In the Arena

Ryan’s Medicare Plan

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It’s going to take a while to sift through the entrails of Paul Ryan’s latest budget, but it seems obvious that his Medicare proposal, jointly made with Senator Ron Wyden of Oregon, is going to get most of the attention. I’m a big fan of Wyden’s when it comes to health care policy. He’s proven to be the most creative legislator on this subject in either party–and his initial universal health care plan, a single-payer system that would have removed insurance responsibility from American employers, seemed to me the best way to go. But I must say, his joint Medicare proposal with Ryan seems, at first glance, something of a scam.

It’s a good scam, though. Let me explain:

Ryan’s initial Medicare proposal was a “premium support” plan that would give ever-decreasing vouchers to senior citizens to buy Medicare from a variety of providers. The basic assumption behind this plan–that market economics would drive down the cost of Medicare–was both flawed and cruel. Previous attempts to offer market choices to the elderly–i.e. Medicare Advantage–proved to be costly failures. There is no evidence–I mean, zero evidence–that a functioning health care market can be built in a nation dominated by a few mammoth health care mega-systems. And, having lived through the horrors of making health care choices with elderly parents the past few years, I can tell you without question: asking my parents to make rational health care choices after the age of 80 would have been extremely unfair, to the point of mental cruelty.

Enter Ron Wyden: His compromise with Ryan was to allow a public option–essentially Medicare as it now stands–to compete with the private insurance plans. That’s the scam: I can’t imagine any elderly person not choosing a public fee-for-service option. Ryan does get to maintain the ideological fig leaf of a market-based system, but that’s about it. The reality is that the overwhelming majority of senior citizens would opt to keep the coverage they now have.

I have two thoughts about how to proceed from here:

1. Let’s make a deal. I’d be happy to support the Wyden-Ryan alternative if Ryan would agree to make it applicable to the entire Obamacare system: make a Medicare-style public option available to everyone. I mean if it’s good enough for the seniors, why not for the rest of us, right Paul? (Actually, I’m a senior these days, but I still get my health care from Time Warner.)

2. Solving the real “problem” of Medicare–escalating costs–probably has nothing to do with a free market system. It has everything to do with abolishing the fee-for-service system that encourages doctors to order unnecessary treatments and tests. The best way to do this would be to move to the Mayo Clinic health care association model, in which doctors are essentially paid salaries and receive incentives to provide care on the basis of the most effective treatment models. I’m going to spend some time this spring learning more about this model and I hope to have some conclusions in a few weeks. But I do think it’s time to get past the standard conservative and liberal dogmas and figure out how to rebuild a system that provides good care, without the anxieties that attend forcing complicated choices on the elderly, at a reasonable price. It may even be possible to do that.