Monday, May 23, 2011

The real choice on Medicare

When critics talk about Paul Ryan's plan they make the mistake or deliberate obfuscation to pretend that the choice is between his plan and some ideal future where we can all continue spending on Medicare at the same rate that we have been. But that future is nonexistent. As the WSJ makes clear, Medicare is going broke and there are two proposals on the table to address its problems.
The Medicare status quo of even two years ago, much less 20, is irretrievably gone, and anyone pining for its return is merely making President Obama's vision of government-run health care inevitable.

This reality is underscored in the just-released annual report of the Medicare trustees. Democrats sold ObamaCare as a way to slow the growth of costs, but the report shows that the program's finances have deteriorated even since last year. Medicare is carrying $24.6 trillion in unfunded liabilities through 2085, and chief actuary Richard Foster says even that does "not represent a reasonable expectation for actual program operations."

As a matter of simple arithmetic, this problem can't be solved with tax increases, because health costs and thus government spending on health care are rising so much faster than the economy as a whole is growing. The U.S. capacity to pay for Medicare on present trend diminishes every year.
The solution enacted with Obamacare is the unelected board, IPAB, that will set prices for doctors and hospitals. Its decisions will be non-reviewable by courts and would require a super-majority in Congress to overrule them. We've never had a delegation of powers like that before. This is what we will face in just a few years if Obamacare isn't repealed. And when they start setting prices below doctors' costs, do you think doctors will continue to take Medicare patients? Just as they now refuse to take Medicaid patients, the same will be true for Medicare. Fewer people will go into the medical profession. Soon we'll be facing the same problems of supply that Massachusetts is now facing. This is why Ryan's plan is so crucial because it offers a different model, a free-market model to address health care.
Republicans have staunchly opposed this agenda, but until Mr. Ryan's budget they hadn't answered the White House with a competing idea. Mr. Ryan's proposal is the most important free-market reform in years because it expands the policy options for rethinking the entitlement state.

"Premium support" is not a new idea, but it has long been dormant, and Republicans will need to continue their effort to reintroduce it to voters. Seniors would receive a fixed-dollar subsidy from the government to choose from private insurance options, with higher payments for the poor and sick. Consumers would make cost-conscious choices at the margin, and insurers and providers would compete on health-care value and quality.
Republicans need to articulate this choice over and over until the American people realize that the Democrats are proposing a false choice when they act as if the choice is between Ryan's plan and Medicare as we know it. Medicare as we know it is over. And Obama's plan for the future of Medicare is so much more dangerous for the future of health care than the Ryan plan.
The political forces unleashed by ObamaCare will grow unimpeded if Republicans now retreat from offering an alternative. Once the White House's efforts to limit costs by fiat fail—as they inevitably will—liberals will turn to even harsher controls. This future is already emerging in post-Mitt Romney Massachusetts, and also in Vermont, which wants to move to single government payer.

....The reality is that Medicare "as we know it" will change because it must. The issue is how it will change, and, leaving aside this or that detail, the only alternatives are Mr. Ryan's proposal to introduce market competition or Mr. Obama's plan for ever-tightening government controls on prices and care. Republicans who think they can dodge this choice are only guaranteeing that Mr. Obama will prevail.