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Tuesday, August 14, 2012

How Wyden muddled the Democrats' attack on RyanCare

Senator Ron Wyden, D-Oregon, is upset that people are casting the Medicare reform plan he put forward with Paul Ryan last December with the Medicare reform plan incorporated in Ryan's 2013 budget:
Flashing an anger and a willingness to counterpunch that’s rarely seen, Sen. Ron Wyden on Monday denounced suggestions that his ideas for reforming Medicare mirror those of Republican Mitt Romney and his new running mate Rep. Paul Ryan.
His protestation below strikes me, however, as a self-cancelling statement:
Wyden admitted he’s angry by what he says is a distortion of his policy and the fact his name is being invoked to provide political cover for a candidate he opposes.
“I’m not naive about modern politics,” he said. “I’m angry because I want to deal the primary domestic issue of our time … and this kind of stuff makes it harder,” he said.
Wyden, who’s supporting President Barack Obama’s re-election, said he’s annoyed because he’s forced to spend time “cleaning up the record.”
Wyden is annoyed? It's he who has seriously muddied the water for Democrats. In the home-state (Oregonian) article cited above, which is devoted entirely to voicing his complaints, he fails utterly to "clean up the record," i.e. articulate how the plan he co-sponsored with Ryan differs from the plan incorporated in the Ryan budget that the GOP-controlled House passed this spring.

Wyden voices two complaints. First, that Romney would repeal the ACA and so wipe out that law's cuts in payments to providers and Medicare Advantage insurers and its reforms to the ways in which Medicare payments are made. But Ryan's budget preserves those savings. Second, this:
“I have seen no evidence Mr. Romney will commit to protecting the Medicare guarantee” of providing healthcare to all seniors who quality.
Which means what? And does it apply to Ryan's 2012 budget?  An answer can be found not in Wyden's fulminations but in a detailed comparison of six Medicare "premium support plans" just published by the Kaiser Family Foundation.
The Kaiser comparison is in box-chart form, and in nearly all 16 boxes the Wyden-Ryan plan and Ryan's subsequent plan in his "Path to Prosperity budget are identical.  The differences are crucial but hard to sum up in a sound byte, as Wyden's failure in the Oregonian article demonstrates. Both plans set up ACA-style  insurance exchanges for seniors with a menu of private plans, and both also offer a traditional, government-run fee-for-service option (FFS Medicare).   In both plans, the private options would have to offer at least the "actuarial equivalent" of FFS Medicare.  Some private plans might cost more than FFS Medicare or an alternative benchmark, in which case the beneficiary would pay the difference; some plans might cost less, in which case the beneficiary would get a rebate.
The main difference is in how federal costs are controlled -- and who pays to keep them under control  Under Wyden-Ryan, the 'public option,'  FFS Medicare, would impose a limit on beneficiaries' out-of-pocket spending. The Ryan plan has no limit on out-of-pocket spending. That's what Wyden means by "the Medicare guarantee" -- that the main brunt of healthcare cost control won't be shifted to citizens.

Both plans impose a cap on payment growth: GDP +1% in  Wyden-Ryan, and GDP + .5% in Ryan solo.  Ryan solo passes on costs in excess of its tighter cap to users; Wyden-Ryan does not.  That's because Wyden-Ryan leaves the Independent Payment Advisory Board (IPAB) established by the ACA intact, while Ryan solo repeals it.  Under Wyden-Ryan (as summarized by Kaiser): 
If the growth in Medicare payments per beneficiary exceeded nominal GDP + 1 percent, then Congress would be required to intervene, and could implement policies that change provider reimbursements, drug companies, program overhead, and means-tested premiums  
I presume that Congress's intervention would be in accordance with the rules governing IPAB: the commission would make recommendations that Congress must vote up or down as a package, and if Congress rejects them, it must pass equivalent savings.  Here is the Ryan solo substitute:
IPAB and the other provisions in the ACA would be repealed. If the growth in Medicare
payments per beneficiary exceeded GDP + 0.5 percent, then Medicare beneficiaries would pay a larger share of plan bids.
There's the core difference between the two parties' approach to healthcare cost control. Democrats would move the federal government closer to enjoying the monopsony --sole power to set prices -- that enables governments of other wealthy countries to control healthcare costs more effectively than the U.S. market does.  Republicans would shift rising costs to consumers, trusting that somehow we consumers will impose pricing discipline on those from whom we buy medical services.  Ryan's solo plan shifts costs to seniors; Wyden-Ryan mandates that the government find ways to limit payments to providers.

By co-signing a plan with Ryan, Wyden has made that contrast harder to communicate.


Related:
Can the competition fairy control healthcare costs?
One big happy future family: Romneycare, Obamacare, Ryancare
How Ryan duped Wyden

1 comment:

  1. Wyden could unmuddle his position pretty fast with an appearance at the Democratic convention. It would certainly be high-profile.

    ReplyDelete