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What’s a ‘Mediscare’?

By Ezra Klein,

It is, of course, amusing to see Republicans asking for a truce on Medicare after they won the last election demagoguing Medicare cuts that they then included in their budget. But I’m more interested in what, exactly, that truce would entail. In particular, I’d really like to hear more from the House Republicans on what separates an accurate description of Paul Ryan’s Medicare program from a “Mediscare.” Their letter asking President Obama to crack down on “these disingenuous attacks” includes no examples of the disingenuous attacks in question, so we’re left to guess about them. Is “privatization” the loaded word? Saying the GOP budget “ends Medicare as we know it?” Calling it a “voucher program?”

But what if all those things a) scare seniors but b) are true? Ryan’s plan moves beneficiaries from a government-run insurance program into private insurance. Devolving a government-run service to private companies is the textbook definition of “privatization.” Ryan transforms the program from a defined-benefit in which Medicare pays your health-care costs into a defined-contribution in which Medicare will, in most cases, pay a fraction of your health-insurance premiums. That, when added to the privatization, clearly ends Medicare as we currently know it. Ryan prefers the term “premium-support” to the term “voucherization,” but the inventor of the premium-support concept says that Ryan’s plan is missing the crucial ingredient that distinguishes his idea from vouchers.

The counter-arguments go something like this: To the privatization point, Ryan notes that the government still has to certify the private plans being offered in the Medicare program. But that’s true in any instance of privatization. Ryan says Medicare cannot survive in its current form because its costs are unsustainable, and so Medicare, as currently understood, will end one way or the other. But Ryan’s privatization plan raises the program’s costs. What saves money is capping its spending. And you could cap its spending without changing the fundamental nature of the program as public and defined-benefit. So Ryan is making an affirmative and unnecessary choice to transform the program — and that’s true whether you support his plan or oppose it And finally, what separates premium-support from a voucher plan is that payments under premium-support grow at the rate of health-care costs to prevent cost-shifting. Does Ryan’s plan grow at the rate of health-care costs? No. So it’s not premium support.

I recognize that these parts of Ryan’s plan don’t necessarily poll well. But pointing out that they do, in fact, form the basis of both Ryan’s structural changes and his savings is an important first step in discussing the plan! That said, it’s possible that the letter is referring to other Mediscare allegations that I’m unaware of. I contacted the office of Rep. Adam Kinzinger, the lead signer of the letter, for an interview, but they declined my request.

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