Today, Republican House Budget Chairman Paul Ryan will present his new "bi-partisan compromise" plan to a meeting of an outfit known as the "Bipartisan Policy Center."
Ryan's latest proposal would allow individuals to choose between traditional Medicare or vouchers that provide "premium support" for private insurance plans.
Here's what you need to know about the Ryan's latest attempt to repackage his hugely unpopular proposal to eliminate Medicare and replace it with vouchers for private insurance:
1) The only thing "bipartisan" about his latest proposal is that Ryan has apparently convinced Oregon Democratic Senator Ron Wyden to support it. The content of this plan is based on pure right wing privatization dogma. In fact it has much the same structure as the Bush plan to privatize Social Security.
2) Ryan admits that his latest proposal would not save any money compared with the current system. So why do it?
The real goal of Ryan's plan is the same goal of his original plan: to allow Wall Street and huge private insurance companies to get their hands on the Medicare Trust Fund. Both plans are about nothing more than allowing insurance companies to make more money.
Since the plan would not save the government money compared with the current system, it really has nothing to do with demonstrating "that there is an emerging consensus developing on how to preserve Medicare," as Ryan claims.
3) Don't be fooled by the apparent "choice" the plan offers between Medicare and so called "premium support" (vouchers) for private insurance. Serious analysts like the Center on Budget and Policy have concluded that the plan would allow private insurers to skim off healthy seniors and leave sicker, older seniors in the traditional Medicare plan. The effect would be to raise the costs of the traditional program and increase economic pressure to eliminate traditional Medicare -- that provides guaranteed benefits -- and replace it with vouchers for everyone.
In other words the plan is nothing but a two-step to get to Ryan's primary goal: eliminating Medicare, and eliminate guaranteed benefits. It's an attempt to achieve the goal that Newt Gingrich famously proposed two decades ago: "to make Medicare wither on the vine."
4). The reason that none of Ryan's plans would cut overall health care costs is simple. Private insurance plans have higher costs than Medicare. Private plans have much higher administrative and sales costs than Medicare. Twenty-five to thirty percent of every private health insurance dollar often goes to administration, marketing and profit whereas the cost of administering Medicare is only about 3%.
Some years ago the private health insurance companies convinced Congress to allow seniors the choice of "Medicare Advantage" plans run by private insurers. They were supposed to save lots of money through "competition." Instead they ended up getting subsidies of about 20% above the cost of providing Medicare directly. Those are exactly the subsidies that were cut by health care reform. Ryan's plans are basically about how the private insurers can get that money back -- and a lot more.
The Kaiser Family Foundation did a study of the effect on overall health care costs of raising the eligibility age for Medicare from 65 to 67 years old. Such a proposal would, in effect, move millions of seniors off Medicare and keep them in private insurance.
The study found that such a proposal would raise overall health care spending in the economy by about $5.7 billion per year, since private insurance companies (if sixty-five-year-olds could get insurance at all) simply cost more than Medicare. That, by the way, was true even assuming the implementation of the Affordable Care Act that would guarantee some form of coverage for everyone.
5) In order to cut Medicare health care delivery costs, you have to slow down the increases in health care costs throughout the economy. That requires:
"Fee for service" medicine drives up costs because it does not benefit from any of the normal competitive forces that usually control costs. That's because consumers don't make most health care purchase decisions. Health care providers like doctors do.
In the current system if new medical device is introduced that costs more, but generates a higher margin for doctors and hospitals, you see its use go up -- regardless of its relative effectiveness -- even though it is more expensive. That's because the doctors and hospitals make the decisions about its efficacy and use -- not the ultimate consumer. There is a perverse incentive in the current system to use more expensive services that generate higher profits because the providers themselves make decisions for consumers -- and they always will. Sick patients rely on experts to recommend therapies. It is good to involve patients in those decisions, but in the end patients must depend on Medical professionals to advise them.
The normal elements of competitive markets do not characterize the health care market place -- they never have and never will.
You don't come home one day and say -- "guess what, honey... I just got a raise, now I can have cancer."
In a system where doctors and hospitals are paid fixed amounts per patient to keep people well, their incentives are to keep costs under control -- simple as that.
There has never been a Republican plan to control costs by reforming the way health care is provided.
Every Republican proposal to "control costs" is really a plan to shift costs off of Medicare or Medicaid, and onto individuals and small businesses.
In order for the latest Ryan plan to save the government money, it would have to do just that -- shift the cost to seniors. Remember, his original plan -- that was supported by all but 14 Republicans in the House -- increased out of pocket costs for seniors by $6,000 per person, per year.
Buying health care is not like buying a new car. Health care should be a right that is provided for all of us - by our society. And it is in all of our interests to prevent economic interests of big insurance and pharmaceutical companies, -- or hospitals, -- or group practices, to stand in the way of achieving that goal.
The bottom line is simple. The latest Ryan plan is nothing but a "two-step" to achieve exactly the same goal as the original Ryan plan: end the guaranteed benefit of Medicare and replace it with a system of vouchers for private insurance.
Once people understand it, it will receive about the same level of public support as the original Ryan plan -- or its ideological twin, the wildly unpopular Bush plan to allow individuals to "choose" private accounts that was aimed at ending the guaranteed benefits of Social Security.
Americans don't want to privatize Social Security -- and they don't want to privatize Medicare.
You can put lipstick on a pig, but it's still a pig.
And as for the endorsement of this plan by Senator Ron Wyden? What was he thinking?
Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com. He is a partner in Democracy Partners and a Senior Strategist for Americans United for Change. Follow him on Twitter @rbcreamer.
Follow Robert Creamer on Twitter: www.twitter.com/rbcreamer
On a more serious note I think this is a big con job to get the public to buy a pig in the poke! Ryan's so-called plan sucks almost as much as the party of NO! he represents.
I would like to hear more about the alternatives to fee for service medicine. Is that how single payer systems in other countries are organized? What do doctors think of the idea of a flat fee for patients? Could doctors be bankrupted if they got an unusual number of patients with chronic ailments? Would they want to screen out high risk patients like insurers do now?
I know a lot of doctors who favor a single payer system. It certainly makes sense to cut insurer profits in hundreds of millions out of our health care costs. Especially when you consider a large portion of their high overhead costs is for all the doctors and nurses they hire to justify not covering legitimate claims. We don't have enough doctors and nurses, why should we let insurers hire them to deny coverage, when we need all of them to take care of us? MEDICARE FOR EVERYONE! Let's cover everyone's basic medical needs, and limit insurers to supplemental coverage.
There was only one problem.
I could not find any Balkantourist entity that would accept my Balktourist vouchers. Once, in Plovdiv, I succeeded in getting a cashier to accept them for lunch, but as I left, I heard an angry altercation coming from in a back office and I couldn't help wondering if I was the cause.
My travel story illustrates the dangers of using vouchers for Medicare.
Senior citizens may discover that no doctor, insurance company, or hospital will accept Medicare vouchers. Furthermore, with the elimination of ACA, no health insurance company with an eye on the bottom line will accept a senior citizen with pre-existing conditions. In addition, the value of vouchers can be cut anytime that Congress decided to do so - so many senior citizens will find themselves without any medical care at all - vouchered to death.
The Tea Party got its start because Obama was going to pull the plug on grandma. Now the GOP will pull the plug.
Afterall, we don't have a trust fund in which we save-up to pay for future wars. These are Pay-Go propositions.
Also, tell me how a sovereign government with a sovereign currency can go broke? Sure it can run the risk of printing to much money and allowing the banking system to leverage too much credit but these can be constrained by taxation, interest rate policy, and regulation.
Governments with a currency monopoly cannot go broke, nor can they default unless they so choose. Ergo, none of it's programs can be underfunded unless self imposed constraints are triggered
Is it not also logical then to question why sovereign governments enforce permanent taxation when they can generate "revenue" simply by issuing sovereign currency? Taxation and other stabilizers for aggregate demand should be viewed as temporary measures, because a permanment regime of federal income taxation doesn't pay for anything in a sovereign currency environment.
The Federal Government can spend its monoploy currency into the economy to fund state and local governments avoiding bond markets and debt, and also relieving those political jurisdictions of, the burden of borrowing, and the insanity of balanced budgets in the face of massive unemployment\deprivation.
We have been so conned to believe that the Federal government needs to borrow and pay interest on its own currency.
Not only are we nowhere near hyperinflation, but we never have been near that point. Since that magical year 1971, inflation has been caused by oil prices, never by federal crediting of checking accounts (spending), and with very few exceptions, inflation has been close to the Fed’s target level.
Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up the economy.”
Mandatory reading for those who don't understand the above comments:
http://rodgermmitchell.wordpress.com/2011/04/14/why-the-federal-debt-is-not-the-total-of-federal-deficts/
I have bookmarked your comments to read over and over and when I need to quote a fact, so,
Thank you.
2) The Ryan/Wyden plan is designed to reduce that unfunded future obligation by allowing Americans to decide whether to take their Medicare benefits and stay with a "public option"Medicare or choose a private insurer alternative.
3) If Medicare is far more efficient as the author claims then everyone will choose the "public option" and he has nothing to worry about. In reality, roughly 14% of Medicare and Medicaid funding is wasted on fraud and, even after making the industry standard 2% profit, most private companies could easily offer more bang for the buck. As Newt Gingrich once noted, Medicare would "wither on the vine." THIS is what terrifies the author and other proponents of government health insurance.
Bart DePalma
http://thecitizenpamphleteer.wordpress.com/
I suspect that private insurers will try to lure folks from a "public option" Medicare under a Ryan/Wyden plan by offering more and better benefits for a slightly higher premium ala the very popular MA program.
The Democrats had a perfect thing to run on, partly, because Ryan had outed the Republican aim to turn over Medicare to Big Insurance and S/S on their Wall St. casinos.
If the Democrats don't see this as a traitor to their party, then they need their heads examined, as I think leadership needs their heads on straight and get rid of Reid and Durban.
Doesn't anyone listen to the people out here ? Evidently not, because they have spoken quite clearly, not to touch S/S or Medicare. This has been going on for a year that I have watched the polls.
BTW....they have said to tax the rich, plus get jobs going and damn deficits until more jobs have been created.
We are at the turning point in this country. Better heed what the people are saying. And Congress is at a very very low point. It's either the rich take over everything that delights Rep/tea loons, or get back to people owning this country.
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