Landmine In Paul Ryan’s Budget Blueprint

   on April 04 2014 3:23 PM
Ryan Paul June 2013
U.S. Rep. Paul Ryan, R-Wis. Reuters

Poor Congressman Paul Ryan (R-Wi.), his budget blueprint is being attacked by the left as hurting the poor and by the right (e.g., Sarah Palin) for not cutting spending enough.  But as House Republicans ponder their vote on the budget, they are at risk of overlooking a landmine buried deep within the blueprint’s text: turning Medicare into a version of Obamacare.

On page 39 of the blueprint, Ryan says that beginning in 2024, seniors would purchase health insurance from a carefully regulated ‘Medicare Exchange’. Yes, he actually uses the Obamacare word ‘Exchange’.

And just as with Obamacare, Ryan’s system is not simple.  How much a senior would receive in ‘premium support’ (this is not a voucher, says Ryan) would be determined by a complex formula based upon his/her income, cost of living, and health history, all of which would be monitored by a government agency.  As we’ve seen with Obamacare, implementing something like this would be a “breeze.”

The government agency also would conduct annual audits of each insurer/plan and penalize those with an above-average population of low-risk seniors (e.g., younger, no history of health problems), and use those penalties to pay insurers/plans with an above average population of high-risk seniors. In my opinion, this is Ryan’s gift to K-Street lobbyists, as they would work  like crazy to ensure their client either would not be penalized, or would receive their ‘fair share’ of the penalty revenue.

Also following Obamacare’s lead, plans under Ryan’s system would not exclude those with pre-existing conditions (a reasonable idea considering we’re talking about health insurance for seniors).

Ryan promises “[e]very senior would have access to a plan that offered as least as much value as a fee-for-service Medicare.”  At least he’s not saying that if you like your doctor and health plan you can keep them. 

What Ryan ignores in his blueprint is the stark lesson of Congressman David Jolly’s win in the March 11 special election in Florida.  Jolly and his Republican team understood how seniors in his district feared an Obamacare takeover of Medicare.  Much of this fear was based on how seniors typically receive their healthcare – and this applies everywhere, not just in the Sunshine State.

Seniors want local care (especially those who are fearful or unable to drive), thus in specific areas with large concentrations of seniors, care is available right in their neighborhood.  Consequently, this population tends to build trust relationships with their local doctor and ease of prescription refills from the drugstore across the street from their neighborhood medical building.

But under a private plan (whether it’s an Obamacare or Ryan plan) seniors could find themselves unwittingly choosing a plan that deems ‘Dr. Local’ as ‘out of network’ and requires them to use ‘Dr. Far-away.’  Perhaps Mr. Ryan assumes seniors are savvy shoppers of complex health insurance plans, and will make wise choices with no surprises.  In that case, Mr. Ryan’s seniors must live in Lake Woebegone Land, where all seniors are above average -- and have no trouble poring over questions about which docs are ‘in network’ and those who are not.

What does this mean for House Republicans in competitive races come November?  If they run on an anti-Obamacare message, they’re at risk of a counter-attack along the lines of ‘you’re a hypocrite -- you voted to turn Medicare into Obamacare’, or ‘you voted for Obamacare for seniors but not for the rest of us?’, etc.

There is one bright spot in Ryan’s budget blueprint – he no longer talks about creating personal accounts for Social Security.  Nine years of rejection by the voters to that concept (remember how President George W. Bush blew his post-re-election political capital in one throw by pushing for Social Security ‘personal accounts?) seems to have finally sunk in.

However, Ryan’s still stuck in his ‘premium support’ groove for Medicare, and that’s no help to his fellow House Republicans.  With Obamacare in force and wrecking the lives of thousands of Americans, the last thing we need is to put seniors into health insurance ‘exchanges’.

Lastly, I mean no offense to you Mr. Ryan, but millions of Americans had put their trust in Barack Obama and his promises – a trust that Obama has irrevocably ruined.  Why should Americans trust you and your solutions?  You haven’t made that case, and it’s way overdue.

Joanne Butler is a graduate of the Kennedy School of Government at Harvard University and a former professional Republican staff member at the U.S. House of Representatives Ways and Means Committee.

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