End Medicare As We Know It? Ryan's Plan Would Expand On a Medicare Idea That Seniors Know and Like.

The TV-ready soundbite that Democrats like to use when attacking Paul Ryan’s Medicare overhaul plan, which would turn Medicare into a premium support program, is that it “ends Medicare as we know it” — or, when they’re feeling the apocalypse coming on especially hard, “ends Medicare.”

This tends to play well with seniors wary of any change to the program. But it ignores the sizable portions of Medicare that already work in basically the same way. Another way to describe Ryan’s proposed overhaul, then, would be to say that it expands on the idea behind two parts of Medicare that seniors know and like: Medicare Advantage and Medicare Part D, both of which offer seniors a menu of private plans to choose from.

And, as The New York Times made clear in an article over the weekend, these sections are working well enough that the administration has seen fit to brag about their successes. To some extent this is just political: Administrations want to be able to say that their programs work. but there are real successes here, especially relative to the traditional Medicare alternative. For example, The Times notes, the administration has pointed to a 10 percent increase in enrollment in Medicare Advantage, as well as a 7 percent decrease in average plan price. So average plan costs are decreasing, and more seniors are choosing to enroll in Medicare’s system of private plans. And as I noted last week, there’s new evidence to suggest that private insurers operating in the program provide equal benefits to traditional Medicare at lower cost.

Meanwhile in Medicare Part D, the prescription drug benefit passed under the Bush administration, plan prices have come in under expectations and a held steady even as health costs have gone up elsewhere. Overall the program costs almost a third less than originally predicted. Part of that disparity is probably due to the slowing of the drug development pipeline. But Joseph Antos of the American Enterprise Institute has made a strong case that the program’s reliance on competition between private insurers has also helped keep costs in check.

There’s another thing about these programs: Seniors seem to like them and want to use them. Currently about 50 million seniors are enrolled in one or both. Surveys consistently show that the vast majority of seniors of like their Part D plans; satisfaction levels hover close to 90 percent. As I already noted, enrollment in Medicare Advantage is increasing.

Just because beneficiaries like and use a program isn’t enough to justify it, of course. And there are real problems with Medicare Part D — one of the biggest being that when it was passed, Republicans in Congress didn’t even bother with the pretense of trying to pay for it. Nor is converting Medicare into a premium support system the ideal way to overhaul the government’s most expensive health entitlement, especially now that both Ryan and Romney are pushing plans that would leave a government-run, fee-for-service Medicare option in place. 

But given Medicare’s unsustainable long-term spending path, I’d say that restructuring the program in a way that attempts to end the program’s unlimited commitment is probably better than either of the other most talked about options: delaying reform (which means doing nothing), or betting that yet another technocratic overhaul of the program's reimbursement structure will restrain spending growth despite decades of evidence that these sorts of centrally planned price and payment systems never work as planned.

I would prefer a more comprehensive overhaul of the health system that focuses on restoring price signals to medical practice while diverting the bulk of public health resources to covering the poor and sick rather than the middle class. But until then, why not take a cue from the growing evidence that reforms harnessing competition between private plans can work — restraining spending growth and offering choices while keeping the people who use it (or soon will) happy, not ending Medicare as seniors know it but building on parts of it that they already like. 

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  • John||

    Here is the bottom line, we are stuck paying for old people's health care. The old people want it for obvious reasons. And younger people want it because they have gotten used to their parents not being a burden in old age. That is the aspect of this that rarely gets mentioned and almost never mentioned by the "god damn greedy geezers!" types. Social Security and Medicare didn't just help old people. It helped middle aged people too by relieving them of the burden of taking care of their parents. That is why these programs will never go away, nearly every voter over 40 is either collecting the benefits or would have to start taking care of their parents if they were not there. You can tilt at the "I want a free market health system" windmill all you like. But it is unlikely to happen.

  • Auric Demonocles||

    I don't quite get this logic (though I am nowhere near 40). They're already taking care of their parents through their FICA contributions. In addition, if you really think it's that big of a burden, you don't have to take care of them. How many people actually need these programs to pay for their retirement (particularly if they are aware in advance that they won't be getting them)?

  • John||

    They're already taking care of their parents through their FICA contributions

    Sure they are. And they like that trade.

    ow many people actually need these programs to pay for their retirement (particularly if they are aware in advance that they won't be getting them)?

    That is a good point. But that means that maybe you can get middle aged people to agree to change things for them. But you are never going to get the public to agree to change things for current retirees. If you try that, current retirees say no and their kids say no because they don't want the burden of taking care of their parents who rely on these programs.

    And I think a lot of current retirees rely on medicare and social security and would be moving in with their kids without them.

  • Brendan||

    What about parents who have no problems taking care of themselves? Since they don't need me to take care of them, can I have that money for myself?

  • John||

    No way are they giving it up.

  • sarcasmic||

    That is why these programs will never go away

    Yes they will. By their very nature all Ponzi schemes must fail.

    In the process they'll manage to take down the federal government and render the dollar to be completely worthless, but they'll go away.

  • R C Dean||

    This is the critical point. Its not a choice between having Medicare forevermore v not having Medicare.

    Medicare as we know it is doomed. The only question is whether it goes away as part of fiscal/monetary/economic collapse which is inevitable if nothing much is done, or whether it goes away because we do something about it before it all collapses.

  • John||

    True. In a sane world a liberal would have proposed the Ryan plan. They claim to love medicare so much. How the hell do they plan to keep it?

  • KDN||

    By increasing the income tax on the "wealthy" by 9%! That solves everything!

  • John||

    Yeah that will solve it.

  • sarcasmic||

    Any meaningful cuts in these programs are political suicide.

  • Adam330||

    If this were the case, then it would be politically possible, and supported by the under 55 set, to means test the programs. No younger person would have to worry about their parents becoming a burden- if they haven't saved enough/ run out of money, then they will become eligible for the programs so that they don't have to beg their kids. If they have enough money, then they, by definition, are not burdens on their kids.

  • Alice Bowie||

    I agree with you 100% John.

    I've always said this to my conservative friends and they always stay shut:

    "Would you stop saving for Junior's college fund if you had to pay for Grandma and GrandPa? Or, would you just let grandma/grandpa die? Would you have that house/car/bank account if you had to pay for that triple by-pass?"

    The truth is, if we had free-market healthcare, the triple bypass would not cost $150k. If the health providers had to receive what people were capable of paying, I believe most of the medications, medical machinery, procedures, etc. that we have today would not exist. It's the trumped up prices made possible by third-party payer that created the high profit incentive for these things to exist.
    You can call this the 'broken window theory' but it is true.

    Since the regular Joe gets MRIs, chemo-therapy, $150k surgeries, etc. that Joe doesn't pay for thanks to the third-party payer model, the medical providers make a big profit.

  • Mr. FIFY||

    So, basically, we're doomed to hand out freebies at taxpayer expense. Forever.

    Until the system collapses under its own weight.

  • sarcasmic||

    Yep. That about sums it up.

  • Tim||

    No, Obama proposes to hand out drugs and cancel things like hip replacements.

  • Tim||

    Which is great unless you're Granma. You aren't granma, are you?

  • Mr. FIFY||

    Cyanide capsules would cure all hip ailments, that's for true.

  • The Late P Brooks||

    I would prefer a more comprehensive overhaul of the health system that focuses on restoring price signals to medical practice while diverting the bulk of public health resources to covering the poor and sick rather than the middle class.

    Libertarians hate the middle class.

    And doctors.

  • The Late P Brooks||

    It helped middle aged people too by relieving them of the burden of taking care of their parents.

    Don't forget "and conserving their inheritances".

  • John||

    That too.

  • Mr. FIFY||

    Give Team Blue 100% power, and "inheritances" would cease to exist.

  • John||

    OH no they wouldn't. Inheritance tax is for commoners. The really rich would continue to dodge the entire system via trusts.

    You think the trust fund left is really going to go all bourgeois and give up their trust funds? Fat chance.

  • Mr. FIFY||

    Not if the extreme-left got control, John. Imagine an army of Bernie Sanders lookalikes, stamping on our faces forever.

  • sticks||

    You don't need to be really rich to take advantage of trusts. Just a little rich.

  • Mr. FIFY||

    Soon, being "a little rich" will be illegal, as well.

    If Team Blue gets their talons on all of the levers of power, that is.

  • John||

    There are still rich people in Venezuela. And that is what they want no Communist Russia.

  • sarcasmic||

    Soon, being "a little rich" will be illegal, as well.

    If Team Blue gets their talons on all of the levers of power, that is.

    That's not totally true. Being rich through honest means like business or labor will not be tolerated. However being rich through government power will be acceptable if not even looked up to.
    After all, the Top Men can't be concerned with the drudgery of daily life and wield all that power at the same time.
    They must be rich to do their work.

  • Alice Bowie||

    Why do you people feel that us liberals feel that being rich is bad?

    I'm willing to bet that there are more liberal millionaires than liberals.

    Being rich through honest means of having businesses that create products that people want is something that most people (including liberals) like. The vulture-capitals aspect of VC and other so-called legal businesses that strip workers of their pensions (which was earned by the workers) to give to lawyers and the owners are pretty crappy. I think a Drug Dealer, a prostitute, and even a Mob hitman are more noble professions than time-share crooks and the Vulture VC Types.

  • Alice Bowie||

    I meant to say more liberal millionaires than conservative millionaires.

  • sarcasmic||

    Vulture capitalism is a necessary part of the market.

    I'm sure that when cars replaced the horse and buggy, some venture capitalist pig rushed in to take over the wagon wheel makers and put their capital goods to other profitable uses.

    If we had the same government then as we do now, there would likely have been calls for bailouts to save the poor wagon wheel makers and their pensions from the unfair tide of creative destruction.

  • Mr. FIFY||

    Because your Team has been pounding the "millionaires and billionaires" bullshit drum for, shit, decades now?

  • Randian||

    he vulture-capitals aspect of VC and other so-called legal businesses that strip workers of their pensions (which was earned by the workers) to give to lawyers and the owners are pretty crappy.

    No they are not. If those firms were more efficient, they would not have been a profitable acquisition.

    The entire market is premised on creative destruction. Some people lose out temporarily. That's tough.

  • scareduck||

    I got into it with a decorated journalist on this topic, and his position was, that can't happen here. (Even though the left's position on raising taxes is that it isn't a tax increase if taxes were ever higher in the past.) Somebody has to pay for these entitlements, and that's you, you rich sucka.

  • Whiterun Guard||

    decorated journalist

    Fifteen pieces of flair?

  • Kreel Sarloo||

    Alice Bowie| 8.27.12 @ 2:26PM |#

    I meant to say more liberal millionaires than conservative millionaires.



    Well sure there are. Liberals (both Republicrat and Demopublican alike, from TR to GWb) have dominated government and have been using to make their cronies wealthy since the beginning of the last century (the election of Teddy Roosevelt, who along with his cousin in "the opposing party" set the tone for pretending to give a shit about the "working man: while setting up a system of subsidies and government contracting guaranteed to make the connected rich).

    I ask you Hit'n'Runners, stupidest most vapid commenter ever, or what?

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