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Thursday, August 16, 2012

How Ryan duped Wyden, cont.

In my last post, I noted that
  1. Senator Ron Wyden, by partnering with Paul Ryan last December in a proposal to convert Medicare to a premium-support program, seriously blurred Democrats' line of attack on Ryan/Romney Medicare reform proposals.
  2. Wyden himself is having difficulty articulating the differences between that joint proposal and the Medicare reform plan included in Ryan's 2013 budget ("Ryan 2013").
  3. Those differences are real, pertaining to the ways in which costs are controlled and the degree to which increased costs are passed on to seniors.
The key differences are that 1) Wyden-Ryan caps overall Medicare cost growth at GDP +1%, vs. GDP +.5% under Ryan 2013; 2) Wyden-Ryan does not abolish the ACA's Independent Payment Advisory Board, which is mandated to furnish Congress with proposals to keep costs under the cap, mainly by reducing payments to providers in various ways; and 3) Wyden-Ryan caps seniors' yearly  out-of-pocket costs while Ryan 2013 does not.

That comparison was based on a report by Kaiser Family Foundation.  I have since compared the texts of the Wyden-Ryan proposal and the Medicare reform section of Ryan's 2013 budget.  The latter comparison shows that while the differences inferred by Kaiser are real, the earlier report -- surely at Ryan's impetus -- fudges the key distinction, which is whether cost increases in excess of yearly targets can be passed on to seniors. In fact, while Wyden-Ryan emphasizes controls on payments to providers as a means to keep costs below its GDP +1% cap, it leaves the door open to increases in premiums for higher income seniors as a way to cover cost increases in excess of the cap.  Moreover, while Wyden-Ryan does not demonize the Independent Payment Advisory Board (as Ryan 2013 does at length), it does not mention IPAB at all -- and dances around IPAB's function when laying out the means of keeping costs under the cap. Wyden-Ryan also takes one Ryanesque slap at IPAB-in-absence, listing as one the authors' principles,  "Build a strengthened program around the needs of patients, not bureaucrats" (p.8 )

In his 2013 budget, Ryan adopts much of the language of the Wyden-Ryan proposal -- as does the Romney campaign website. Ryan 2013 adopts the basic structure of premium support as described in Wyden-Ryan:
The Medicare Exchange would provide seniors with a competitive marketplace where they could choose a plan the same way Members of Congress do. All plans, including the traditional fee-for-service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution seniors would use to purchase the coverage that best serves their medical needs. The second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the coverage-support amount for the plan chosen by the senior.
Both plans also provide the same protections to lower income seniors, those currently eligible for Medicaid or other forms of income support. In the 2013 budget, however, Ryan drops some of the earlier proposal's protections against erosion of the "voucher value" for those who are not low-income.  In the excerpts from the Wyden-Ryan proposal below, italics mark language for which there is no equivalent in Ryan's 2013 budget.
Affordability: Coverage will be guaranteed through a new “premium support” system that encourages plans to provide high-quality care more efficiently. Private plans will compete directly with traditional Medicare based on their ability to provide quality coverage at an affordable lower cost. Premium support levels will be determined by the cost of the second-lowest-cost plan, as well as traditional Medicare. For the first time, seniors will be protected from catastrophic health care costs with a new limit on out-of-pocket costs for all seniors. Seniors who are eligible for Medicaid or other income assistance will be guaranteed ongoing coverage without any additional costs.

Protecting the Guarantee: In the event that these efforts do not stem the rising tide of Medicare spending, beginning in 2023 there will be a cap on cost growth of 1 percent over Gross Domestic Product, plus inflation. Any increase over that cap will be reflected in reduced support for the sectors most responsible for cost growth, including providers, drug companies, and means-tested premiums (p. 3)....

The high-income means-testing thresholds that exist in current law for the Parts B and D programs would apply to the new Medicare program, such that certain high-income seniors would pay an increased share of their premiums (p. 10).

Hmm, how do we "reduce support" for providers and drug companies when costs are rising too fast? Here too, Wyden-Ryan has language dropped from Ryan 2013 (my italics):
To offset an increase in the cos tof Medicare beyond the growth limit, Congress would be required to intervene and could implement policies that change provider reimbursements, program overhead, and means-tested premiums.The cap on the growth rate is intended to: (1) act as a fallback to assure the federal government budgetary savings and protect the future of Medicare; and (2) foster the proper incentives for providers and plans to develop more efficient methods of quality care delivery and attract seniors to those plans that succeed (p. 9).

"Congress would be required to intervene"...that is where the airbrushed IPAB makes a ghostly appearance. If Medicare cost growth exceeds the cap stipulated in the ACA, IPAB is required to recommend a package of changes to get cost growth back under the cap, and Congress is required to vote that package up or down, and replace it with equivalent savings if it's voted down. Is Congress's required intervention in the passage above a euphemism for IPAB or a substitute? Perhaps the answer would depend on which half of the duo you asked.

IPAB proposals, however, "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary cost sharing (including deductibles, coinsurance, and co-payments), or otherwise restrict benefits or modify eligibility criteria" (ACA consolidated bill Sec. 3403\1899A SSA page 409, as cited in Wikipedia). Wyden-Ryan would therefore require a change in law to allow premium increases to those deemed able to afford them as a means of keeping cost increases below the cap. 

Ryan (and now Romney) used Wyden as a dupe. Ryan's 2013 budget, under the rubric of "Bureaucrat Control" vs. "Patient Control," contrasts "the President's partisan health care law" with "Bipartisan solutions to preserve the Medicare guarantee" -- "bipartisan" thanks to Wyden alone.  At the same time, Ryan ditches the "bipartisan" plan's implicit reliance on IPAB to contain costs, repeatedly demonizing and smearing IPAB:
The President’s partisan health care law creates an unaccountable board of 15 unelected bureaucrats – the so-­‐called “Independent Payment Advisory Board” (IPAB) – empowered to  cut Medicare in ways that will result in denied care and restricted access for seniors. The bureaucrat-­‐imposed cuts threaten critical care for current seniors...

IPAB’s unelected and unaccountable bureaucrats have the power to determine what “rationing health care” means, allowing them to cut Medicare in ways that harm seniors’ access to providers and lead to the denial of critical care.
Ryan's so-called "Patient Control" scheme, in contrast, "strips unaccountable Washington bureaucrats of
their rationing power."

Ah, the detachment of legislative language..In reality, IPAB's recommendations must be certified by the chief actuary of the Centers for Medicare and Medicaid Services and then voted on by Congress, and the law expressly forbids any "rationing" of care.

Wyden provided an opening for this diatribe-as-legislation to present itself as "bipartisan."

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