According to Ezra Klein of the Washington Post: "Ryan's proposals are quite dramatic. If the early reports are correct, his budget would turn Medicare over to private insurers and reduce the federal commitment to merely helping seniors purchase insurance, not making certain that they actually have it. He'll also propose huge cuts in Medicaid, though he'll give the states the authority to decide how those cuts will fall. You have to give Ryan and the GOP credit for sticking to their guns: these proposals are the most ambitious effort to remake Medicare and Medicaid in a generation, and perhaps ever."
Again from Klein: "As you all know by now, the long-term budget deficit is largely driven by health-care costs. To move us to surpluses, Ryan's budget proposes reforms that are nothing short of violent. Medicare is privatized. Seniors get a voucher to buy private insurance, and the voucher's growth is far slower than the expected growth of health-care costs. Medicaid is also privatized. The employer tax exclusion is fully eliminated, replaced by a tax credit that grows more slowly than medical costs....An important note to understanding how Ryan's budget saves money: It's not through privatization, though everything does get privatized. It's through firm, federal cost controls. The privatization itself actually costs money.... "
" The proposal would shift risk from the federal government to seniors themselves. The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they'd need to either cut back on how comprehensive their insurance is or how much health-care they purchase. Exacerbating the situation -- and this is important -- Medicare currently pays providers less and works more efficiently than private insurers, so seniors trying to purchase a plan equivalent to Medicare would pay more for it on the private market."
"It's hard, given the constraints of our current debate, to call something "rationing" without being accused of slurring it. But this is rationing, and that's not a slur. This is the government capping its payments and moderating their growth in such a way that many seniors will not get the care they need. This is, in its simplest form, a way to limit the use of a finite resource: Money."
"You can argue whether this cost control is better or worse than other forms of cost control. But it's a blunt object of a proposal, swung with incredible force at a vulnerable target. Consider the fury that Republicans turned on Democrats for the insignificant cuts to Medicare that were contained in the health-care reform bill, or the way Bill Clinton gutted Newt Gingrich for proposing far smaller cuts to the program's spending. This proposal would take Medicare from costing an expected 14.3 percent of GDP in 2080 to less than 4 percent. That's trillions of dollars that's not going to health care for seniors. The audacity is breathtaking.
But it is also impressive. I wouldn't balance the budget in anything like the way Ryan proposes. His solution works by making care less affordable for seniors. I'd prefer to aggressively reform the system itself so the care becomes cheaper, even if that causes significant pain to providers. I also wouldn't waste money by moving to a private system when the public system is cheaper. But his proposal is among the few I've seen that's willing to propose solutions in proportion to the problem. Whether or not you like his answer, you have to give him credit for stepping up to the chalkboard." OK, it's me again. Let's summarize: Medicare as we now know it would cease to exist. When you reach the age at which you would qualify, you would receive a voucher which you could use to purchase medical insurance on the private market. Since the value of the voucher would grow in value from year to year at a rate lower than medical costs, you would need to purchase a policy that will probably cover less than what Medicare now covers, making up the difference from your own pocket.
Oh, one other thing. Remember that a frontline goal of the Republicans is to repeal "Obamacare." If this happens, you might well arrive at Medicare age with a pre-existing condition (high blood pressure, diabetes, etc.) which might make it difficult, if not impossible, to find a private insurer who will sell you coverage.
Sounds like it should be dead-on-arrival, right? I would fight to keep the current Medicare system, and I'd bet you would, too. That's why the proposal only applies to people who are currently under the age of 55. They're hoping that we'll say, "Well, nothing changes for me, tough for my kids."
"OK," many of you would say, "but if we don't do something about the deficit, things are going to be very tough for our kids." Agreed, and I'll have more to say about that in the next few days.
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