April 6, 2011
On Medicare and the Ryan Plan

David Leonhardt at the New York TImes has a useful take on the Ryan plan for Medicare reform. As is so often the case, Leonhardt offers a measured, careful look at the question that avoids both the liberal and the conservative versions of “the sky is falling!” In particular, he focuses on the fact that Ryan exempts anyone 55 or older from feeling the pain of Medicare reform while at the same time offering tax cuts to the better off. Given Americans’ likely expected lifespans, this means that Medicare costs will soar for more than 30 years … all while shifting the costs onto people less than 55.

Since most people reading this don’t have a subscription to the Times, I’ll copy the best sections of Leonhardt’s comments below. But on a different note: it’s okay to subscribe to things. Really. You can’t bemoan the dearth of good paying jobs in one post and then demand that you get everything for free in the next. It’s not how it works.

From David Leonhardt:

"A fairer, more fiscally conservative plan would not postpone dealing with Medicare. It would leave in place the cost control measures in the health reform bill and go even further to reward the quality of care rather than the volume. Obviously, these steps would run some risk of restricting good treatments, too. But, remember, we’re facing “an existential threat.” We can’t limit ourselves to solutions without risks.

Next, the federal government would raise taxes. As countries have grown richer over time, they have historically paid higher taxes — to cover the costs of a strong military, good schools, comfortable retirements and other luxuries that the free market doesn’t provide.

Affluent Americans, in particular, can afford higher taxes. They have received far larger raises in recent decades than any other income group, and their tax rates have fallen far more. Yet Mr. Ryan would reduce them further.

Some health economists believe that a combination of higher taxes and more Medicare cost controls can solve the problem. Mr. Ryan does not. And his skepticism is healthy.

To him, the only way to reduce Medicare’s cost growth is to stop shielding people from the consequences of their decisions. If they want almost limitless medical treatments, they won’t be able to foist the bill on taxpayers, as they do now. They will instead have to buy a generous insurance plan, partly with their own money. The resulting market forces, Mr. Ryan argues, will eventually bring down costs and leave most people better off.

He may well be right that a solution along these lines is ultimately where health care needs to go. But it would be a lot easier to trust in the merits of his plan if he weren’t so busy promising 75 million Americans that they will never have to be a part of it.”

  1. politicalprof posted this