The Reality of Health Care Plans

A number of you have asked me what I think of Paul Ryan's health care plan.  I think it's a serious plan--but it's serious in the way that serious government plans are, which is to say that it has virtually no hope of being enacted as written.

Consider Matt Yglesias' relatively uncharitable, but accurate, summation:

Right now, the rapidly rising cost of health care implies rapidly increasing Medicare costs. Ryan doesn't have a plan to control those exploding costs. Instead, his plan is to refuse to pay the bill. This saves a ton of money. If instead of paying for old people's health care you just . . . don't pay for their health care, then you reduce expenditures a great moment. But the reason nobody's come up with this genius proposal before is that we've had a decades-long commitment to finding a way to ensure a dignified retirement, including adequate medical care.

Of course, this is true of the Democratic plans too; it's just that their "not paying" consists of equally arbitrary caps on provider payments which will cause some providers to exit Medicare, plus giving some board the power to decide what treatments we can't cover.  Whether you prefer the Democratic plan or the Republican plan boils down to whether you want the decisions about which stuff not to buy to be made by possibly ignorant consumers, or possibly arrogant technocrats.  I had a pretty good experience, when I was uninsured, with getting providers to think seriously about which costs it was worth imposing on me.  And I think that the ability of a centralized board to decide on "the right treatment" for 300 million patients is highly oversold.  But I was a pretty educated patient, so your mileage may vary.

The problem with both sets of plans is that the voucher cap would never withstand the assault from angry and frightened seniors, while the provider caps and treatment disallowals would never withstand the pressure of various other interest groups.  That's why I want to turn the Federal government into an income-based catastrophic insurer, for expenses that exceed 15-20% of AGI.  I don't think there's much hope of controlling cancer treatments or heart surgery.  But I think we could eliminate a hell of a lot of unnecessary day to day expenses--the ER visits of convenience and CYA tests for diseases there's no indication the patient has.  But the only way we'll do that is by making the consumer responsible for those costs.  Short of that, we're just rearranging the deck chairs on the Titanic.