Paul Ryan's Medicare Plan: 'Obamacare' for Seniors?

By Chris Good

In its basic methods of supplying seniors with health care, TPM's Brian Beutler points out, House Budget Chairman Paul Ryan's Medicare plan works just like the new health care law President Obama signed last year:

The long-term Republican budget plan proposed by House Budget Committee Chairman Paul Ryan (R-WI) phases out Medicare as a guaranteed, universal, single-payer system and replaces it with a government-subsidized private insurance program. If that sounds familiar, it should.

"It's exactly like Obamacare," said NRSC chairman Sen. John Cornyn (R-TX) in the Capitol Thursday. "It is. It's exactly like it. Which strikes me as bizarre that you're seeing so much pushback [from Democrats]."


Beutler and Sen. Cornyn are right. As Ryan's staff explains it, the GOP's 2012 budget proposal, approved by the House on Friday, would phase out Medicare as an entity that pays for insurance directly. In 10 years, those turning 65 would get something different.

Under Ryan's proposal, the new Medicare would approve a handful of plans and make them available through an "exchange," essentially a government-run list. Medicare would pay seniors yearly sums to buy these approved plans, with poorer and sicker people getting more money. Ryan calls these payments "premium support."

That's essentially how the new Democratic health-care law works, though it applies this method to younger people, not seniors.

Under Obama's new law, beginning in 2014 the federal government and states will create localized exchanges for working-age people whose employers don't provide them with insurance. Individuals will receive need-based subsidies to buy insurance plans from the state-created exchanges. Those exchanges would offer their own, different lists of approved plans.

So, under both Ryan's plan and Obama's law, the government gives people money directly to help them buy private insurance. Poorer people get more, and everyone has to shop from a list of approved insurance plans.

There's one big difference here: Younger people and seniors have very different sets of health-care needs and costs. What works for one population might not work so well for the other.

While Ryan's revamped Medicare would approve private insurance plans for seniors to buy, those plans would presumably be very, very expensive, since seniors cost so much to cover. Given all the concern over whether Obama would drive up the cost of insurance by forcing insurance companies to cover everyone, including those who are more expensive to cover, it's reasonable that we should be raising the same questions about Ryan's plan.

Even if the poorer and sicker get more money, when we're talking about seniors it could prove much more difficult to make this type of plan work.

This article available online at:

http://www.theatlantic.com/politics/archive/2011/04/paul-ryans-medicare-plan-obamacare-for-seniors/237409/