Policy By Ego

Many of the big supporters of the Health Care reform have said that the idea was to eventually apply apply its logic to Medicare. That is, that Medicare would eventually be a subsidy system with "choice" among private insurers and perhaps a public option (as long as the industry says it's ok.) I don't know that people understood that to be the eventual goal of the health care reforms, but evidently that was understood by many of those who were most enthusiastic about it.( In fact, a lot of people understood the opposite --- that the health care reforms would eventually lead to single-payer [1].)

Last night Democratic Senator Ron Wyden took a step toward making that "dream" a reality. He and Paul Ryan announced [2] that they have teamed up to promote a plan to make Medicare a voucher plan by 2022, (just as the second half of the baby boom enters the system.) One might have thought the prudent thing would be to wait and see how the health care reforms work before throwing the sickest population into the mix, but apparently we just "know" it's the way to go.

That's not to say that people won't be able to "buy" what we know as Medicare with their "supported premium", but because the spending will be capped for all, and almost assuredly subject to political exigencies, this is very likely to result in, at the very least, a more difficult system to navigate for the most ill and vulnerable adult citizens. My observation of the most elderly in the past few years is that they can't competently pay their phone bills, so this should be interesting. I suppose some kindly insurance salesmen will come to the rescue.

The good news on the political front is that this will help poor Paul Ryan out in what had been up until now a tough reelection campaign. Wyden has given him a way to soften his hardcore partisan image and present himself as a reasonable moderate in a split district. Nice of him. But you can understand why. Wyden sees himself as a health care guru but his plan for employee vouchers got muscled out in the ugly reform debate and so he's taking another stab at glory here. The fact that he's helping a Randian ideologue smooth out his image so that his career as chief destroyer of the welfare state can continue is just collateral damage.

Here's the thing. This is a lousy idea --- for many reasons, both substantively and politically. But don't listen to me. Here's [3] Igor Volsky on the Wyden-Ryan plan:

[H]ere, in a nutshell, is the problem: In an interview with the Washington Post, “Ryan and Wyden acknowledged that their plan might not bring in more savings than under the current law.” Yet they’re willing to set the nation on an untested path of private competition that breaks up the large market clout of Medicare (which is now experimenting with more efficient ways to pay providers) and pushes seniors into less efficient private plans. It moves the health care system closer to the Ryan ideal in which future Congresses would be able to reduce federal costs by eating away at the premium credit seniors receive. Over time, Medicare will start bleeding beneficiaries, becoming an ever smaller program.

Or listen to one of the original proponents of "premium support" Henry Aaron [4], from a few months back:

... I now believe that even with the protections we set forth, vouchers have serious shortcomings. Only systemic health care reform holds out real promise of slowing the growth of Medicare spending.

Predicted savings from vouchers or premium support are speculative. Cost shifting to the elderly, disabled, and poor and to states is not.

Medicare's size confers power, so far largely untapped, that no private plan can match to promote the systemic change that can improve quality and reduce cost. The advantages of choice in health care relate less to choice of insurance plan than to choice of provider, which traditional Medicare now provides and which many private plans restrict as a management tool.

Finally, the success of premium support depends on sustained and rigorous regulation of plan offerings and marketing that the current Congress shows no disposition to establish and maintain.

(Today, he's being non-committal.*)

Can anyone doubt that the current political stand-off is incapable of establishing and maintaining the kind of "sustained and rigorous regulation" that this would require? My God, we cannot even pass a yearly budget without the wingnut wrecking crew demanding a pile of human sacrifices and the Democrats weakly retorting with "we're open to all ideas."

Ezra Klein sets this up [5] as a crafty conundrum in which the conservatives have to sign on to a "public option" choice --- previously known as Medicare --- while the liberals have to explain why they love all this choice for those under 65 but not for the elderly. (Those of us who would prefer something closer to traditional Medicare for all are simply irrelevant.)He says the outcome will be determined by whether or not Ron Wyden is closer to "the middle" than Paul Ryan.

That's easy. Since the Republicans are remarkably disciplined and nearly 100% conservative, policy is dictated by the most conservative Democrat. And the most conservative Democrats are far closer ideologically to Ryan than Wyden. Wyden will end up being a useful idiot for the eventual destruction of Medicare. After all, "
even the liberal Ron Wyden" now believes that Medicare should be privatized.

Jonathan Cohn rejects this plan [6] on the merits, agreeing that there is simply no reason to believe that this mechanism will actually save money, and also adds a realistic political perspective:

... Wyden is embracing premium support and, in the process, lending respectability to Ryan and the House Republicans. Ryan although distancing himself from his former proposal, still isn’t coming to terms with the Affordable Care Act. That’s been the story for a while now: Democrats are more willing to compromise than Republicans. Until that changes, Democrats make concessions at their own peril and with great risk for their constituents.

Wyden has first-hand experience with Republican intransigence. When he introduced his universal coverage plan in late 2006, the political environment was different. Bipartisanship seemed possible. The Republican opposition was less extreme. But that was before Obama’s election and the decision, by leading Republicans, to make defeating him their top priority. Poor Bob Bennett paid the price: Conservatives in Utah, unable to get past his cooperation with Wyden, denied him the chance to seek reelection. Now he's out of Congress.

Wyden obviously believes it remains possible to reach across the aisle – and that this plan, at this time, can begin a constructive discussion between the parties of how to shore up Medicare. I just don't see it.

This could be the worst political time in history to propose something like this. That Wyden has opened the door for it --- and re-empowered an extremist like Paul Ryan, a man who characterizes progressivism as a "cancer" [7] --- is political malpractice of the highest order. (Not to mention that he's actually validating Mitt Romney [8] as well.) But I'm sure he'll get a lot of attention for his "bipartisan" bravery and that's a very valuable currency in Village circles.

Ryan, meanwhile, is chuckling at having his tattered reputation restored by a Democrat, just in time to rescue him from what was going to be a tough election. It's so much sweeter that way.

Update:

GINGRICH [9]: We have today a very important breakthrough in that there is a Wyden/Ryan Medicare reform bill. It represents Senator Wyden, the Democrat from Oregon, Congressman Paul Ryan from Wisconsin. It is a bipartisan effort to really come to grips with one of the major entitlement challenges we face and to have that bill introduced and have them publicly together talking about this is really a healthy, maybe it’s the beginning of breaking up the log jam and starting to get Democrats and Republicans to talk with each other. And I think that Paul Ryan and Ron Wyden deserve some of the credit. I mean this is a very courageous thing for each of them to do. To reach out, come together and offer a genuinely bipartisan bill, given the atmosphere you have in Washington.

Music to a Villagers' ears.

*wrong Aaron. Please excuse the error.