The Dangers of Paul Ryan’s Plan

It’s not an exaggeration to say that the Republican Party’s prospects for victory in the 2012 election hang, if not upon a gossamer thread, then certainly by a frayed rope that could be severed easily if it continues to play around with sharp-edged reform plans that are destined to alienate the electorate.

My greatest concern along these lines is the Medicare reform package proposed by Paul Ryan, the chairman of the House Budget Committee.

While the Medicare reforms Ryan recommends are praiseworthy in some respects (it is nice to have someone in Washington brave enough to actually try to achieve real and lasting reform), I wish they had come with a protective shield to defend against the Democrats’ inevitable and highly effective “let’s scare seniors” attack.

Paul Ryan

In my March 15 column (written about three weeks before the Ryan plan was introduced), I warned that Republicans should not voluntarily cede the valuable political high ground they had secured last November, that they should focus their attention on protecting Medicare, to continue to be the champions of this beleaguered program against the ravages of Obamacare assaults, which are far more harmful to Medicare than anything Paul Ryan has proposed.

Obamacare cuts some $500 billion from the program while putting a powerful board, almost unaccountable to anyone, to make further cuts. This so called “Independent Payment Advisory Board” begins operating in 2015.

Now, with the results of Tuesday’s special election in upstate New York for an open seat in the House of Representatives, my worst fears have been confirmed. In that contest within the heavily Republican 26th Congressional District, the Democrat, Kathy Hochul, defeated the Republican, Jane Corwin, in a stunning upset.

Under normal circumstances, Corwin would have won the open seat easily, but Hochul ran a strong campaign by attacking Ryan’s Medicare package and successfully used it to tarnish her opponent.

Strange as it may sound, Hochul’s victory could be the best thing that could have happened to the Republicans, if they learn from it. Theodore Roosevelt once observed that effective reformers must navigate along a treacherous political ridge crest, avoiding the jagged chasm of idealistic indulgence on one side and the fluffy emptiness of demagogic pandering on the other.

My hope is that Hochul’s victory will alert Republicans to their obvious danger and get them back to solid ground.

They can do that by taking a common-sense approach that protects and improves the current Medicare without changing its basic structure.

Unfortunately, not only does the Ryan Medicare reform package fail to provide the safeguards that, to my mind, are essential if we are to fulfill our nation’s commitment to seniors, but also it actually proposes that the current Medicare program be replaced with a new “premium support” voucher system for all those currently under age 55.

Today, Americans in the Medicare program are able to get basic coverage, which they can supplement with Medicare Advantage or private health insurance if they choose. But under the Ryan plan, this system will end in 2021 and all Americans who turn 65 that year and after will be given vouchers to purchase health insurance on their own.

If this plan is enacted into law, Medicare eventually will become fully privatized after the current program, which will remain in place for all those age 55 and over, is phased out.

An obvious question immediately arises when considering Ryan’s plan: Will the dollar amount of the vouchers enable the seniors of tomorrow to buy a level of health care that today’s Medicare beneficiaries enjoy? The answer to that is no.

According to the Congressional Budget Office’s analysis of the Ryan plan, “Beneficiaries would . . . face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare. Moreover, the value of the voucher would grow significantly more slowly than CBO expects that Medicare spending per enrollee would grow under current law.”

Simply put, the Ryan plan will cut Medicare spending dramatically by reducing the level of care that the program provides to current beneficiaries. It effectively shifts more of the financial burden onto the shoulders of the private sector and forces individual seniors to pay more out of pocket for their healthcare than they do today.

The inconsistency of the Republicans in ferociously attacking Obamacare during the 2010 congressional election because it cut nearly $500 billion from Medicare’s budget and then proposing under the Ryan plan spending cuts that are even more onerous boggles the mind.

The major difference between the plans is that Obamacare keeps the current system with major cuts coming in this decade, while the Ryan plan’s cuts will not be felt until after 2021.

The first step to addressing Medicare’s significant problems is, first and foremost, to win and maintain the confidence of the American people.  Once the Republicans have earned this stamp of approval — their 2010 election victory was only the first step — they should remember that 2010 exit polls show it was largely senior voters who turned out in record numbers and voted overwhelmingly for the GOP.

Congressional Republicans should take a common-sense approach to reform.

In 2000, the federal government spent $252 billion on Medicare. By 2010, spending had skyrocketed to $457 billion, an increase of more than 80 percent, during a period when inflation was actually quite low.

So why the spiraling costs? New patients entering the system?

Actually, patient rolls increased marginally.

In my view, rampant fraud, abuse, and waste have been the hallmarks of the Medicare system. It is poorly administered. If Congress and the states worked diligently in reducing these excesses, the program would work effectively.

While protecting the current system, the Republicans could promote health savings accounts as a viable alternative to the current system for younger workers. These accounts should be voluntary, and all Americans still should be able to access the Medicare program if they choose to participate in it.

Of course, we need major tort reform as well for our entire healthcare system. Obamacare made no effort whatsoever to reduce the number and amount of medical malpractice suits, which do so much damage in promoting overuse of the current system by generating unnecessary tests and procedures, thereby artificially increasing costs.

Whether it be the radical Obamacare program or Ryan’s reform plan, the people say they don’t want to be force-fed a new system. Ignoring the people’s will is generally not a good thing in a democracy.