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Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?

During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.

According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.

While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”

In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.

Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.

This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.

Using this standard alone, Rep. Ryan would have a point.

Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.

However, there is a more important distinction between premium support plans and vouchers.

In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.

Not so with RyanCare.

Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.

This, by anyone’s definition, is a voucher program.

In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.

While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.

According to Aaron-

If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.

Via Washington Post

Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.

We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.

However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.

It is not the President who is demagoguing on this one – it is Paul Ryan.

 

By: Rick Ungar, The Policy Page, Forbes, June 5, 2011

June 6, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Consumers, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Ideology, Lawmakers, Medicare, Politics, President Obama, Public Health, Rep Paul Ryan, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Wealthy | , , , , , , , , , , , , , | Leave a comment

GOP And Media Alert: Vouchercare Is Not Medicare

What’s in a name? A lot, the National Republican Congressional Committee obviously believes. Last week, the committee sent a letter demanding that a TV station stop running an ad declaring that the House Republican budget plan would “end Medicare.” This, the letter insisted, was a false claim: the plan would simply install a “new, sustainable version of Medicare.”

But Comcast, the station’s owner, rejected the demand — and rightly so. For Republicans are indeed seeking to dismantle Medicare as we know it, replacing it with a much worse program.

I’m seeing many attempts to shout down anyone making this obvious point, and not just from Republican politicians. For some reason, many commentators seem to believe that accurately describing what the G.O.P. is actually proposing amounts to demagoguery. But there’s nothing demagogic about telling the truth.

Start with the claim that the G.O.P. plan simply reforms Medicare rather than ending it. I’ll just quote the blogger Duncan Black, who summarizes this as saying that “when we replace the Marines with a pizza, we’ll call the pizza the Marines.” The point is that you can name the new program Medicare, but it’s an entirely different program — call it Vouchercare — that would offer nothing like the coverage that the elderly now receive. (Republicans get huffy when you call their plan a voucher scheme, but that’s exactly what it is.)

Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.

And most seniors wouldn’t be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved. Based on the budget office estimates, the typical senior would end up paying around $6,000 more out of pocket in the plan’s first year of operation.

By the way, defenders of the G.O.P. plan often assert that it resembles other, less unpopular programs. For a while they claimed, falsely, that Vouchercare would be just like the coverage federal employees get. More recently, I’ve been seeing claims that Vouchercare would be just like the system created for Americans under 65 by last year’s health care reform — a fairly remarkable defense from a party that has denounced that reform as evil incarnate.

So let me make two points. First, Obamacare was very much a second-best plan, conditioned by perceived political realities. Most of the health reformers I know would have greatly preferred simply expanding Medicare to cover all Americans. Second, the Affordable Care Act is all about making health care, well, affordable, offering subsidies whose size is determined by the need to limit the share of their income that families spend on medical costs. Vouchercare, by contrast, would simply hand out vouchers of a fixed size, regardless of the actual cost of insurance. And these vouchers would be grossly inadequate.

But what about the claim that none of this matters, because Medicare as we know it is unsustainable? Nonsense.

Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on. And a number of reforms of that kind are, in fact, included in the Affordable Care Act. But with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.

Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their G.D.P. on health care. Since then, as United States health spending has soared to 16 percent of G.D.P., Canadian spending has risen much more modestly, to only 10.5 percent of G.D.P. And while Canadian health care isn’t perfect, it’s not bad.

Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.

So in voting for the House budget plan, Republicans voted to end Medicare. Saying that isn’t demagoguery, it’s just pointing out the truth.

By: Paul Krugman, Op-Ed Columnist, The New York Times, June 5, 2011

June 6, 2011 Posted by | Affordable Care Act, Budget, Conservatives, Consumers, Elections, GOP, Government, Health Care Costs, Health Reform, Ideologues, Ideology, Journalists, Lawmakers, Media, Medicare, Politics, Pundits, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Voters | , , , , , , , , , , , , , , , , , | Leave a comment

   

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