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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Brief Note on Paul Ryan and the Medicare Prescription Drug Benefit



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One aspect of the coverage that is particularly frustrating is that Ryan’s critics are pointing to his support for the Medicare prescription drug benefit as a sign that he is unserious about reform. What is not very well understood is that the Medicare prescription drug benefit was originally linked to an earlier version of premium support. Here is how the Washington Post described premium support in November of 2003:

* In health policy, an alternative to the current Medicare financing arrangement by which recipients would be provided a fixed sum to buy one of several health insurance policies offering comparable levels of coverage.

* An idea backed by President Bush, congressional Republicans and centrist Democrats to allow private health plans to compete with traditional Medicare on the basis of cost and quality.

* According to supporters, a mechanism that would give seniors more choice while making it possible for the government to adjust Medicare expenditures based on recipients’ health, their household income and the cost of delivering medical services where they live.

* According to liberal critics, a euphemism for privatizing the Medicare program that would encourage healthier seniors to opt out of the government system and pay lower premiums, leaving those who are sicker and poorer to remain and pay higher out-of-pocket expenses.

* A term that has become so politically divisive during Medicare negotiations on Capitol Hill that one top Republican has offered to stop using it in favor of “comparative cost adjustment.”

Paul Ryan was one of the leading supporters of premium support during this debate. The following is drawn from a story by Juliet Eilperin that was published in the Washington Post in July 9, 2003:

Ryan and more than 40 other conservatives wrote to Speaker J. Dennis Hastert (R-Ill.) shortly before the House voted on the bill last month and warned they could not accept a final measure without the premium-support language. To win the votes needed for passage, Hastert promised to fight in the House-Senate conference to make sure the provision stays.

Proponents of the House measure, which would take full effect in 2010, say it would hold down costs by promoting a competitive health care market in which seniors could choose among several plans. But opponents say it would entice the healthiest seniors to leave Medicare, since they would qualify for lower premiums from companies that would reject less healthy applicants.

On the 27th of that month, Amy Goldstein of the Washington Post reported the following:

The House and Senate versions of the legislation overlap in basic respects. Both would, for the first time, offer everyone in Medicare prescription drug coverage, which patients could obtain through a separate insurance policy or through a private health plan that provided all their care. Both would encourage the elderly to sign up for preferred-provider networks, health maintenance organizations or other private alternatives to the traditional fee-for-service program.

The drug benefits differ, however, in many details, including how much patients would pay for them. Deeper differences revolve around whether the program should largely remain as a government-run entitlement or whether it should rely mainly on market competition.

According to House members and senators of both parties, the largest disagreement stems from a provision in the House bill — absent from the Senate’s — that would in 2010 create a system known as “premium support,” essentially requiring the traditional program to compete with private health plans based on price.

Ultimately, resistance from Democrats and moderate Republicans like Sen. Olympia Snowe (R-ME), however, led congressional Republicans to back away from premium support. 

It could be that Ryan was wrong to back the Medicare prescription drug benefit despite the fact that it did not implement premium support. But it seems at least possible that he did so because he believes that Medicare beneficiaries should have access to high-quality subsidized prescription drug coverage, and that he’d be willing to make a concession on a point of principle to achieve that goal. 

Yet does this fit the narrative that Ryan is an extremist? One assumes that it will instead be used to reinforce the notion that Ryan is a partisan and an opportunist, which is fair enough. If that is true, however, it is hard to believe that he would embrace radical policies destined to be rejected by voters once implemented, as that would prove politically problematic. Ryan’s critics have to choose: if he is a wild-eyed extremist, his support for the Medicare prescription drug benefit can’t be used as part of the case for the prosecution. If he is a crass opportunist, he will presumably act in accordance with the wishes and interests of swing voters. 

There is, of course, another possibility: he is a public-spirited person who has strong ideological beliefs, but he is willing to adjust them when necessary to reach a compromise. This view is reinforced to at least some degree by his willingness to work with moderate Democrats on revamping his Medicare reform proposal.



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