Here's $10,000. Now Go Away.

Katherine Mangu-Ward | May 21, 2008

I've long nurtured a Capitol Hill crush on Rep. Paul Ryan (R-Wisc.). I profiled him in 2003, when he won my heart by talking about his love of bow-hunting (see snapshot at right) and his tradition of handing out copies of Atlas Shrugged as Christmas presents for his staff. Plus, he referred to Friedrich Hayek's "The Fatal Conceit" as "a good ol' classic."

At the time, he boasted that he was going to use his time in Congress to "turn entitlements into programs that can actually encourage individualism and self-reliance and financial freedom." Political puppy love aside, I know a tall tale when I hear one, so I didn't think much of that particular pledge.

But lo and behold, in today's Wall Street Journal Ryan proposes a couple of genuinely fresh ideas on entitlements that might (maybe, just maybe) have political legs. He's on the Budget and Ways and Means committees, so that helps the odds a little. For instance, check out this thought on Medicare:

The bill secures the existing Medicare program for those over 55 – so Americans can receive the benefits they planned for throughout most of their working lives. Those 55 and younger will, when they retire, receive an annual payment of up to $9,500 to purchase health coverage – either from a list of Medicare-certified plans, or any plan in the individual market, in any state.

The payment is adjusted for inflation and based on income, with low-income individuals receiving greater support and a funded medical savings account.

Will dangling almost $10,000 in front of grabby Americans win their hearts and minds? Is this scheme just crazy enough to work?

Via Arnold Kling

Comments

Fluffy|5.21.08 @ 9:36AM|#

I have always wondered why the GOP did not choose to fight out the entitlements battle on the basis of means-testing.

The Democrats are committed to keeping SSI and Medicare universal, on the theory that it will be easier to cut them if they become "welfare".

Why the GOP doesn't choose to fight it out on those grounds is a mystery to me. Why not force the Democrats to admit that they favor paying SSI and Medicare to millionaires for purely political reasons? Because that's what the Democrat argument boils down to: they want to pay SSI and Medicare to millionaires in order to accomplish the political goal of making the program harder to cut.

We should suspend SSI and Medicare payments to anyone with an income of $100,000 or more a year, and we should count traditionally nontaxable income sources towards that figure, and we should count IRA withdrawals toward that figure. If you have a six figure income I don't want to see you with your hand out.

And the fact that people "paid into" the system is irrelevant to me. I pay homeowner's insurance and auto insurance premiums, too, and those premiums aren't stolen from me if I never have to make a claim. So let's call SSI and Medicare "retirement insurance" and not "pay claims" on it to those citizens whose retirement is already secure. I have no problem with that.

And yes, this will make the programs easier to cut in the future. The Democrats are right about that. So it's a win-win to try to institute reasonable means testing - you save money now, and you make it easier to fight the political battle to save money in the future.

Elemenope|5.21.08 @ 9:44AM|#

Too subtle, Fluffy. Too many words. Big words.

And numbers, too. They're scary!

|5.21.08 @ 9:47AM|#

On their face, the proposals sound okay to me. But I suppose its a sad comment on things when a libertarian writer gets a tad giddy over proposals that give people a wad of cash for something. Yes, yes, its probably better than many of the alternatives, but still.

Disclaimer: I'm not a libertarian, though I am sympathetic

|5.21.08 @ 9:48AM|#

$9500 per year won't get you a health care plan if you're already sick.

dhex|5.21.08 @ 9:49AM|#

how are they going to make sure the money actually goes to healthcare? some kind of voucher/direct transfer system?

as an aside, if someone gave me atlas shrugged for xmas i'd probably think they were telling a stale joke or trying to start a fight. either way i'm not sure what the proper response is. do you laugh? do you cry? do you try to do both at once?

Episiarch|5.21.08 @ 9:53AM|#

do you laugh? do you cry? do you try to do both at once?

You could socially demonize some independent productive achievers. Or just deck the giver. That should cover all the bases.

|5.21.08 @ 9:53AM|#

I've long nurtured a Capitol Hill crush on Rep. Paul Ryan (R-Wisc.).

I've met the guy - a smart, genuine, nice guy. Plus his wife is a babe.

This is the kind

$9500 per year won't get you a health care plan if you're already sick.

I suspect that the requirements for qualified plans will prohibit medical underwriting.

|5.21.08 @ 10:07AM|#

I'd love to see something like this replacing the current system, but I don't see his plan coming up for a vote in Congress any time soon. I'll be very pleased if I'm proven wrong on that, though.

Fluffy|5.21.08 @ 10:08AM|#

I suspect that the requirements for qualified plans will prohibit medical underwriting.

Alternatively, we could simply allow anyone who can document declinations from all available plans back into the system.

As I understand it, the original rationale for Medicare was that old people couldn't get reasonably priced insurance.

But perhaps some economist or actuary among our readers can educate me on this: if healthy old people from 55-72 with high incomes were dropped back on the private insurance system, and we only allowed you to come back if you could document that you could not obtain insurance, would that cost us money or save us money? Is it more economical to cover the very worst and uninsurable patients out of general revenues, and lose the premium payments of the healthy elderly? I don't know the math here.

|5.21.08 @ 10:12AM|#

That is the best economic plan to come out of Washington in a long time, similar to one I have been working on. His tax reform part of it seems to be a very good step. While my plan I believe is a little bit better I would back this plan if it made it's way to the legislature.

While not being full blown libertarians, we need to look at people such as Rep. Ryan, Rep. Jeff Flake, or Gov Mark Sanford as potential candidates in the future. They may have a lot more credibility with the American public and the media then Ron Paul did.

|5.21.08 @ 10:53AM|#

$9500 per year won't get you a health care plan if you're already sick.

Well, if you are concerned about people having healthcare, and your support of socialized medicine isn't the knee jerk "the government MUST control EVERYTHING!!!" kind, there are options such as:

1. Make universal access a pre-condition on an insurance plan receiving government money.

2. Create a small Medicare program for people who companies refuse to insure.

However, socialized medicine isn't about providing good health care to people who can't afford it. Socialized medicine is about giving political elites a monopoly on life and death. Socialized medicine allows the political elites to absolutely deny health care to political undesirables, ethnic minorities, people who make lifestyle choices you don't approve of. A centralized monopoly on healthcare is a source of power - So few supporters of socialized medicine would want anything less than a centralized health care monopoly. So this plan has zero chance of working, don't worry.

LarryA|5.21.08 @ 10:56AM|#

as an aside, if someone gave me atlas shrugged for xmas i'd probably think they were telling a stale joke or trying to start a fight. either way i'm not sure what the proper response is. do you laugh? do you cry? do you try to do both at once?

If the person giving it to you is your boss you smile as sincerely as you can and say, "Thank you, sir."

$9500 per year won't get you a health care plan if you're already sick.

Precedent is already set. If I'm covered by a qualified company health insurance plan and switch jobs the new company plan has to accept me. Also, the first six months I'm eligible for Medicare anyone selling Medicare supplement plans must accept me without regard to health conditions.

OTOH, you're right, as such laws won't solve the problem. If $9,500/year won't pay for the health care provided then Rep. Ryan's plan will fail because private companies won't offer the insurance plans.

It would be interesting to see where he came up with the $9,500 figure. Given the number of healthy seniors who would sign up, it may be realistic.

Fluffy|5.21.08 @ 10:58AM|#

Rex -

A government health care monopoly is also about giving the government absolute power to control the livelihoods of providers.

You see, people who can save lives [doctors and nurses] or who can make products that can save lives [pharmaceutical companies, medical device companies] have this silly idea that saving lives should be as financially rewarding as, say, being attorneys, or government lobbyists. And that outrages legislators, who are mostly former attorneys or former government lobbyists, who in their wisdom know that doctors and nurses and the rest of them are properly slaves. If you can monopolize health care, you can declare by fiat what all of these people are allowed to charge, and if they don't like it they can go sweep streets.

Fluffy|5.21.08 @ 11:00AM|#

LarryA,

I think it doesn't really matter if the $9500 figure initially makes sense or not.

If it's indexed to inflation, and not to health care inflation, eventually the resulting number will be a win for the taxpayers.

joe|5.21.08 @ 11:06AM|#

Lunatic conspiracy theories aren't going to sway many people, you two.

Slaves! Ethnic cleansing! Now the UN will have to give Dr. Evil ONE MILLION DOLLARS!

Fluffy|5.21.08 @ 11:29AM|#

Joe,

As far as I am concerned, if the state can regulate what you can earn at a given activity [outside of the various activities connected to the police power] and can ban you from engaging in that activity outside of its system, you are a slave.

Haggling over what aspects of slavery justify the use of the word "slave" won't change my evaluation one jot.

If you have a system where it's illegal to be a doctor outside of the state system, doctors are the state's slaves. They aren't living the lives of slaves in the antebellum South, true. But that is not the only version of slavery that it is possible to contemplate. And they can stop being slaves by quitting medicine and becoming auto mechanics, true - but until they do that they are slaves.

|5.21.08 @ 11:34AM|#

Well, Fluffy, say a prayer tonight thanking God that you've never had to know enough about slavery to realize how wrong you are.

|5.21.08 @ 11:37AM|#

fluffy:As far as I am concerned, if the state can regulate what you can earn at a given activity [outside of the various activities connected to the police power] and can ban you from engaging in that activity outside of its system, you are a slave.

Dang, my Ridiculous Equivalencies Meter just up and blew into a zillion pieces. Anyone know where I can get another one, kinda cheap?

dhex|5.21.08 @ 11:49AM|#

slavery is an issue of social position (specifically, a lack of any social position, not so much a cause and effect thing.

the term you're looking for would be "serf" or, even more accurate, "subject."

You could socially demonize some independent productive achievers. Or just deck the giver. That should cover all the bases.

i have a better idea - i'll give them something that's short, subtle, punchy and well-written.

that's the cruelest cut of all!

Episiarch|5.21.08 @ 11:58AM|#

i have a better idea - i'll give them something that's short, subtle, punchy and well-written.

So no James Joyce then.

dhex|5.21.08 @ 12:30PM|#

dude, dubliners. dubliners is short and punchy and awesome.

eveline

of course a real revenge would be anything by hammett. that's short and punchy and rat-a-tat-tat, sister.

guy in the back row|5.21.08 @ 12:36PM|#

Medicare is now fully risk adjusted, and CMS rescales their model each year to make the average for the population equal to 1.0. Someone who is completely healthy and under a certain age is probable a 0.8, someone who just had a amputation is probably about a 10.0 or 12.0. There are factors for age, gender, diagnosis, prior disability status, and prior Medicaid status. Scores are generated using a community model and an institutionalized model.

These numbers recognize different people have different medical needs. The prior system was set up based on the person's zip code, on the understanding that there are regional cost differentials. This system still keeps some regional cost differential, but is now much more in tune with a person's actual use of health care.

A score of 1.0 is about $800 per month in premium. I guess that's where Rep. Ryan got his $9500 amount.

|5.21.08 @ 12:45PM|#

Lunatic conspiracy theories aren't going to sway many people, you two.

I guess I must have been imagining things when I thought I was being photographed, having my biometric data recorded, and a bunch of my information recorded in a federal government database, very similar to the controversial "Real ID" system in the U.S., so that I could get my health card.

And I guess I must have imagined the people in England who are being denied health care because they smoke, or are obese, or are suspected of using drugs, or are too old.

Or the Roma in the EU who are openly segregated in public hospitals and denied public health care given to other ethnic groups.

joe, here is a hint: It isn't a conspiracy theory when those things are openly happening right now in places with "universal" health care. There are plenty of places with government health care monopolies, I live in one of them. I don't need to speculate about what things might be like!

You can argue "We Americans are better, and special, and different, so those things won't happen here!", fine. But that is very different than what you are doing, claiming that the very real and well documented problems with nationalized health care are "conspiracy theory".

|5.21.08 @ 12:45PM|#

Ryan's program is just the sort of change and bipartisanship that President Obama will embrace as a compromise between intransigent left and right positions. Sure he will.

Elemenope|5.21.08 @ 12:52PM|#

However, socialized medicine isn't about providing good health care to people who can't afford it. Socialized medicine is about giving political elites a monopoly on life and death.

Oh, COME ON! Yes, I know there is a string subset of conservatives who think that all liberals everywhere are little baby Stalins, but this is fucking absurd.

You have to be "I'd drown my own baby in the bathtub to spare him this cruel word" level cynical to believe this about the people who want to socialize health care.

Fluffy|5.21.08 @ 12:53PM|#

the term you're looking for would be "serf" or, even more accurate, "subject."

I actually think the medieval serf was a variety of slave. The historical development of the institution and even the etymology of the various terms used to describe serfs would tend to support this.

Well, Fluffy, say a prayer tonight thanking God that you've never had to know enough about slavery to realize how wrong you are.

Do you know how wide the range of human experiences encompassed by the term "slave" is, joe?

Or, like most Americans, is anything that isn't an Epcot Center recreation of black chattel slavery in the plantation era simply not "slavery" to you?

Dang, my Ridiculous Equivalencies Meter just up and blew into a zillion pieces. Anyone know where I can get another one, kinda cheap?

Gee, maybe wherever you bought the first shitty one?

Elemenope|5.21.08 @ 1:23PM|#

I'm sorry, Fluffy, but even I did a double take on that equivalence.

In point of fact, serfdom did come with (a very few) legal rights, esp. in Common Law England, whereas Slavery came with a grand total of *none*. Those rights were not insignificant, certainly not so much as you make them out to be here.

Not all Bondage = Slavery. In fact, tastefully done, it can be kind of sexy.

D.A. Ridgely|5.21.08 @ 1:24PM|#

We're talking about the federal government here, folks. So at first people who get their $9,500 won't get Medicare. But that won't work well so they''ll start becoming Medicare eligible "on a case by case basis." But soon everyone will be eligible again and then someone will notice that some folks are still collecting $9,500 a year plus getting Medicare while others aren't. That's unfair so everyone else must get their $9,500 plus make up payments.

So let's just cut to the chase. I'll take my Medicare and my $9.500 right now, thank you. Could you just put them both in the pony's saddlebag?

Fluffy|5.21.08 @ 1:28PM|#

In point of fact, serfdom did come with (a very few) legal rights, esp. in Common Law England, whereas Slavery came with a grand total of *none*.

But if having certain rights either before the law or by custom means you aren't actually a slave, then there was no slavery in the Roman Empire, either. [Not the Republic, to you sticklers out there. Just the Empire.]

And it would be silly to claim that.

It would also mean there were no slaves in Ancient Israel.

And it would be silly to claim that.

|5.21.08 @ 1:29PM|#

DAR, haven't you noticed. For efficiency's sake Washington cut out the middleman.

You'll never get a pony but politicians will still give you lots of horseshit.

dhex|5.21.08 @ 1:39PM|#

But if having certain rights either before the law or by custom means you aren't actually a slave, then there was no slavery in the Roman Empire, either.

those rights belonged to the owners, however.

orlando patterson calls the unifying condition of slavery across many different cultures "social death" which i think is a neat way to put it. (his book "slavery and social death" is highly recommended)

Episiarch|5.21.08 @ 1:42PM|#

So if the state only partially owns you, you're not a slave? Whew, glad we cleared that up. I think I'll take a break and go mail in my taxes and then not smoke a joint.

dhex|5.21.08 @ 1:54PM|#

as a counterpoint, i'm sure most of us would roll our eyes at use of the term "wage slave" in the typical leftist parlance, no?

same idea.

|5.21.08 @ 2:14PM|#

Do you know how wide the range of human experiences encompassed by the term "slave" is, joe?

Yes, Fluffy, I do. Why, I know enough to state that it has never, ever been used to describe people who hold a job near the top of the income scale; nor those who can come and go as they please; nor those who can leave their job and find another; nor those who have full civil and legal rights.

Jeebus, can the hystrical language!

|5.21.08 @ 2:15PM|#

The American state doesn't own anyone.

Gad, everybody wants to be a victim these days.

|5.21.08 @ 2:29PM|#

Wasn't the original slave point about doctors who can only work for the government?

|5.21.08 @ 2:37PM|#

Does this mean what I hope it means?

Those 55 and younger will, when they retire, receive an annual payment of up to $9,500 to purchase health coverage - either from a list of Medicare-certified plans, or any plan in the individual market, in any state.

"In any state?"

That would be huge. I've never understood why the US is a free trade zone for almost everything BUT insurance. I think this condition has a lot to do with why our system is currently so screwed up.

|5.21.08 @ 2:39PM|#

Doctors can only work with the permission of the government. Actually, they can only get paid with permission of the government.

Anyone can give advice for free, I suppose...

Episiarch|5.21.08 @ 2:42PM|#

The American state doesn't own anyone.

joe, I suggest you move to another country and then when the IRS says "give us our fucking money even though you earned it in a foreign country", you can tell them the above. Then if you step foot back in the US they can arrest you and you can realize you were very, very wrong.

|5.21.08 @ 2:42PM|#

Wasn't the original slave point about doctors who can only work for the government?

It's still not slavery as we typically think of it. It may suck dead seagulls through a straw, but it isn't slavery.

dhex|5.21.08 @ 2:46PM|#

The American state doesn't own anyone.

ok now we're back through the other end of silly.

people in various penitentiary situations might disagree, especially if they've been leased out to private companies for the modern equivalent of license plate making.

Elemenope|5.21.08 @ 2:57PM|#

joe, I suggest you move to another country and then when the IRS says "give us our fucking money even though you earned it in a foreign country"... [blah, blah, blah]

Having known a couple of expatriates who don't give the IRS one red dime and have never suffered even the threat of consequences for their brazen disrespect, I'd say this bugaboo is predicated upon the mistaken notion that the IRS doesn't have both thumbs constantly up its own ass.

If they were gov't slaves, one might imagine the gov't would keep better track of them...you know, like as if they were property.

LarryA|5.21.08 @ 3:17PM|#

I think it doesn't really matter if the $9500 figure initially makes sense or not.

With the caveat that the private insurance companies Rep Ryan is depending on need a profit. If the figure is so low that they're going to lose money on the average senior, they can't write the policies to replace Medicare.

We're talking about the federal government here, folks. So at first people who get their $9,500 won't get Medicare. But that won't work well so they''ll start becoming Medicare eligible "on a case by case basis." But soon everyone will be eligible again and then someone will notice that some folks are still collecting $9,500 a year plus getting Medicare while others aren't. That's unfair so everyone else must get their $9,500 plus make up payments.

We're talking about the federal government here, folks. So at first people who get their $9,500 won't get Medicare. The private companies, competing for business, will cut back on the paperwork involved, attracting more physicians to participate. They will also add benefits and more choice in the plans they offer. People on Medicare will complain that they don't have as much choice as the Ryan Plan folks. Then Congress will step in and protect the consumer from these changes by regulating what the plans offer (as they now do Medicare Supplements and the rest of the insurance industry) to keep the plan "fair."

Fluffy|5.21.08 @ 5:10PM|#

Yes, Fluffy, I do. Why, I know enough to state that it has never, ever been used to describe people who hold a job near the top of the income scale;

Yes, it has. Slave "professionals" and slave artisans were quite common in Ancient Rome, and many of them practiced their trade for pay in addition to practicing it for their owners, often earning enough to buy their manumission. Most of the people at the highest end of the income scale did not have "jobs" in the modern sense [or did not derive their income from their "jobs"] but within the section of the economy of antiquity that was analogous to our modern wage employment, many slaves stood quite high.

nor those who can come and go as they please;

Limits on the movements of slaves are put in place to insure that the slaves cannot escape. When your owner is the state, such limitations are not necessary. Unless you leave the country, your movements aren't really relevant.

nor those who can leave their job and find another;

Hey, that's fair. Since the condition in question would not apply if the subject abandoned the restricted profession, this is true. It's a new wrinkle on an old concept.

nor those who have full civil and legal rights.

But my point is that medical professionals under such a system do not enjoy full civil and legal rights.

Remember, I specified that I was talking about systems where it's illegal to practice medicine outside of the state-run system. Not all "universal" health care systems are like that.

those rights belonged to the owners, however.

orlando patterson calls the unifying condition of slavery across many different cultures "social death" which i think is a neat way to put it.

But that's just not true.

To again use Rome as an example, if a master failed to feed his slaves or provide them with medical care, they could sue him and demand manumission. After the time of the Antonines a master who killed his slave could be tried for murder. Slaves clearly possessed some legal rights, and urban slaves generally enjoyed additional rights not enshrined in law as a matter of custom. They just enjoyed fewer rights than freedmen or citizens.

Sort of the way medical professionals under exclusive single-payer systems enjoy fewer rights than citizens in other professions.

|5.21.08 @ 8:41PM|#

Somehow, it seems to me that if one has to caveat their declaration that someone is a slave by making a long explanatory post about how it worked in Ancient Rome, the declaration loses about 90% of whatever power it possessed.

While I realize that the intertubes get around, using the word slavery in an American political context brings to mind one very specific type of slavery. If one truly means something else, not to actually say so at the time one invokes the comparison is either staggeringly ignorant, stupid, or dishonest.

|5.21.08 @ 9:59PM|#

The swamp gas must have gotten to him...

|5.22.08 @ 11:20AM|#

"The citizen is sovereign only when he can retain and enjoy the fruits of his labor. If the government has first claim on his property he must learn to genuflect before it. When the right of property is abrogated, all other rights of the individual are undermined, and to speak of the sovereign citizen who has no absolute right of property is to talk nonsense. It is like saying that the slave is free because he is allowed to do anything he wants (even vote, if you wish) except to own what he produces."

Frank Chodorov, quoted by Ron Paul in "The Revolution, A Manifesto" pp 78-79