RE: The Democratic Plan

by Yuval Levin
Andrew, the quote you posted from Debbie Wasserman-Shultz on Face the Nation this morning makes for particularly appalling reading and viewing because, as you noted, her shamelessly demagogic answer was to a question that wasn’t even about the Ryan budget but rather about whether the Democrats had a plan of their own. But it’s worth a word about what she actually said, because it’s something a lot of Democrats (including the president and HHS secretary Sebelius) have been spouting about the Ryan budget. She said:
Like I said, the Republicans have a plan to end Medicare as we know it. What they would do is they would take the people who are younger than 55 years old today and tell them You know what? You’re on your own. Go and find private health insurance in the healthcare insurance market, we’re going to throw you to the wolves and allow insurance companies to deny you coverage and drop you for pre-existing conditions. We’re going to give you X amount of dollars and you figure it out.
None of this is true, and it’s especially important to understand that the latter parts are not true. The Ryan plan would not leave future seniors to find insurance on their own in the private market, and it wouldn’t allow insurance companies to deny coverage or drop people for pre-existing conditions. It would continue the very reasonable practice of treating senior citizens differently than younger Americans when it comes to health care—giving them guaranteed coverage subsidized by the government at a level that would make it affordable for them. Seniors would be given a menu of approved options to choose from, all of which would be required to accept all Medicare recipients, to offer a plan with at least the level of coverage required by the Federal Employee Health Benefit Plan, and to charge all seniors of the same age the same rates. The premium support benefit that seniors get would be adjusted based on their age, their health, and their wealth (and the lowest-income seniors would get an additional pre-funded Medical Savings Account to cover remaining out-of-pocket costs).
So rather than having a board of 15 experts decide what treatments would be covered and what price controls would be imposed and leaving seniors with no options while still failing to prevent Medicare’s looming insolvency—which is roughly the Democratic plan—the Republican approach would let seniors decide on their insurance plan from a range of guaranteed options and provide them with a subsidy to help fund that plan, with those most in need getting the most help.
They would be buying insurance with the premium-support payment, not paying directly for coverage, so the idea that if you got sick you would “run out of the government voucher and then you run out of your own money, you’re left to scrape together charity care, go without care, die sooner” (as Secretary Sebelius put it a few weeks ago) is patent nonsense. Seniors would choose a plan—a plan with limits on out-of-pocket expenses and with no exclusions for pre-existing conditions, etc.—and if they got sick they would be insured. And insurers would have the freedom to design these plans (and work with providers to design new approaches to delivering medical services) in ways that would make the plans most attractive to consumers—i.e. in ways that would better provide what seniors want at lower costs. And (unlike today’s Medicare Advantage, for instance) they would not have to do this under the shadow of the existing fee-for-service Medicare system, with its enormous incentives for inefficiency and waste. This approach would therefore, as the actuary of the Medicare program in Obama’s own HHS put it earlier this year, have a better chance than the Democrats’ approach of reducing health-care costs while sustaining quality, affordable coverage, which is the name of the game.
These are facts that bear repeating, and that should be repeated often enough that they occur even to CBS reporters confronted with Debbie Wasserman-Shultz on a Sunday morning.

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