As Yuval Levin mentions below, Rep. Paul Ryan’s new budget proposes a slightly different Medicare-reform plan than the one he introduced last year. Under the new proposal, senior citizens would be able to choose a fee-for-service plan run by the government; and rather than growing with the inflation rate, subsidy levels would be determined through a competitive-bidding process. The competitive-bidding feature strikes me as an advance for conservatism rather than a retreat, and even better an advance that nullifies a common liberal critique of last year’s plan. (I don’t see how anyone can continue to argue with a straight face that the plan shifts an ever-larger proportion of health-care costs to senior citizens.)
I am given to understand that Ryan wanted the plan to include a traditional fee-for-service option from the beginning–in part because some conservative congressmen wanted it–but had to work with the Congressional Budget Office to get it to certify that such a plan would work under its assumptions. Over the last year he has been able to get CBO sign-off. From Ryan’s perspective, the current version of the Medicare reform proposal isn’t a watering down of last year’s version. He’s now closer to what he wanted all along.
I think the plan ought to make another advance. Delaying implementation of Medicare reform to hold current seniors and near-retirees “harmless” made more sense when there was no government-run fee-for-service option in the reform plan. The idea was that if they really liked what they have (or are expecting to have in the near future), it shouldn’t be taken away from them. But the new reform plan means it won’t be taken away even after full implementation. So why not start earlier, and generate more near-term savings?