Thursday, December 15, 2011

The Ryan-Wyden Meicare Plan

Here it is. Comments below.

The document above is fairly short of numbers, projections and other important data, so I'll have to reserve final judgment on the plan until an independent analyses start coming out.

So far, there's a broad consensus developing that Wyden's participation with Ryan in this new Medicare plan is a gift to the GOP. That might be true, but I think that it misses an important point: Ryan didn't need Wyden to amend his own plan. He could have done it all by himself and Dems would have been forced to adjust their attacks according to the new scheme.

Avik Roy describes the "competitive bidding" aspect of the plan:
The basic idea behind competitive bidding is that, say, on a county-by-county basis, you let private plans and traditional Medicare offer plans with the same actuarial value compete, to see who can offer the same package of benefits the most efficiently. Each plan in a given county will name a price for which they are willing to offer these services, and seniors are free to pick whichever plan they want. However, the government will only subsidize an amount equal to the bid proposed by the second-cheapest plan. If you want a more expensive plan, you have to pay the difference yourself.
Fair enough, but I'm not convinced competitive bidding alone will be enough to keep costs down (Roy notes that the cost containment measures are basically meaningless and I tend to agree). 

Johnathan Cohn discusses the key conservative ingredient of the plan, "premium support:"
The Ryan-Wyden plan is the latest twist on an idea called that wonks call “premium support.” Today, most seniors enroll in the traditional government insurance program. Those who want other options are free to shop around for alternatives through what’s known as the “Medicare Advantage” program, in which private insurers make available regulated insurance policies. Under a premium support system, all seniors would shop around. The government would simply issue every person over 65 a voucher (at least in the figurative sense). In most schemes, seniors would pay extra for joining plans that cost more than the vouchers and receive rebates for joining plans that cost less than the vouchers. 
Cohn later goes on to point to a report that argues premium care will lead to a tiered system of care. I'm not sure that's such a bad thing, so long as the lowest tier is of a high quality.

This is where we need more information. What percentage of senior does the plan expect to take advantage of premium support over the traditional Medicare model? What kind of projected savings are we looking at from this group? Can they create a model that doesn't increase overhead costs (not likely, but we'll see)?  Joe Klein notices, just as we did last night, that the plan lacks any medical cost control measures, which will makes these questions among the more important.

All in all, I think Kevin Drum has a pretty good take on the scheme:
Bottom line: this isn't necessarily a bad plan. Unfortunately, it's also not clear if it's really a very effective plan either. But I'd certainly put it into the broad bucket of plans that are reasonable starting points for conversation. Given Paul Ryan's immense credibility with the tea party wing of the Republican Party, it's significant that he's put his name to this. It's worth a conversation.

And that's ultimately the most intriguing aspect of the plan: it's very obviously a starting point and not a destination. This is probably as good a place as there is to start having a Medicare reform conversation.

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