Ryan gives up on his budget
By Ezra Klein,
Pick your objection to Rep. Paul Ryan’s Medicare plan. Maybe, like Michele Bachmann, you’re worried it shifts costs onto seniors. Maybe, like Newt Gingrich, you’re worried that it’s too much, too fast. Maybe, like Josh Barro, you’re worried that the caps on Medicare and Medicaid spending are totally unrealistic. Maybe, like Alice Rivlin, you’re worried that there’s no plan for changing the way health care is actually delivered. Maybe, like Henry Aaron, you’re worried that the plan calls itself “premium support” even though it lacks the key features of a premium-support plan.
Whatever your concern, Ryan didn’t mention it in his much-hyped speech yesterday. The section on Medicare was three paragraphs long — compared with 10 paragraphs on taxes — and bereft of details. The closest Ryan got to a specific was when he said: “If I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to give seniors the power to deny business to inefficient providers. Their plan is to give government the power to deny care to seniors.” That’s really it. And even that’s not correct. As Austin Frakt writes, Ryan’s Medicare plan lets seniors choose among insurers, not among providers. The result, for seniors, will be less choice of providers, because private insurers have much more limited networks than Medicare.
Ryan is hiding the ball here, of course. According to the Congressional Budget Office, the choice of private insurers will mean insurance costs more, as Medicare can bargain for lower rates than private insurers can. So that’s not where the savings are coming from. Rather, Ryan’s plan saves money by capping the growth of Medicare at inflation. The theory is that giving seniors a choice of insurers will bring down costs and make that cap viable, but there’s no evidence, anywhere, that giving seniors a choice of insurance options will dramatically cut costs. Rather, the repetition of the word “choice” hides the real way Ryan’s plan works, which is to shift costs, making seniors pay more for private care. That eases the pressure on the federal government by cranking up the pressure on seniors and their families.
However, the real story isn’t what Ryan said but what he didn’t say. The word “Medicaid” never passed his lips. The section on Medicare was perfunctory at best. This wasn’t a speech written to save his embattled reform. This was a speech written to save Ryan. His plan has put his reputation as a viable national Republican and a smart economic messenger at risk, and this speech was an effort to show that, budget aside, he’s still got the magic that made him look like such an effective foil to Obama lo those many months ago. That’s why the speech was delivered in Chicago — Obama’s home town, thus ensuring lots of Ryan vs. Obama headlines — and why it emphasized coinages such as “shared scarcity.” But the real news here is that Ryan’s specific reforms are, for now, dead, and even he’s decided against mounting a serious effort to revive them.