Wednesday, December 14, 2011

Paul Ryan is Born Again!!!

We may have been a bit too harsh on Paul Ryan.

Ryan is apparently getting together with Senator Ron Wyden, an Oregon Democrat, to put together a new Medicare proposal and it actually looks ... reasonable! Or at least far more so than Ryan's earlier package. Some details:
Like the Ryan plan adopted in April, it would shift the fundamental structure of Medicare from a "defined benefit" program to a "defined contribution" program, in which the government would subsidize health care premiums for seniors, and those seniors would use the subsidy to purchase health insurance from a menu of government-approved private plans. But a traditional Medicare fee-for-service plan would be among the options seniors can choose from. Private plans would be competing with traditional Medicare to cover seniors, according to the plan.
That basically makes Medicare a "public option" among many others.

More importantly:

Compared to the earlier Ryan plan, the new proposal also takes a different approach in how it sets the premium subsidies for seniors, and the rate at which those subsidies could grow over time, as medical costs rise.

One of the chief criticisms of the Ryan plan passed by the House is that with increases in premium subsidies indexed to overall inflation, and health costs rising much faster than inflation, beneficiaries over time would be forced to pay the difference. In other words, the buying power of the premium subsidy would steadily erode.
That's good ... or at least much, much better. Our preference would be to put in cost controls for medical costs, but being realists we know that's probably never going to happen.I know there will be more than a few Dems who call this kind of Medicare reform health care apostasy, but they should at least take a look at the projected numbers: it could -- and let me stress that again -- could have the effect of diverting funds that would go to wealthier seniors who could pay for their own health care to senior who retired with lesser wealth (or just used to pay down the debt). My suspicion is that private health insurance companies will not be as anxious to insure seniors as most law-makers anticipate, so I guess we'll have to see how that shakes out.

This is, of course, just a quick snap shot of the proposal. We'll have more to say when we look at the details.

But this development obliges us say that this is a good sign from Ryan. It shows a willingness to amend policy according to both economic and political reality. There is likely no way that something as contentious as Medicare reform is going to be passed along a party-line vote.

If this is the sign of a New Paul Ryan, we welcome it with open arms.

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