants, get food stamps, low-income energy assistance, Section 8 housing, and all of a sudden we find ourselves subsidizing people that don’t have to graduate from college.”
Welfare cheats scheming to take the college courses of their dreams? (And then not graduate!) It’s an outrage. How many of them are sitting in a college cafeteria right now snickering over a steaming plate of American Chop Suey? (Purchased with food stamps, natch.) “It’s turning out to be the welfare of the 21st century,” Rehberg says. Talk about getting schooled: that’s got to be one of the smartest theories I’ve ever heard.
Of course, it’s not just Pell Grants that are so nefarious. It’s Head Start too, and Medicare, and Medicaid, and …(hence, Lesson 1 above).
3. Better than Government? Fairies.
A signal question in American political life today is: when things go wrong, what role, if any, should government play in trying to make things right?
We seem to have settled on some answers. When we’re to blame for the bad things that happen, we’re on our own. The same is true when we do our best but lose fair and square. But what about when people encounter difficulties through no fault of their own and in a way that offends our sense of fairness? A kid who’s born into a family without the means to send him to a good school, or a mother who works hard every day but loses her employment because global economic forces are moving manufacturing jobs to other countries? Should government lend a hand in those kinds of cases?
The Ryans and the Rehbergs conceive of a government that does so less and less. They say the benefit of helping the disadvantaged is outweighed by its expense. What they don’t say is what happens to people who no longer can rely on needed government assistance. Perhaps magical fairies come along, wave their magic wands, and everyone who used to get a Pell Grant can still go to college, only this one is taught by chocolate bunnies! And all those people who can’t afford healthcare anymore? It’s OK. They’re now living in a cottage made entirely of gingerbread!
Let me be clear: there’s every reason to be serious about reducing the budget deficit. Political leaders on both sides of the aisle should be open to good faith ideas that emanate from anywhere on the political spectrum. But it’s reasonable to ask whether using concern over the deficit as an excuse to accomplish purely ideological goals can be considered serious.
Democrats agree that the private sector should be the engine that drives our economy and that we need the discipline to cut government programs that aren’t working. But there’s something else we believe that sets us apart from the Tea Partyers: there’s a promise inherent to the American free market system that says everyone deserves a fair shot, and that promise goes unfulfilled when people are disadvantaged by forces beyond their control and we all stand by and do nothing about it.
In other words, bring back Charles Lightroller. Boy, do we need him.
By: Anson Kaye, U.S. News and World Report, April 7, 2011
The Budget Battles: Prosperity for Whom?
If the House Republican budget blueprint released on Tuesday is the “path to prosperity” that its title claims, it is hard to imagine what ruin would look like.
The plan would condemn millions to the ranks of the uninsured, raise health costs for seniors and renege on the obligation to keep poor children fed. It envisions lower taxes for the wealthy than even George W. Bush imagined: a permanent extension for his tax cuts, plus large permanent estate-tax cuts, a new business tax cut and a lower top income tax rate for the richest taxpayers.
Compared to current projections, spending on government programs would be cut by $4.3 trillion over 10 years, while tax revenues would go down by $4.2 trillion. So spending would be eviscerated, mainly to make room for continued tax cuts.
The deficit would be smaller, but at an unacceptable cost. Health care would be hardest hit, followed by nonsecurity discretionary spending — the sliver of the budget that encompasses annually appropriated programs. Those include education, scientific research, environmental preservation, investor protection, disease control, food safety, federal law enforcement and other areas that bear directly on the quality of Americans’ daily lives. The proposed cuts in such programs are $923 billion deeper than President Obama called for in his 2012 budget, which pushed the edge of what is politically possible.
Another big cut — $715 billion over 10 years — comes from mandatory spending other than Social Security and the big health care programs, a category that includes food stamps and federal retirement.
The blueprint does not call for any specific changes to Social Security, but, without explanation, it assumes a reduction of $1 trillion over 10 years in the program’s surplus. That would weaken the program by hastening the insolvency of Social Security.
When he unveiled this plan, Paul Ryan, a Republican of Wisconsin and the chairman of the House Budget Committee, declared, “This isn’t a budget. This is a cause.”
There is much truth in that. The blueprint is not a serious deficit reduction exercise for many reasons, the most important of which is that serious deficit reduction requires everything to be on the table, including tax increases. The plan released at the end of last year by the Obama deficit commission was one-third tax increases and two-thirds spending cuts. President Obama’s budget calls for a mix of tax cuts and tax increases, among the latter, letting high-end Bush tax cuts expire at the end of 2012. The Republican plan calls only for tax simplification. It would get rid of loopholes and reduce rates in a way that would not raise overall revenues but would invariably cut the tax bill of wealthy taxpayers for whom lower rates are more valuable than assorted loopholes.
The deficit is a serious problem, but the Ryan plan is not a serious answer. With its tax cuts above all, and spending cuts no matter the consequences, it is a recipe for more loud talk about the deficit but no real action.
By: Editorial, The New York Times, April 5, 2011
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