Sen. Ron Wyden (D-OR) is teaming up with Paul Ryan, the House’s top budget guy and the author of the GOP’s controversial budget which proposes phasing out traditional Medicare and replacing it with a private plan. The two announced via The Washington Post that they’ll be teaming up on a different version of that Medicare plan — one that closely mimics plans offered by leading GOP presidential candidates Newt Gingrich and Mitt Romney, and a proposal authored by former Sen. Pete Domenici and former Clinton budget director Alice Rivlin, which loomed large in the Super Committee’s failed negotiations.
The move makes Wyden the first elected Democrat to endorse creating a premium-support system to compete with traditional fee-for-service Medicare, and for Ryan represents a de facto admission that his own plan was too radical to ever gain bipartisan support. That’s bound to affect how congressional and presidential candidates approach the issue, which will feature prominently in next year’s elections. But it raises a number of other questions, both about the merits of the policy and of the political calculus behind it.
Two things here: one, I don't want to hear how President Obama is the one "putting Medicare on the block" anymore with Wyden buying into this cockamamie scheme. Backing a Paul Ryan plan -- any Paul Ryan plan -- is what the end of Medicare as we know it looks like.
Secondly, the plan is basically turning Medicare into the PPACA.
The policy itself allows insurers to compete with traditional Medicare turning Medicare essentially into a public option on a private insurance exchange. Wyden and Ryan would give patients subsidies that could be applied to either private insurance or fee for service Medicare. It has features of both a “defined contribution” and “defined benefit” program. All plans including Medicare would have to meet a high benefit standard. But if seniors were to choose plans that exceeded a benchmark cost they would be required to pay the difference out of pocket. If Medicare itself were to come in below the benchmark, it would function no differently than Medicare does right now. If Medicare were to exceed the benchmark, though, seniors would have to pay more out of pocket to enroll in it.
And here's where we get into all kinds of ugly problems: the odds of a for-profit insurer being able to provide something as good as or better than Medicare's benefit standard for less money is, well, a complete and utter fantasy. That's going to leave Medicare as the only option to buy into for a huge percentage of seniors.
And it's a moot point anyway: no Baby Boomer will ever have their Medicare or Social Security benefits touched. My generation on the other hand, well, let's just say we're going to be told to accept this new plan or something like it or else. There's not going to be any cost savings for the next twenty years or so out of the Medicare end of things, which means the only serious question is "What will await my generation when I'm supposedly ready to retire in 35 years?"
Most of us are convinced it will be "nothing". The way the Tea Party is going, government itself will be outlawed by then and we'll all live in anarcho-capitalist city states like 21st century Spartans.
Pit-kicking will be on Thursdays.
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