The selection of Paul Ryan as the Vice Presidential nominee on the Republican side meant that Senator Ron Wyden’s name would suddenly come up a lot in national political discussions. Wyden doesn’t appear on Sunday shows much and he comes from a Western state, so he’s typically an un-politician among the Beltway elite. But he drafted a white paper with Ryan about a potential premium support program for Medicare, and so he has been name-checked by the GOP Presidential ticket at every opportunity over the past week.
It’s undeniable that Wyden collaborated with Ryan on the plan, which would end automatic placement in traditional Medicare and instead give seniors a choice of how to spend their voucher, in a government-run Medicare program or with a menu of private insurers.
Sitting next to Ryan at the Bipartisan Policy Center event, Wyden said, “There’s a window of opportunity here, a chance to change the conversation, lower the decibel level … and see if we can bring together progressives and conservatives” to create a system in which people on Medicare choose a private-sector health plan or traditional Medicare, if they want.
Wyden said their plan was “a model driven by choices and competition, here with traditional Medicare, and approaches that would come from the private sector, innovation that the private sector offers. We believe it’s going to work … .”
He added later at that event that their plan “makes some of the old discussion potentially irrelevant.”
Here are Wyden’s main points. First, Romney would repeal the Affordable Care Act, which Wyden says is crucial to preserve, particularly the changes in Medicare relative to delivery system reforms (like paying for quality instead of quantity, for example, or coordinated care), in order for his Medicare premium support plan to work. Second, Romney’s plan for Medicaid, by block-granting the program, would undermine the Medicare plan as well, because dual eligibles who qualify for Medicare and Medicaid would lose their coverage under Medicaid.
These changes were already contemplated by Ryan in his budget before Wyden worked on the white paper with him, so it doesn’t afford Wyden much protection from the charges that he was duped. But he said that House Republicans and Romney, at the top of the ticket, rejected the evolution of Ryan’s thinking from his initial “end Medicare as we know it” budget to the Ryan/Wyden white paper. This is why Wyden spoke against the Medicare plan in the House Republican budget, and voted against it on the Senate floor.
None of this gets at the question of why it makes sense to do the premium support plan on its own. Under the plan, Medicare’s risk pool would gradually shrink as some choose the private plans. Costs would allegedly be kept down through competitive bidding, with the cost of the voucher equal to either the lowest-cost or the second-lowest-cost coverage available. But costs inside Medicare and Medicaid have consistently fallen well below costs of health care in the private market. And you’d only be diluting the risk pools on both ends, by adding older, sicker people to private insurance, and removing the younger, relatively healthier elderly from Medicare. This turns the market for the elderly into an ideal form of the Affordable Care Act, with an exchange and a public option. But there is no public option for the under-65 crowd. If that were part of the equation, and you had an integrated system, then you could at least start the conversation. But nobody’s really calling for that, and furthermore, Republicans are undermining other public health programs like Medicaid. So all this does is weaken traditional Medicare, the lowest-cost program for health coverage out there, for nothing in return.
Wyden doesn’t want to admit this, but he’s stuck with the program he proposed. His claim that private health insurance already is an option for seniors, thanks to Medicare Advantage, elides the point that Medicare Advantage is so wasteful that Democrats were able to find hundreds of billions in savings just by cutting the overpayments. There’s every reason to believe that such a bubble would build up again, in a “competitive” market between Medicare and private insurance.
Ryan/Wyden wasn’t a very good idea. Wyden makes some good points in saying why the landscape has changed. I wish he would take the same critical eye to his own plan.