The Ryan plan to reform Medicare has been widely criticized mainly because it employs a voucher system. Among those critics is Paul Krugman. However, there is a different point of view that deserves serious consideration. Are the exchanges coming as part of the Affordable Care Act much different from a voucher program? Will the government simply keep increasing its subsidy to millions of Americans at a rate unconstrained by a reasonable percentage? How do you manage a vast government program such as health care without a managed budget? Consider this view on the matter. Critics of the Ryan plan have a lot to say but offer little concrete as an alternative. Even the many provisions contained in the Affordable Care Act while headed toward the right goal are untried, untested and difficult to measure with results unknown for many years. In effect they are a very soft approach to solving a very hard problem.
Professor Laurence Kotlikoff writes for Bloomberg.com
These questions are forcing Ryan’s critics to respond. Paul Krugman’s recent New York Times column, “Medicare Is Not Vouchercare,” is a case in point. Krugman manages to drop the V-word in his title and nine times in his column. As for his other words, they are, well,
First, Krugman suggests that Medicare directly pays all health-care providers. Not so. More than one fifth of Medicare participants are enrolled in Medicare Part C, in which the government makes payments to providers through private insurance companies. That’s the same system that Ryan is proposing, albeit for all participants.
Second, Krugman says vouchercare “would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual levels of premiums.”
Again, not so. All the plans — Ryan’s, Rivlin-Ryan, my own, the president’s health-care exchanges and Medicare Part C – - explicitly or implicitly adjust payments according to the patient’s risk profile, providing larger amounts for those with higher expected health-care costs.
Next Krugman claims that “If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.” Nope. The voucher plans will require insurers to offer a basic policy whose coverage is set by a medical panel. No one can be turned down by participating insurers.
I urge you to read the full article here.
- Competing Ideas for Saving Medicare (nytimes.com)
- Paul Krugman Simply Explains Why Ryan Care Ends Medicare As We Know It (alan.com)
- Vouchercare – When Truth is Demagoguery (jonathanturley.org)
Tags: Laurence Kotlikoff, Paul Krugman