Patterico's Pontifications

12/15/2011

What’s behind the Ryan-Wyden Medicare plan?

Filed under: 2012 Election — Karl @ 10:00 am



[Posted by Karl]

Sen. Ron Wyden (D-OR) has joined House Budget Chairman Paul Ryan (R-WI) on a bipartisan plan to revamp Medicare.  The crux of the matter is that Ryan ostensibly gets a premium support plan of the sort he has long championed, while Wyden ostensibly gets traditional Medicare enshrined as one of the options for seniors’ helath insurance. 

Ed Morrissey likes the introduction of more competition into the Medicare system and the supposed political benefit of potentially blunting Democrats’ Mediscare tactics in the upcoming election.  Ben Domenech asks eight questions of Ryan that need to be addressed (although I think Ben’s concern about the lack of means-testing overlooks that the plan contemplates wealthy seniors getting less) and fears the Ryan-Wyden proposal will be viewed as a “walkback” that will actually hurt Republicans who stuck out their necks on the Medicare reforms Ryan included in the House budget.

On a political level, the fact that the GOP frontrunners are already closer to Ryan-Wyden than the House budget suggests to me that the proposal will not affect the overall political environment much.  On a policy level, given that this is a mere proposal, rather than legislation, most of the devil will be in the details.  Aside from Domenech’s primary point that it may be too late on a solvency basis, the two questions that concern me most are: (1) the potential for Medicare to engage in unfair competition in the premium support system (as the so-called “public option” would have under Obamacare); and (2) relying on Congress and the Independent Payment Advisory Board to restrain costs. 

The latter is actually somewhat less of a concern to me than you might think.  Kicking the cost can down the road is already the status quo.  The introduction of IPAB under Obamacare pushes the system in the direction of rationing by cutting payments to hospitals and doctors, which will force many doctors out of the health care system, decreasing access and likely quality of care.  Getting a premium support system in place at least advances market competition as the alternative for cost containment, which is more attractive as policy and politics.

However, that assumes fair competition, which is why the role Medicare would play in the new system is key.  To be effective, a premium support system including Medicare would have to reform Medicare to make it equivalent to a private plan, without taxpayer subsidy… and that’s where I think Dems would start an enormous pushback, even though Pres. Obama essentially conceded the argument during the debate over Obamacare.  Nevertheless, Ryan may be calculating that Republicans would rather have a debate over reforming Medicare to eliminate unfair competition than its outright elimination.

–Karl

54 Responses to “What’s behind the Ryan-Wyden Medicare plan?”

  1. Certainly Republicans are tired of hearing people like Madcow referring to the “Paul Ryan Kill Medicare Bill”.

    Icy (5f90f2)

  2. Having spent the last 5 years making medical decisions for my 90-ish mother, and witnessing the Medicare system in all its glory, I can only say PLEASE give us some options.

    The strength of Medicare is that it provides enormous quantities of care at little cost to the patient. The weakness is that the care is highly chaotic, often at cross-purposes, with many hands and no communication among them, and record-keeping is a farce.

    One case: Mom goes to the hospital at death’s door. Receiving doctor (correctly) says: she should not be taking drug A and drug B, redoes her meds and stabilizes her. Then she gets admitted and a new doctor takes over. He sees her stable and says: Should she be on Drugs A and B win her (underlying) condition? No, we scream (Mom is not a player anymore). Okay, then.

    After a while they pack her off to a rehab (the episode has taken a lot out of her), where a new doctor takes over. He sees her stable and says: Should she be on Drugs A and B win her (underlying) condition? No, we scream.

    Time passes and she goes back to her assisted living, feeling a bit better. And the next time I see her med list, she’s back on Drug A and drug B, put there by a forth doctor that made decisions without contacting her decision-maker.

    Why does this happen? Because the government way underpays for all this care, and no doctor is going to spend a second of time reading notes when they can only make $30 no matter how much time they spend. So you get tons and tons of superficial medicine.

    Me, I want to be able to pay for insurance that actually pays for what I get. So that I get it.

    Kevin M (563f77)

  3. must learn to read and not just spellcheck…

    win = with in two places

    fourth*

    Kevin M (563f77)

  4. Karl, posting is done in PST, you know: Z minus 10 (at this time of year, at least)!

    AD-RtR/OS! (e08334)

  5. Certainly Rachel Madcow is butthurt that a bill wasn’t named after her which criminalizes the Catholic Church.

    Right Icy?

    Dohbiden (ef98f0)

  6. Ryan abandoning his plan already = shocka

    The best was to privatise medicare is to eliminate it through granting the health care industry (including insurance companies) 100% tax free income for servicing patients over 64 years of age(for the Millhouse impaired that would be 65)

    unleash the hounds of competition

    EricPWJohnson (719277)

  7. AD,

    That’s what I thought, too. Didn’t happen this time.

    Karl (f07e38)

  8. the best way, not the best was

    EricPWJohnson (719277)

  9. EPWJ,

    I don’t think Ryan is abandoning his plan (in fact, he’s supported several versions). I think he’s decided it’s easier to try to privatize Medicare in all but name than to formally end it.

    Karl (f07e38)

  10. IMO Medicare isn’t feasible in the long run, so my concern is what will replace it. I’d prefer a completely private system but that isn’t going to happen in today’s world. I favor taking a page out of the liberal playbook and putting in place a system that makes conservative options (e.g., private options) possible down the road. It may be the best we can hope for.

    DRJ (a83b8b)

  11. EricPW is a lying duschemonger.

    SHOCKA.

    Dohbiden (ef98f0)

  12. douschemonger*

    Dohbiden (ef98f0)

  13. “privatise”?

    You’ve been hanging out with The Emperor again.

    Icy (5f90f2)

  14. B-but privatization leads to right wing corruption on Boris Yeltsin style levels

    /Leftys

    Dohbiden (ef98f0)

  15. Eric, Paul Ryan has been pragmatic from the start. He’s so consistent this way. He will frame reform however he needs to, and accept whatever limitations are outside his control, and continue pushing for whatever he thinks is the best he can get.

    Always, this is far less than I want and probably less than he wants.

    Dustin (cb3719)

  16. You know Karl, that your readers here are so bright and ahead of things that they can comment upon what you’ve posted before you actually put it up?

    AD-RtR/OS! (e08334)

  17. One major step in reforming Medicare and keeping access is to allow balance billing by doctors. The French have a national fee schedule, which helps with cost control, but allow doctors to charge more than the fee schedule. The patient has the right to decide if he/she wants to pay more. The French system is basically fee-for-service, which keeps the patient in control. When I was actively involved in some of this, we found that assisted living patients were all being signed up for HMOs which would pay for drugs but wouldn’t pay for basic care like podiatry. The assisted living home administrators were desperate for help in getting some of this basic care covered. I tried to set up a UC,Irvine plan that would be an HMO but include more services, like pharmacy analysis, and the docs were all enthusiastic but the administrator vetoed it.

    At the time, UCI a teaching hospital had almost no Medicare business except disasters like liver transplants. There is (or was at the time) quite a bit of literature on the “day hospital” concept and evidence that managing pharmacy and basic services cut way back on total cost. The VA has done a study showing this where costs go up for 6 months, then go down below average for years once the problems are straightened out. The business folks are the ones who don’t want this. The “suits” as my son says.

    Now, with Part D, the drug issue may be less (I haven’t been involved for years) and there is a lot of room for study. It would seem a university hospital and the faculty medical group would be the place to do this but the suits object. I am very suspicious of the present rapid industrialization of health care as it is putting all the doctors into bonus plans where the administrator has total control. A lot of older docs are dropping out of Medicare and going to cash practices. The young ones with student loans are screwed.

    Here is more on this trend

    Mike K (9ebddd)

  18. Karl,

    Paul wasnt serious and he knew his original plan had zero chances

    EricPWJohnson (2925ff)

  19. I should add that I had some experience with these managed care plans when I was still in practice. The local IPA (Independent Practice Association), which had a bunch of HMO contracts was run by guys I knew well. The ones who ended on the Board were the guys who had always been corner cutters. The type who rarely referred an appendicitis before it perforated, etc. The GPs had an incentive system that was very powerful. Their bonuses were dependent on how many hospital days their patients had in a year. The fewer hospital days, the bigger the bonus. Some of the bonuses were more than their annual income from practice. That is so powerful that it is dangerous.

    I was once fined $500 for sending an HMO patient to the “wrong” lab for a $16 test. I had two offices at the time so I stopped seeing HMO patients in one of those offices. I had to buy a computer system to keep track of all the various HMOs and their rules, which were all different. At the time I had about 270 contracts with various health plans.

    I’m sure it’s worse now. One GP I knew well had declined to join an HMO plan as a provider. He was very busy (and excellent) and figured he didn’t need the headaches. Then the city employees all had to join the HMO and his practice just about disappeared. He retired early. He could do it as he was older but the city employees lost the best GP in town (San Clemente). My son, who was a paramedic working for the city, discovered he was diabetic about that time. His diabetes education consisted of a video tape. I sent him to an excellent endocrinologist privately to get the information (mostly from a dietitian who worked for him).

    Mike K (9ebddd)

  20. Karl,

    Does this mean that Paul Ryan has now conceded that his former approach amounted to right wing social engineering? So it appears. It is nice to know that there is at least one candidate in the Republican presidential field who was ahead of the curve on this one. Should we expect the Romney camp to withdraw the “With Friends Like Newt” add and issue an apology? Can we expect conservative pundits who jumped on this bandwagon to do likewise? It would be appreciated.

    Yours truly,

    ThOR

    ThOR (94646f)

  21. Where do you get off claiming everyone, except those that you support, are not serious candidates, or are not serious about their proposals?

    JD (fabfd8)

  22. Joe Arpaio violated the rights of latinos?

    But of course mexicans can violate the rights of latinos and it’s ok right leftys?

    Dohbiden (ef98f0)

  23. dustin

    ryan voted for every spending increase since 1999 until 2007, including TARP

    I dont trust pre 2007 Republican legislative leaders who just now – get religion about spending in this do or die (figuratively) political spending climate

    What he did was to set the Republicans as those who would end medicare and medicaid or think that govt takeovers of healthcare are topics that need to be addressed (they dont we have the finest healthcare in the world)

    EricPWJohnson (2925ff)

  24. I dont trust pre 2007 Republican legislative leaders who just now – get religion about spending in this do or die (figuratively) political spending climate

    Trust isn’t a word I’d use to describe any politician.

    I think some have gotten religion are are useful in working to reform government, but it is going to a spending climate by nature, and everyone is going to be tempted and almost all will fall short.

    I think Ryan’s solutions are major improvements, and he’s effectively described the problems in a clear way I think very few are capable of.

    Trust? I don’t even know the man.

    Dustin (cb3719)

  25. IMO Medicare isn’t feasible in the long run…

    I believe, DRJ, that goes without saying. Or, at least, it should be obvious. “Means testing” is simply a form of rationing.

    MediCare, like Social Security, was sold to the public as a form of insurance. This is from the USG MediCare site (medicare.gov):

    Medicare Part A (Hospital Insurance)
    What is Part A (Hospital Insurance)?

    Part A is hospital insurance that helps cover inpatient care in hospitals, skilled nursing facility, hospice, and home health care

    On a personal note, I don’t see why means testing should have bipartisan support, as Ben Domenech seems to view as desirable based upon his article. Let the Democrats be the party of bait-and-switch; “we sold you a bill-of-goods based upon one concept of fairness, ‘you get what you pay for,’ but now we’re shifting to another idea of fairness, ‘from each according to their ability, to each according to their need.'”

    I honestly don’t see why the GOP needs to join in the swindle.

    But more to the point, what makes all these proposals for rationing whatever the public was led to believe they’d get from these over-promised, under-delivering government programs (excluding the wealthy who paid more throughout their working lives from receiving benefits, having bureaucrats making decisions that can’t be appealed on the quality of care one will receive based upon their opinions of your age and future quality of life, having younger workers pay into the system longer by raising the age of eligibility to receive benefits while lowering the percentage they can expect to receive back compared to current beneficiaries, etc.) is that they aren’t being received well now. And that will only get better over time, from my perspective.

    Does anyone actually believe that younger workers when they finally do get jobs are going to be satisfied seeing a higher percentage taken from their dwindling paychecks, knowing they’ll have to work until they’re in their ’80s, just to transfer money to the contemporary crop of relatively prosperous elderly? Relatively prosperous because they themselves have no real hope of retiring. Certainly not in the kind of comfort or getting the level of medical care those people are enjoying, let alone what they saw their parents and grandparents receive.

    That’s an unsustainable system, both financially and politically. I believe that’s why ObamaCare is reviled by the vast majority of voters. We’ve seen the same movie with different titles, and we don’t like how it ends. The people who supported Social Security and MediCare may have some excuse for not knowing what they were getting into, but it’s nearly 50 years on since the latter, younger fiasco was implemented. Now the bill is coming due and we’re in a financial crisis. So we know what we’re getting with ObamaCare; a larger and more bloated compulsory program that will cost hundreds of times more than predicted and will deliver far, far less than promised.

    Steve (8ddf37)

  26. Eric for once I agree with you.

    Dohbiden (ef98f0)

  27. Means testing…
    It can mean not spending scarce public revenues on services to people who can afford to provide for themselves;
    i.e., setting the bar at a level that the Gates’ and Buffett’s of the world are not eligible.
    It can also be a blatant redistributive scheme to have the “rich” support the “poor” if the bar is set at a much lower level –
    think of scholastic aid for college students where the upper-middle class, who may (because of where they live) be just scraping by,
    find that their children are denied any assistance except Student Loans.
    And, it can be both.

    AD-RtR/OS! (e08334)

  28. “Certainly Republicans are tired of hearing people like Madcow referring to the “Paul Ryan Kill Medicare Bill”.”

    Truth hurts. Now Ryan’s masters decided on a slower road to “privitization,” i.e., higher costs, with 3d party non-medical profiteers. Why not? They got what they want with Obamacare. Double-bonus for the 3d party profiteers, there are still people who think Obama was trying to get through the “public option.” Ha ha.

    Jas (694aa2)

  29. I have to add:

    “To be effective, a premium support system including Medicare would have to reform Medicare to make it equivalent to a private plan, without taxpayer subsidy”

    IOW, in plain language, you have to make Medicare more costly in order for private profit businesses with 3d party owners to be able to compete. You know, economic fascism. Corporatism. Dems, Repubs, not much difference after all.

    Jas (694aa2)

  30. Ryan’s “masters” would beeee?? “They” got what they wanted with Obamacare? Riiight.

    elissa (2f59fa)

  31. What previously banned troll is hiding behind the “Jas” curtain?

    AD-RtR/OS! (e08334)

  32. Jas is a parody of a parody of a troll.

    JD (4b216c)

  33. “Ryan’s “masters” would beeee??”

    The insurance companies who wrote, pushed, and benefit from Obamacare, alias “Super Romneycare.” Ever hear of individual mandate? That’s just the beginning.

    ““They” got what they wanted with Obamacare? Riiight.””

    You’re right. It was all a trick to subvert private health insurance companies with government law enforced individual mandates, cost “panels,” and additional funding raids on Medicare to transfer monies to private comapnies to pay for new “poor” health care insurance supports. The companies did not want these, it’s all really a trick to bring back the “public option” x years from now.

    Also Obama is an enemy of the big Wall Street Banks, not their best friend ever. You turned me. I believe now!!!

    Also, the Ryan supporters would be the same who made those pricey “commercials” of him promoting “his” plan, that is, the “plan” really written by lobbyists, which Ryan is fronting as “his” plan. Ryan is pawn, a good looking one at that. That’s worth a lot!

    Jas (694aa2)

  34. “What previously banned troll is hiding behind the “Jas” curtain?”

    None. I found this site and thought it was about California politics. I did not realize it was a Borg collective cube. Sorry! Yes, Paul Ryan is brilliant and writes his own plans, these plans are not written by insurance companies that have a legal obligation to maximize profits for their own shareholders and nobody else. Keep the faith!

    Jas (694aa2)

  35. Beyond parody

    JD (4b216c)

  36. Jas is a parody of a parody of a troll.

    Wrong… he is a parody, wrapped in an enigma, infused with conundrum, lightly coated with riddle and then broiled to a crusty insipidness.

    Colonel Haiku (2add70)

  37. Why is Ryan working with my socialist senator?

    Wayne (887693)

  38. Occassionally, Wyden has an outburst of reality, and this is probably one of them where he tries to show that he’s not a completely batt$hit Lefty.

    AD-RtR/OS! (e08334)

  39. Means testing…
    It can mean not spending scarce public revenues on services to people who can afford to provide for themselves…

    Yes, AD-RtR/OS!, it could mean that.

    But, as I noted above by linking to the language still used on the medicare.gov site, MediCare was not sold to the public in 1965 as a public resource. It was sold to the public as an individual, compulsory medical insurance policy.

    Just as earlier Social Security was not sold to the electorate as a public resource. But as an individual account into which workers and their employers would contribute to provide an old-age pension. Here’s the language as used in the original 1936 pamphlet per the ssa.gov website:

    Beginning November 24, 1936, the United States Government will set up a Social Security account for you, if you are eligible.

    I really don’t understand how there can be any confusion.

    To illustrate the difference, let’s consider two different possible government run food-purchasing programs.

    If I applied for a public benefit such as food stamps, I’d expect to be means tested. That’s an example of not spending scarce “public resources” on people who can afford to pay for something themselves.

    On the other hand, if the government insisted on forcing everyone simply based upon the fact they were privileged to be born an American to buy compulsory “food insurance” in exchange for the promise that everyone would receive an individual benefit based upon their “contribution” (as if a tax is ever a “contribution” like passing around a church collection basket), and that the more I contributed from my paycheck the larger the benefit, what would be my reaction? First of all based upon the government’s track record I wouldn’t believe them. But if I were fool enough to believe them, and I’m not saying those who supported Social Security and MediCare were fools as the government hadn’t established a track record as of yet, I would be justifiably angry to be told my individual “account” or “policy” supposedly established for my benefit needed to be appropriated by the state because it they need the money.

    And after unilaterally altering the previous promise to include some never-discussed means testing that would have killed the deal politically when it was first introduced, the powers-that-be who’ve decided to appropriate what I was told was my money have decided I don’t need it.

    Steve (8ddf37)

  40. What MediCare, and SocSec, were sold as is immaterial today.
    They are both on the verge of collapse, and we have to determine if they should be saved, and in what form can they be saved that makes economic sense.
    SocSec is pretty easy if we just followed the Chilean Model, which originated within the Chicago School of Economics;
    MediCare is another question altogether, and probably requires a complete top-to-bottom revamp of how we deal with HealthCare Insurance in and out of government.
    All-in-all, I think that Mike K has shown us a possible way with the French Model;
    but, whatever is done, sustainability seems to be only attainable by divorcing HealthCare Insurance from employment
    (where it resides only due to the Wage & Price Controls that existed during WW-2 –
    Thank You, FDR and your little band of administrative fascists masquerading as socialists).

    AD-RtR/OS! (e08334)

  41. Privatization will lead to higher costs?

    Of course that is worse than hyperinflation causing it to rise to $459,544,900 right Jas AKA Yelrverton?

    Dohbiden (ef98f0)

  42. Yelverton*

    Dohbiden (ef98f0)

  43. What MediCare, and SocSec, were sold as is immaterial today.

    Beg to differ, friend. I think it’s not immaterial at all. It’s precisely the point.

    Steve (8ddf37)

  44. What MediCare, and SocSec, were sold as is immaterial today.

    Beg to differ, friend. I think it’s not immaterial at all. It’s precisely the point.

    What SocSec was sold as in 1937 is certainly immaterial. There is nobody under retirement age today who paid a cent of SocSec tax in reliance on that assurance. The government stopped telling that lie in the ’50s, and by 1960 it was a matter of black-letter law, putting the entire nation on notice that there was no contract and no obligation. There is no legal or moral reason why Congress should not completely end SocSec today, cutting everybody off cold turkey; the only reasons not to do this are political and humanitarian.

    Thus, anyone who believed the similar statements about Medicare, which were made after they had been put on notice that the SocSec statements had been lies, was a fool.

    But more importantly, it’s immaterial how these programs were sold for a much more fundamental reason: nobody has ever paid a cent towards these programs in reliance on such statements. People paid because they had to. Had there been no assurances they’d still have paid exactly the same amount. So there’s no contract and no obligation.

    SocSec and Medicare are both forms of welfare; therefore until they can be abolished completely they should only go to those who need them. That’s simple logic. Yes, this means the rich are taxed to pay for the poor; that’s what welfare is. Indeed conservatives have been saying since at least the ’60s that the pretense of a separate SocSec tax and “trust fund” should be done away with; the tax should be folded into the income tax and the payments should come out of general revenue (which is where they end up coming from anyway).

    Milhouse (ea66e3)

  45. “…the only reasons not to do this are political and humanitarian…” and political self-preservation!
    When you take away everything from someone who has not that much to look forward to, the political – and physical – consequences can be quite serious.

    There are only 800K (approx) cops in America.
    That’s not enough if the voters become angry enough to protect our Pampered Princes upon Capitol Hill.

    Barack Obama (1f61b8)

  46. and political self-preservation!

    I thought I mentioned political.

    Milhouse (ea66e3)

  47. Milhouse, you may not realize it but you are making my point.

    It doesn’t matter if the government stopped lying in the 1950s.

    It matters that the government was lying. From the jump.

    Hence the massive hostility to ObamaCare. We know how it goes. The new tax is a certainty. The promised benefit is a fantasy.

    What I don’t understand is why anyone is arguing so ineptly as to prove I’m right in the first place.

    Steve (8ddf37)

  48. Steve, the lie is immaterial.
    What matters is that economically it is a Bridge Too Far; an impossibility that will implode upon itself.

    AD-RtR/OS! (1f61b8)

  49. Ryan is emphatically not “abandoning his [earlier] plan.” That’s a gross distortion.

    Unlike most of the Washington crowd, Ryan would actually like to save Medicare and, indeed, the rest of the federal budget.

    There are a lot of options being explored, and some of the major pieces are still moving. They were never fixed in stone earlier, but they were indeed part of the House budget because the House was trying to solve problems and they didn’t want to let the desire for a perfect plan become the enemy of a merely good plan.

    News flash: This isn’t going to become law either. It might possibly pass both chambers of Congress, but Obama will veto it within the proverbial New York minute.

    So Medicare isn’t going to get reformed unless the GOP retakes the White House, captures a working 60-vote majority on this kind of bill in the Senate (which translates into probably 58 or so actual seats + a couple of nervous Yellow Dogs to get things past a filibuster), and keeps the House.

    But Ryan is working at trying to educate the public. By getting a Democratic senator to sign on to a variation of the original plan, he’s building credibility, educating the public, and marshaling political capital. Ryan isn’t running for president, to my dismay; but to my strong approval, he’s nevertheless laying the foundations for an important, enormously consequential national change in course come January 2013.

    Beldar (65378a)

  50. But Ryan is working at trying to educate the public

    Ryan was a tax and spender a voter of Tarp nd only with the advent of the Tea Party in the rust belt with the election of senator Johnson did Ryan suddenly discover after a lifetime working for congress and being in congress – all of a sudden he is the Obi-wan of spending control and restraint.

    Ummm, sure, yeah he ran from something that was a political show pony.

    EricPWJohnson (d84fb0)

  51. Ryan was a protege of Jack Kemp, the ‘John the Baptist’ of tax cuts, really you don’t your side
    any good,

    narciso (87e966)

  52. Ryan voted for Tarp so Eric is correct.

    Dohbiden (ef98f0)

  53. The left are brazen.

    Dohbiden (ef98f0)


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