This is, of course, a trick question. That paragraph describes both the Affordable Care Act and Ryan’s proposed Medicare reforms. The insurance markets in both plans are essentially identical. And for good reason.
The Affordable Care Act was based on two decades of Republican thinking about health care. The basic structure was first proposed by the conservative Heritage Foundation in 1989, first written into a bill by Senate Republicans in 1993, and first passed into law by a Republican governor by the name of Mitt Romney in 2005.
Around 2008, Democrats decided they could live with a system based on private health insurers, federal subsidies and an individual mandate as long as it produced universal coverage. A year later, Republicans decided they couldn’t live with such a system, at least not if a Democratic president was proposing it.
The problem for Republicans, however, is that they don’t have a better — or even alternative — idea. Since the passage of the Affordable Care Act, “repeal and replace” has been a reliable applause line at tea party rallies and an oft-uttered incantation on the floor of the House of Representatives. But while Republicans have united around “repeal” of health-care reform, they haven’t managed to come up with a policy for “replace.”
Instead, they’ve opted to apply their old policy framework — the one the Democrats stole — to Medicare. That has left the two parties in a somewhat odd position: Democrats support the Republicans’ old idea for the under-65 set, but oppose it for the over-65 set. Republicans support the Democrats’ new idea for the over-65 set, but oppose it for the under-65 set.
This isn’t quite as incoherent as it seems. Democrats say they would prefer Medicare-for-all for the under-65 set, but they’ll take whatever steps toward universal health insurance they can get. Republicans say they would prefer a more free-market approach for the over-65 set, but that a seniors’ version of “Obamacare” is nevertheless a step in the right direction. For both parties, it’s the direction of the policy, rather than the policy itself, that matters.
There’s an added complication for Republicans. They have assumed huge savings from applying the exchange-and-subsidies model to Medicare. But they don’t assume — in fact they vehemently deny — that those same savings would result from the identical policy mechanism in the Affordable Care Act. The Democrats haven’t assumed significant savings from the exchange-and-subsidies model in either case. If the concept works as well as Ryan says it will, then the Affordable Care Act will cost far, far less than is currently projected. There’s no compelling reason to believe competitive bidding will cut costs for seniors but fail to do so among younger, healthier consumers who, if anything, are in a better position to change plans every few years and therefore pressure insurers to cut costs.