This is how sexy the chatter gets over cocktails at health policy wonk-ins in Washington. This is how sexy the chatter gets over cocktails at health policy wonk-ins in Washington.
“No pre-ex’s, community rating, guaranteed issue.”
“No, that’s Obamacare stuff,” I said to my colleague, as she read a summary of Congressman Paul Ryan’s House Republican budget plan released on Tuesday. “Everyone in Medicare already has those. You must have the wrong memo.”
She scrolled to the top of her iPhone and pointed at the screen. “Summary of the Ryan Budget Plan – Medicare.”
“Maybe just a gimme for popular support?” I speculated, knowing from headline coverage earlier in the day that the Ryan plan sought to repeal Obamacare, not strengthen its most popular consumer protections. “Guaranteed issue but no mandate — that would sure hang the insurers out to dry. But why would you put that in a budget?”
“Here’s why,” she read. “‘Seniors buy coverage through new Medicare Exchange.'”
Consumers need protections only when they are turned into consumers. And that is what Congressman Paul Ryan’s budget seeks to do for — or do to, depending on your feelings about medical capitalism — future Medicare beneficiaries.
The latest version of the Ryan budget — really his old budget, for three years running now – came out this week. The document generated near universal dismissal by the mainstream media as an act of pointless political grandstanding – to the Right, a courageous statement of fiscal responsibility, to the Left, a defiant display of Randian cruelty.
And so the budget will go nowhere politically, except onto the bonfire raging in Washington where there used to be discourse.
But the actual details of Ryan’s controversial proposal to remake Medicare – into what he and conservative economists call a “premium support” plan, and what defenders of the Medicare status quo deride as the program’s “voucherization” – are oddly familiar in non-partisan health policy circles, and not for reasons the Congressman will appreciate.
Sure, the document excoriates the President’s health reform law, as one might expect. The Ryan budget curtails Obamacare’s funding and calls for its outright repeal – while preserving its cuts to Medicare, retaining its tax increases, and re-architecting the future of Medicare along nearly its exact same design principles. Really.
Under the Ryan plan: Medicare recipients would choose from among competing private health insurance plans on a new government-run health insurance exchange. Insurers would offer plans at emerging market prices and seniors would be covered at the level of the second cheapest. Well-off seniors who want richer plans pay more, and the government subsidizes those less-well-off. Private insurers would not be able to discriminate against seniors for their pre-existing medical conditions and would have to charge all seniors the same premiums for the same plans.
Under Obamacare, Americans will choose from among competing private health insurance plans on new government-run health insurance exchanges. Insurers will offer plans at emerging market prices. Well-off Americans who want richer plans will choose the platinum or gold plans — versus the silver or bronze versions — and the government will subsidize those less-well-off. Insurers will not be able to discriminate against anyone for their pre-existing medical condition and will have to charge all people in the same broad age groups the same premiums for the same plans.
Premium support, voucherization, to-ma-to, to-mah-to, whatever. Let’s just call it what it is: Oryancare — Obamacare for Seniors.
The Ryan plan pushes Medicare from a dysfunctional program — where everything is always sort of paid for — into a transparent, competitive marketplace, using premium vouchers and co-payments. The health reform law pushes individuals, small businesses and the uninsured from a dysfunctional non-system — where too many are priced or kicked out and no one is ever sure what will be paid for — into a transparent, competitive marketplace, using premium subsidies and co-payments.
If only because it really is an act of political grandstanding, the same budget creating an Obamacare-like apparatus for seniors also calls for the repeal of Obamacare. The document reminds us one more time that Obamacare is a “government takeover” of health care (page 40) and repeats the bogus assertion that the law is 2,700 pages long (page 54) – even though the consensus erroneous figure is that the law is 2,400 pages. (The actual law as legislated – not originally drafted – is 955 pages.)
Because Congressman Ryan apparently thinks people will take his budget seriously, he makes provisions for the possibility that President Obama might not sign a bill overturning his signature domestic achievement, a law now bearing his name if only, at first, for the purpose of ridicule. Hedging against a scenario where no such repeal is forthcoming, the Ryan budget simultaneously starves Obamacare out of existence in two ways: by defunding its expansion of Medicaid — always help the neediest first! — and by defunding those overwrought bureaucratic contraptions needed for the implementation of the Obamacare, namely, government-run health insurance exchanges.
What remains from Obamacare in the Ryan budget, down to the dollar, are its cuts to Medicare — $716 billion to be precise. Yes, these are the very same cuts trotted out by Governor Romney and Congressman Ryan in their criticism of President Obama on the campaign trail, when the audience was sufficiently senior. With the new Ryan budget in hand, spotting such er – inconsistencies – does not require time-lapse photography: the budget retains many of the taxes included in Obamacare — as reported by even the Wall Street Journal — as the document itself criticizes those very same taxes.
Finally, the Ryan budget repeals the Independent Payment Advisory Board, or IPAB, the provision included in Obamacare to — guess what — control Medicare spending growth. As discussed here in January, IPAB is a black box, not a blueprint. No one is sure exactly what it will do or how, one of the more legitimate reasons it has become the biggest punching bag in Obamacare. All we know about IPAB is its goal: gather evidence for what Medicare should and should not be paying for, and use this to eliminate payment for medical treatment that is not only wasteful and unnecessary, but potentially dangerous.
The Ryan plan repeals IPAB and instead lets the market decide what medical treatments Medicare should and should not pay for. Because that works so well today. Medicare reform indeed.
But forget sore thumbs like IPAB. At their cores, the functional similarities between Oryancare and Obamacare are not all that different — once you power-wash the political rhetoric off both and recognize that both are voucher-like programs, with the same consumer protections and with the well-off subsidizing the not-so-well-off.
How is that possible? Because the two plans are actually adjacent to each other along the broad spectrum of health reform models developed and debated since the 1980s, which I discusesd here a few weeks ago. Premium support and voucher plans, as formulated by conservative economists, fit into the second box from the right.
Back at the health policy wonk-in, the talk all turns, inevitably, away from policy and back to politics.
“Charm offensive? Grand bargain? The President should call Ryan’s bluff on Medicare!”
Indeed, the President should call Ryan’s bluff on Medicare.
As they work on their “grand bargain,” President Obama should encourage Congressman Ryan and his fellow House Republicans to lay out and pitch their plan for reforming Medicare to those whom it will affect, even if the “reform” part of the plan cleverly does not affect them at all, but the next generation of Medicare beneficiaries.
During the summer recess, while talking up their fervor to “cut entitlement spending” at any political cost, they should explain at town hall meetings across the country how the plan will actually work. Especially the $716 billion in cuts that were so potentially dangerous a year ago, when they were included in Obamacare.
In between screams from those in attendance who love Medicare, hate government, and resent moochers, they should describe how Oryancare will let future seniors shop on a new government-run exchange for coverage from competing health plans, without worrying about medical or economic discrimination.
A few months later, those implementing Obamacare will also be rolling out new government-run health insurance exchanges – which will allow small businesses and individuals to shop for coverage from competing health plans, without worrying about medical or economic discrimination.
No doubt they will appreciate having the ground ready.
J.D. Kleinke is a pioneering health care information entrepreneur, medical economist, author, policy expert, and business strategist.