Paul Ryan’s Plan

Ezra Klein looked at the Medicaid portions of Ryan's plan Cutting Medicaid means cutting care for the poor, sick and elderly. "Ryan’s op-ed introducing his budget lists Medicaid under “welfare reform,” reflecting the widespread belief that Medicaid is a program for the poor. That belief is wrong, or at least incomplete. A full two-thirds of Medicaid’s spending goes to seniors and people with disabilities — even though seniors and the disabled are only a quarter of Medicaid’s members. Sharply cutting Medicaid means sharply cutting their benefits, as that’s where the bulk of Medicaid’s money goes."

"But perhaps cutting it wouldn’t be so bad if there were a lot of waste in Medicaid. But there isn’t. Medicaid is cheap. Arguably too cheap. Its reimbursements are so low many doctors won’t accept Medicaid patients. Its costs grew less quickly than those of private insurance over the past decade, and at this point, a Medicaid plan is about 20 percent cheaper than an equivalent private-insurance plan. As it happens, I don’t think Medicaid is a great program, and I’d be perfectly happy to see it moved onto the exchanges once health-care reform is up and running. But the reason that’s unlikely to happen isn’t ideology. It’s money. Giving Medicaid members private insurance would cost many billions of dollars."

Yglesias follows up, Paul Ryan Slams Medicaid’s Middle Class Beneficiaries As The New Welfare Queens. "And what about the steep Medicaid cuts? Well according to Ryan op-ed they’re a kind of “welfare reform”. In other words, people are supposed to think Medicaid is that “bad” kind of government spending, the one that goes to shiftless black folks not hard-working Americans like you and me and Paul Ryan."

Medicaid "is mostly a program for the elderly and the disabled. It’s the main way we finance long-term care in this country. If you don’t directly benefit from it, you very likely have a parent or grandparent who does and whose financial needs will simply tend to fall on you if the program is cut. Meanwhile, in terms of the “welfare” aspect of Medicaid by far the largest set of poor people it covers are poor children. Is Ryan’s view that these kids should have worked harder to have rich parents?"

As to his Medicare proposals, Kevin Drum asks So Where's the Medicare Plan?. He says there's just two paragraphs in his proposal. "For now, I'm going to assume that I'm missing something. There must be a more detailed document around somewhere that I haven't found yet." Later he wrote: "his Medicare proposal is basically just a PR document, right? It has zero chance of being enacted, and there's pretty much zero chance of anything like it being enacted. It's just a conversation starter, not a serious attempt to produce a workable piece of legislation."


Ryan released a whole proposed budget. The National Journal writes, The Ryan Budget: Big Cuts, Bigger Questions. Mathew Yglesias points out Paul Ryan’s Tax Plan Based On Discredited Heritage Foundation Analysis That Forecast Bush Boom and then picks up on one point, Paul Ryan’s Plan Counts On Reducing Unemployment To Below “Full Employment” Level — By Magic!. "An analysis performed by the conservative Heritage Foundation at Ryan’s request found the unemployment rate would be reduced to 4 percent in 2015 by Ryan’s budget, an incredibly low number when many economists believe the economy will not return to so-called “full employment” of about 5 percent until years after that. It’s worth noting that this is not just unrealistic, it’s impossible. When unemployment drops beneath 5 percent, the Federal Reserve starts raising interest rates until a recession pushes it back up.” Then he wrote: "According to the study cited above, Mr Ryan’s plan will bring the unemployment rate down to 6.4% next year, 4.0% in 2015, and 2.8% in 2021.” 2.8 percent in 2021! There no way of doing this short of shooting unemployed people in the back of the head."

Krugman wrote "This is ridiculous; it’s megalomaniacal. If Obama tried to claim that his policies would achieve anything like this, he’d be laughed out of office." with this graph:



That's convincing isn't it?

The Economist has a good post, You put the load right on me. "The idea of making market forces work to bring down health-care and health-insurance costs is plausible. What's not plausible is the idea that average individuals are the best-placed people to be carrying out those negotiations. It's entirely possible to set up markets where powerful, well-informed organisations represent individuals in negotiations with insurers and providers in order to bring prices down, without putting those individuals at risk of losing their coverage or of having to go untreated. That's how the Affordable Care Act envisions saving money on Medicare, without running the risk that the elderly will lose their health-insurance coverage. Mr Ryan's proposal is to save money by capping the amount the government will spend on insurance, and letting individual seniors fight the rest out on their own."

James Kwak wrote on this a couple of weeks ago (I'm catching up on my Instapaper queue). Incentives Don’t Work. "One refrain you heard incessantly during the health care reform debate was that we have high health care costs because of overconsumption and we have overconsumption because people don’t bear a high enough share of their marginal health care costs, so the solution is to increase copays and deductibles. This is what Economics 101 would tell you: people respond to incentives. But Gawande discussed one large company that tried this year after year, but only saw their costs going up. The problem was that while most members responded to the higher copays and kept their costs more or less steady, the 5 percent of members who generated 60 percent of the costs behaved differently. Or, rather, they also reduced consumption (of doctor’s visits and prescription medications), but as a result they often had catastrophic outcomes. These were people with heart disease on cholesterol-lowering medications, and when they went off their medications they ended up in the hospital with heart attacks and then with congestive heart failure."

Mark Thoma summed up the Economist's post as The Ryan Plan Is Fundamentally Immoral and followed up on the issues with market-based solutions. "The game being played here has little to do with the budget itself. It is an ideological debate about the role and obligation of government. First, cut taxes for the wealthy to create a big hole in the budget, have a Great Recession aid the cause by stripping government at all levels of tax revenue, increasing costs of serving people, and creating short-run deficit problems (and a war here and there doesn't hurt the cause either), and finally use the deficit as a club against social insurance programs such as Medicare and Social Security. The cover for the attempt to get government out of the social insurance game is the deficit, but deficit reduction is not the primary purpose. The goal to reduce the government's involvement in these programs by whatever means. If deficit reduction was, in fact, the primary goal, there are much better ways to do this than the Ryan plan, e.g. the market-based mechanisms in the ACA." Ezra Klein adds a bit to that in How to do Ryan’s health-care reforms right.


I of course get annoyed at the hypocrisy of the right.

Think Progress reports RNC Chair Priebus Criticizes Obama For Cutting Medicare, Then Touts Paul Ryan’s Medicare-Busting Budget. On it's anniversary, Ezra Klein tried to explain the health care reform law.