Over at EconLog, Arnold Kling addresses the fundamental problems with the argument that, while we must restrict taxpayers’ exposure to “Medicare cost inflation,” Chairman Ryan’s plan to reform Medicare into a premium support program is immoral:
The term “cost inflation” means a pure increase in prices charged for the same services. Some of that takes place. But most of the rise in health care spending reflects increased use of expensive inputs, in particular fancy equipment and medical specialists.
There are always three ways to deal with the increased usage of premium medicine.
a) have government experts ration medical services
b) give consumers fixed amounts of money based on income and medical condition, and having them make their own decisions
c) tell people that neither (a) nor (b) is necessary
Remember that what everybody wants for themselves is unlimited access to medical services without having to pay for them. So the politics of health care push in the direction of (c). I am always ready to have the debate between (a) and (b). But instead, politicians and pundits attack (b) with (c). That is fundamentally immoral.
And yet that’s all we hear about these days. Liberals complain that the Ryan plan puts an end to the government’s 45-year-old “promises that once you reach 65, you will be covered by a government-financed health-insurance plan.” But, as Arnold Kling explains, that’s a bogus argument because “there is essentially zero chance that the government will keep its current promises” on Medicare. Really, the question is how we will address this fact. While I have some issues with the plan (mainly that it doesn’t go far enough), Chairman Ryan’s proposal tackles a problem that must be addressed and also curbs the debt-to-GDP ratio effectively. That’s more than we can say for most lawmakers in Congress.
Meanwhile, Reason’s Peter Suderman reports that some pundits are wondering why the Ryan reforms don’t touch the benefits of seniors or anyone set to enroll in Medicare during the next decade:
Kevin Drum, echoing David Leonhardt of The New York Times, notes that Republican Rep. Paul Ryan’s Medicare reform plan, which would shift the seniors health insurance program to a premium support system, excludes both current seniors and anyone who is less than ten years away from entering the program. If shared sacrifice is what’s necessary, Drum wonders, why aren’t seniors included?
Politics is the answer, Suderman speculates. He concludes on a very happy note:
Still, I’m glad to see that Drum and Leonhardt have noticed that Ryan’s Medicare plan doesn’t touch benefits for seniors or anyone set to enroll during the next decade, and I’ll look forward to both of them explaining that fact to the Democrats now warning that the Ryan plan balances the budget “on the backs of seniors” and is akin to “war on the elderly.” It’s really not. As Drum helpfully reminds us, under Ryan’s proposal, current retirees get a comparatively “sweet deal.”