There is no question that Medicare needs to be modernized since its expenditures are out of control, and that is why a reform proposal by U.S. Congressman Paul Ryan (R-WI) is welcome news. Proponents persuasively argue that its implementation by Congress would ease the burden on taxpayers while introducing private market competition to dramatically control costs nationwide.
Now that the first anniversary of Obamacare has passed, it should be clear to almost all that the federal government bureaucracy is basically in charge of healthcare policy. This expensive legislation, with its transition period of several years, is already leading to steep declines of healthcare choice and quality. With regard to Medicare, the government sets prices for thousands of services, then pays any physician or medical facility based on a visit. This absurd fee schedule applies to the best and the worst medical facility, and bills for the patient visit continue to be sent to the overburdened taxpayer. The Ryan proposal seeks to end this growing and unsustainable problem.
Under the Ryan premium support model, seniors would be able to pick from an array of private insurance options of the kind that younger workers in the private sector utilize. These plans would be subsidized by a defined contribution, roughly equal to what the government now spends per person. This $15,000 subsidy would grow over time, but seniors who want more expensive plans would be able to pay extra.
The Wall Street Journal rightly notes that ‘premium support would create a market reward for the services that consumers value. Because seniors would be chipping in at the margin, only above the fixed-dollar subsidy, most would favor lower premiums.’ My organization– the conservative alternative to the AARP– likes the fact that insurers would compete to supply them, and providers in turn would have a reason to improve healthcare delivery and services.
President Barack Obama offers no reform and no vision regarding healthcare and Medicare policy – except for government rationing of healthcare services and more debt. Especially alarming is what the Payment Advisory Board, created by the Obamacare law, will do. Unless the law is repealed, starting in 2014 this board is charged with holding Medicare spending to certain limits. That means 15 unelected political hacks will start dictating how seniors will receive less and less service via flat pricing. Outrageous.
In this context, public pressure should be brought to bear on our representatives and senators to support congressional passage of a commonsense Ryan-type plan. Remember this: Ryan seeks to let seniors choose which private Medicare-financed insurance policies to buy, while Obama wants Americans to come under the rigid dictatorship of 15 appointed “health experts.” Which approach do you like?
Kent is the CEO of the American Seniors Association.