Ryan’s first Medicare reform plan was fairly accurately described as a voucher program: Seniors would each receive a support payment roughly based on the current per-capita amount of Medicare spending. Wealthy seniors would receive somewhat less, poor and sicker seniors somewhat more. The Ryan-Wyden plan, on the other hand, abandons the voucher concept in favor of a pure premium-support model.
Similarly, Ryan’s initial plan would have moved all future seniors who are younger than 55 today into the new private-insurance system, and traditional Medicare would be eliminated for new recipients. However, by the time he launched the second iteration of his plan, he had agreed to retain traditional Medicare as an option; seniors would be free to choose between the traditional program and the premium-support model.
Ryan also gradually agreed to loosen his proposal’s cap on overall Medicare spending. In his original plan, Medicare spending would not be allowed to grow any faster than the overall economy. In Ryan-Wyden, the cap is GDP growth plus a full percentage point. At the same time, the burden for exceeding growth caps has shifted from seniors themselves, who would have been required to pay more out of pocket under the original Roadmap for America’s Future
, to providers, who will have their reimbursements reduced under Ryan-Wyden.
The budget passed by the House this year was in some ways closer to Ryan’s original Medicare proposal than to the Ryan-Wyden plan. But Ryan has clearly shown that he is willing to water down his ideas if doing so garners Democratic support.
The downside of Ryan’s pragmatism is that each change has weakened his proposal. His original proposal would have reduced Medicare spending by far more than Ryan-Wyden. Given that even the most optimistic scenarios show Medicare running $38 trillion in the red, Ryan’s retreat is not a step in the right direction.
Still, it might have been justified if Ryan’s willingness to compromise had attracted substantial Democratic support. But, in the end, it was the Democrats who refused to budge. Senator Wyden was the only Democrat to join with Ryan, and even he later backed away from his support under pressure from his caucus.
Ryan’s pragmatic streak has also led him to cast many votes that seem to contradict his reputation as a budget hawk. Ryan would no doubt say that he won important concessions in exchange for those votes — for instance, getting health savings accounts included in the Medicare prescription-drug bill — or that the alternatives were worse. But any way you look at it, those votes hardly make Ryan an inflexible budget cutter.
All of this means that Ryan is not really the government-slashing savior envisioned by some conservatives. It also means that he is not the ideological hard-liner portrayed by some liberals. He is, in fact, likely to disappoint his conservative backers on occasion. But he may also be able to work across party lines to really change the disastrous course we are now on.
— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.