Congressman Ryan’s Plan to Kill Medicare

Published by clickbroker.blogspot.com.

While the press is focused on the Democrats disarray and infighting over comprehensive healthcare reform, some subtle but enlightening nuances are emerging. In "Congressman Paul Ryan’s Republican Healthcare Alternative", I wrote about Ryan’s first attempt at healthcare reform. Now the Wisconsin Congressman is back with an opinion piece in the Wall Street Journal “A GOP Road Map for America's Future” telling us salvation is replacing traditional Medicare entirely with private insurance.

On the other side of the isle, Nebraska Senator Ben Nelson asked the Senate Parliamentarian for clarification on the rules for budget reconciliation. Nelson’s public inquiry took place on the Senate floor immediately after Bernanke’s final confirmation vote Thursday. Could it be that the private health insurers and pharmaceutical companies have told Nelson they’re concerned that losing health reform entirely would impair their long-term business prospects?

While House Speaker Nancy Pelosi is playing a high stakes game of chicken with the Senate and Senator Majority Leader Harry Reid is acting like a deer in the headlights; the President and the labor unions are offering no cover to the House Democrats to pass the Senate healthcare bill as is. As the President transitions to a jobs agenda, private insurers continue to lose membership and pharmaceutical companies mourn that consumers cannot buy drugs if they don’t visit the doctor. We literally have a dying scenario for both consumers and business.

Keeping in mind that the healthcare industry needs more rather less support from government, Ryan’s proposal is surprising. Who is his audience and what is the purpose of his remarks?

Ryan: “For those under 55—as they become Medicare-eligible—it creates a Medicare payment, initially averaging $11,000, to be used to purchase a Medicare certified plan. The payment is adjusted to reflect medical inflation, and pegged to income, with low-income individuals receiving greater support. The plan also provides risk adjustment, so those with greater medical needs receive a higher payment.”

Ryan is saying that if you are under 55 now, when you reach 65 the government will give you some money but you are pretty much on your own to find coverage. This is even more of a minefield than the current Medicare Advantage. Given that Medicare Advantage costs the government at least 15% more than traditional Medicare, cost control cannot be an objective. Democrats wake up; don’t look a gift horse in the eye.

Ryan is also holding on to the belief that all states will be kind enough to set up high-risk pools so that anyone who wants insurance could buy it. This is fantasy. Reality has not proved the Congressman correct.

I believe the industry is in the process of doing some soul searching. After substantially declawing both the Senate and House bills, they are now worried the “populist revolt” they discretely helped fund might destroy their golden goose.

Progressives and unions should also realize that mandating 80% and 85% (group and individual) medical payout ratios are strong premium cost controls. The excise tax on high-cost plans is also rational. The only reason to object now is they want to keep healthcare reform as a pet issue forever. Think of the person that reaps a sense of satisfaction by being part of the cancer club. Their disease becomes their pet. I say to the progressives and unions get over it; you’re cured.

Back to Ryan, he has no real audience for his rhetoric. He is simply trying to fit the Republican’s square doctrine in a round hole. Even the tea party seniors would have trouble swallowing the wholesale destruction of Medicare.

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