Obamacare

ObamaCare and the Ryan Plan: One and the Same?

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Two plans enter, one plan leaves.

TPM's Brian Beutler ponders the similarities

If you think of the health care system as a highway with unbridled free market private insurance on one end and universal single payer on the other end, then two parties are now approaching each other from opposite directions. Democrats pushed ObamaCare for working-aged people as a move away from unrestrained private insurance, toward a universal program. In trying to dismantle Medicare, Republicans are seeing to rollback a successful example of single payer toward freer market.

They've now awkwardly encountered each other in the middle. The similarities between the two policies creates a dilemma for Republicans who have smeared the health care law as an existential threat to the United States and for Democrats who've attacked the GOP plan as a corporate giveaway and dangerous for seniors.

Thus, most of them deny the chance encounter on the health care highway is even taking place.

Beutler is right that the plans have a lot in common in terms of basic structure. If anything, they have too much in common: As John Graham explains, the newest version of the plan put forth by Rep. Paul Ryan forces seniors to purchase insurance from highly regulated exchanges, much like ObamaCare:

Under the previous Roadmap [the previous Ryan plan], you could have taken the "payment" and used it to "to pay for one of the Medicare certified plans, or any other plan, such as those offered by former employers or available from the private market."…Not any more: Under the current proposal, we'd be forced to choose a plan from a federal "tightly regulated exchange" (p. 47). We need to put this talk of "exchanges" to bed until we finally get rid of ObamaCare.  People rightly associate an exchange with a limited choice of plans selected by a politically appointed board, offering benefits determined by bureaucrats' whims.

It's a closed, government-controlled market, which not only limits choice, but also limits potential gains from competition.

But in its broad strokes, it's still better than the status quo alternative. That's because there's a crucial and obvious difference between Ryan's premium support proposal and ObamaCare's subsidy system: Ryan's plan is a plan to reform and preserve an existing entitlement while capping per-beneficiary spending and adding a small measure of insurer competition to the market; ObamaCare creates a brand new entitlement that, if the Massachusetts plan its based on is any indication, is likely to cost far more than advertised. Medicare has $36 trillion in unfunded liabilities. According to the Congressional Budget Office, it's set to go bankrupt in 2021—even with the supposed savings in ObamaCare. As even Obama has acknolwedged, the program, along with Medicaid, represents the biggest single driver of the federal debt. Its costs are rising so fast, in other words, that it won't last without a major cost-saving fix. Perhaps, as Obama's Medicare director Donald Berwick argues, those savings can be generated by providing smarter, more efficient care designed by new and improved Medicare bureaucrats. But I wouldn't bet on it.

The primary goal for legislators designing health policy should be to bring our unsustainable public spending under control. That's what Ryan's plan is designed, however imperfectly, to do. ObamaCare, on the other, was created first and foremost to expand insurance coverage, with the hope of maybe, just maybe, controlling costs later.