Do you remember when President Obama and the Democrats wanted to include a public option in the Affordable Care Act alongside insurance plans offered by private insurers?
Republicans said doing so would undermine health care reform, enticing employers to drop employee coverage and force most American’s into a government-run health care system that would put private insurers out of business and gobble up taxpayer dollars. So how is Rep. Paul Ryan’s (R-Wis.) newest proposal to offer a traditional Medicare plan alongside private insurers in his Medicare reform proposal any different than what Obama and the Democrats proposed?
Ryan’s proposal is supposed to be a concession for his initial proposal to completely privatize Medicare and give the program’s elderly and disabled beneficiaries a voucher to help pay for insurance bought through a Medicare insurance exchange. In Ryan’s 2012 proposal all insurance plans would include a minimum set of benefits equal to the value of those in the traditional program. However, “benefits equal in value” does not mean that all plans will offer the same benefits. If Medicare beneficiaries believe that the traditional Medicare plan offers better coverage than the plans offered by private insurers and the government pays the premium, why would they buy a private insurer’s plan?
Let’s imagine that some Medicare beneficiaries do opt for the private plans. Will the healthier participants pay a lower premium? It’s very likely. Will the sicker, older Medicare beneficiaries with costlier ailments be steered towards traditional Medicare, costing taxpayers even more money that could lead to the system’s collapse? I think so.
So where’s the reform? It will come from fewer benefits to Medicare recipients because Ryan’s Medicare reform imposes a hard spending cap that forces automatic cuts to providers and beneficiaries if the Medicare budget exceeds targets. That a real possibility with Medicare spending growth capped at 0.5 percent above the gross domestic product.
Ryan included a “public option” in his Medicare reform proposal because some Republicans think it will make his Medicare reform proposal more acceptable to the public. But I still want to know how this “public option” offering is different from what President Obama and the Democrats proposed when they were crafting the Affordable Care Act. Why don’t Republicans seem worried that a “public option” will hurt private insurers?
Because Medicare Advantage plans prove that private insurance cost more than traditional Medicare. Also the hard cap on Medicare spending that Ryan is proposing will eventually force more people into private insurance when traditional Medicare becomes insolvent because it is shouldering the lion share of the financial costs to treat sick and older people.
Before it’s all said and done, Medicare’s elderly and disabled beneficiaries may have to pay more of their health care bills in retirement. But don’t be fooled by the “public option” Ryan is offering to appease Medicare beneficiaries worried that they will benefits. And don’t mistake Ryan’s intentions as anything other than a plan to privatize Medicare at the expense of senior citizens.