Wyden-Ryan Medicare reform plan looks interesting

Knee-jerk reactions. They're a big part of what makes politics so dysfunctional in this country.

We need to resist making snap judgements about the plan to reform Medicare unveiled today by Democratic Senator Ron Wyden of Oregon and Republican Representative Paul Ryan of Wisconsin.

Yes, that Paul Ryan.

To progressives, he's evil incarnate. To conservatives, he's the second coming of Ronald Reagan. In truth, he's just Paul Ryan. A person. With ideas to improve Medicare. Which is who Ron Wyden also is. A person. With ideas to improve Medicare.

Basically, by offering seniors a choice: stay in the current government-run Medicare system, or join a private insurance plan with the same defined benefits as the public plan. Read all about it on New York Times, Politico, Washington Post, Oregonian.

This is far different from what Ryan initially proposed, which would have largely privatized Medicare, a.k.a. "ending Medicare as we know it" in liberal-speak, or "saving Medicare for future generations" in conservative-speak.

There's no doubt that big changes have to be made in Medicare. I say this as someone who will be eligible for Medicare in less than two years. I'm looking forward to ditching Blue Cross. Everyone I know who is on Medicare likes it.

My family doctor, though, says she loses money on every Medicare visit, and I believe her. This is one sign, among many, that Medicare needs some major fixing.

In his book, "Comeback America," David Walker, former head of the Government Accountability Office, says that Medicare had a financing gap of about $38 trillion as of January 1, 2009 -- five times greater than Social Security's shortfall. Probably the gap is even greater today.

But I'll admit that when I saw Paul Ryan's name in the first news story I read about the Wyden-Ryan Medicare reform plan, my intuitive reaction was "This must be a bad idea." Then I read some details about it and thought, "Hmmmm. There's some things to like here."

(I was a health planner and policy analyst for about fifteen years, so I know quite a bit about our health care system.)

For sure, though, Democrats and Republicans are going to retreat to their usual corners and come out swinging at each other when debate on the Wyden-Ryan plan begins. Per usual, rationality, facts, and respectful discourse will take a back seat to political posturing. 

We can only hope that things will be different in 2013, when the Wyden-Ryan plan may become proposed legislation.

The pair said they would not draft legislation. With Congress at an impasse over more immediate deadline matters, such as the extension of a temporary payroll tax cut, Ryan said he does not expect action on major issues such as Medicare until a new Congress is seated in 2013.

“There’s no point in drafting legislation if you know it’s not going to pass,” Ryan said. 

I don't have a problem with offering a defined Medicare benefits package through both the current federal program and private insurance plans. This would be an interesting experiment. Conservatives believe that almost always the private sector can provide services better than government can.

OK. Let's see if this is true with Medicare.

If private insurers can offer seniors the same health services for a lower cost, great. I bet they can't, given their much higher administrative costs. But offering Medicare enrollees a choice between a government and private plan doesn't scare my progressive psyche.

However, what's good for Medicare should be equally good for the Affordable Care Act ("Obamacare"). As a condition for going ahead with the Wyden-Ryan plan, Democrats should demand that a public option be added to the Affordable Care Act, as progressives wanted when the legislation was being debated.

Lastly, here's a thought experiment for readers with different political persuasions.

If you're a progressive, imagine that this Medicare reform plan had been unveiled by Senator Ron Wyden and Debbie Wasserman Schultz (a left-leaning Representative). If you're a conservative, imagine that it had been unveiled by Representative Paul Ryan and Jim DeMint (a right-leaning Senator).

Would your opinion of the plan be different, if both of the sponsors had shared your personal political views? Probably. That's human nature. We have a hard-wired tendency to identify with our own "tribe." But this bias can be overcome. 

It needs to be, if the United States is to overcome the extreme divisiveness that hinders our country from moving forward on resolving pressing problems. Kudos to Wyden and Ryan for giving it a try.

Comments

[Brian Hines]

Next day update: predictably, the White House is "concerned" about the Wyden-Ryan plan.
http://www.huffingtonpost.com/2011/12/15/wyden-ryan-medicare_n_1151274.html

Yet Matt Miller persuasively argues in a Washington Post piece that Ryan has just endorsed "Obamacare" and has put himself in a political bind.
http://www.washingtonpost.com/opinions/what-wyden-ryan-hath-wrought/2011/12/15/gIQApwewvO_story.html

Excerpt from Miller:
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But there’s more. With this new plan, Ryan has signed onto the idea of subsidizing people to buy coverage from well-regulated health exchanges that must take all comers and charge them similar premiums regardless of health status (provisions that did not exist in Ryan’s previous premium-support plan).

If that framework sounds familiar, it should — it basically describes the dreaded Obamacare! And here’s the kicker: Wyden-Ryan has a public option to boot, because fee-for-service Medicare would remain an option for seniors.

If you’re with me, Ryan is now on record for the Affordable Care Act model, more generously funded than was his previous plan, with a public option. But just for seniors. Oh, and for workers at small firms representing a third of America’s total employment. Paul Ryan is so close to universal coverage he can almost taste it!

[Brian Hines]

Here's another opinion on the broad outlines of the Wyden-Ryan plan from Aaron Carroll, a highly knowledgeable health care policy expert who blogs at The Incidental Economist.
http://theincidentaleconomist.com/wordpress/ryan-widen-and-the-health-care-reform-debate/

It's a short post, so I'll copy it in its entirety:
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I have already answered my 10th email of the morning asking me what I think of the Ryan-Wyden plan for Medicare. The short answer is: it hasn’t been fully released yet, and I can’t comment on something until I’ve had the chance to evaluate it fully.

But here are my gut thoughts based on what I’ve seen so far. I agree that – as described at the moment – this seems like it’s making Medicare more like the ACA in the future, but with a big difference. It sets actuarial minimums, it demands guaranteed issue and community ratings, it sets the subsidies by competitive bidding, and it allows for plan switching. But it’s different than the ACA in that it contains a fee-for-service public option.

I expect that those who are dyed-in-the-wool single payer supporters will oppose this, as it can be seen as the first step towards dismantling traditional Medicare. I expect that those who are dyed-in-the-wool free marketeers will oppose this because it doesn’t do enough to dismantle traditional Medicare. But everyone else is going to be in a bit of a pickle.

I’ve often been snarky towards those who think that a single payer system is American as apple pie if you’re 65, but communism if you’re 64 (I’m looking at you, Congress). But if this proposal picks up steam, it will flip things for many people. It will be hard to argue that the ACA is a viable, progressive solution for universal coverage if you’re 64, but free-market-heartlessness if you’re 65. And many who wholeheartedly supported the ACA will find themselves in that position moving forward. After all, this program even has a public option.

Moreover, with Ryan’s support, many who want to repeal the ACA may soon be in a similar spot. How do you support this plan as a sensible solution for universal healthcare if you’re 65, but believe that it’s tyranny and the end-of-freedom if you’re 64? After all, the ACA doesn’t even have that public option.

Now, if no other Democrats besides Sen. Wyden and no other Republicans besides Rep. Ryan support this, then they’ve just gone out on a limb, and nothing will change. But Ryan is not the most liberal of Republicans, and Wyden is not the most conservative of Democrats. I think it’s likely that others will sign on. When that happens, the whole dynamic of the discussion could change. That is, if the media is paying attention, and can learn to ask good questions.

[Gail Galen]

One concern I rarely see addressed, either in our current patchwork of health care plans, or the ACA, or the Wyden/Ryan Medicare reform plan, is the lack of geographic mobility caused by health care plans that are largely local, and have built in geographic constraints.

As a person taking early retirement, I assumed I would be free to travel around the country, even relocate if I felt the urge. As a fellow Oregonian, I love Oregon, but I like to imagine having other living experiences. Oops. Can't do it unless I want to go without health insurance. At the age of 59 it is impossible to be approved for a new individual policy, and my current policy only covers Oregon.

The ACA will not solve this problem, especially now that the decision has been made to give the states more latitude in determining coverage standards. More patchwork quilt.

So I waited patiently, thinking the age of 65 might bring the possibility of new living adventures. Not if Wyden/Ryan takes hold.

I have been bewildered why this problem is so rarely discussed. It is anathema to the American character of geographic mobility.

[Brian Hines]

Gail, the Wyden-Ryan plan would only apply to people 55 or younger, I'm pretty sure. So you'll be on traditional Medicare no matter what happens. And I thought beginning in 2014 the Affordable Care Act disallows denying insurance based on pre-existing conditions, because at that time everybody is supposed to have insurance.