HCR -- A Brief Look at the Ryan Plan

By John Ballard

I say "brief" because it only takes a moment to discover it is has little to do with health care and everything to do with corporate profits. With this plan those profits would accrue to insurers, device makers, drug companies and the rest of the disease-management industrial complex. The "health care" part would be like retail products, just enough in the package to entice the consumer to pay for packaging, marketing, distribution, sales bonuses and return on investment... and not a fraction of an ounce more.

The "plan" aims to replace Medicare with a voucher system by which seniors would receive health care through whatever private insurance arrangement they could afford. The amount of the voucher, like Social Security, would be indexed to inflation but the benefit amount would be determined, not by any stinking government committee but the wise council of the insurance industry.

~~~~~~     A Word about "Entitlements"     ~~~~~~

In the same way that pensions are being replaced by 401-K plans, Medicare, under the Ryan proposal, would be replaced by a plan paid for by individual beneficiaries, not society.

?In the case of retirement arrangements, terms now in use are defined benefits versus defined contributions. In other words, the burden of responsibility shifts from the employer to the employee. 

?In the case of health care there are two considerations: Where does it come from and who pays? In other words the burden of responsibility shifts from the Medicare program to the beneficiary. 

But there is a subtle deception lurking in this comparison. In the case of retirement, individual retirement arrangements are in addition to, not instead of, Social Security, which is the national safety net for those who no longer work. 

That's why it is called Social Security, not Individual Security.
And that is why privatizing that tax-supported plan is a nutty idea.

Social Security is a tax-supported system by which a working population is taxed for the benefit of a population which for whatever reason cannot earn enough by working. It is not a savings or investment plan. It never was. And it has worked perfectly. The baby boom generation generated so much for the plan that it ran a surplus for decades (which was spent, replaced by special bonds called the Social Security Trust Fund).

Medicare, on the other hand, is a tax-supported arrangement but costs to the system are not determined by any formula. Costs are set by a vast and growing disease-management industrial complex consisting of drug companies, clinics, hospitals and individual physicians, most of which are laced together by an array of for-profit insurance arrangements, either supplemental to Medicare (the "alphabet plans") or altogether separate (Medicare Advantage and others).

Part of the reason a single-payer system is not a perfect remedy to health care costs is that how the bills are paid is not as significant as the amounts being billed.  If costs were actually costs, it would be simple. But the word cost is really a jackpot term into which every piece of arithmetic is tossed, from laundering hospital bedsheets to marketing expenses for selling erectile dysfunction medications during prime time on TV and everything in between.

The Social Security adjunct to Medicare, the social safety net as it were, is Medicaid.  Like Social Security it is a tax-supported program, but the taxes are a combination of federal and state taxes, with the administration of Medicaid done by individual states in accordance with federal guidelines. Simply put, Medicaid is Medical Welfare, a program like food stamps or TANF (Temporary Assistance for Needy Families) which pays medical expenses for those too poor to pay for themselves.

This is what the costs of retirement and medical care look like on paper:

Medicaid = Social Security
Medicare = Individual Retirement Arrangements

Medicare, unfortunately, has been sold to seniors as the ultimate safety net in their declining years. Reality is that Medicaid, not Medicare, is that safety net. Unless and until this reality is better understood, future discussions of health care reform will continue to be confusing and inflammatory.

The word "entitlement" is equally misleading and confusing. Strictly speaking the word is a synonym for "right" We are entitled to a social safety net in the same way we are entitled to free speech or any other right. Unfortunately we are not entitled to a blank check when the amounts charged are swollen by other expenses beyond those of furnishing actual health care.

Entitlements, then, are what we must have, not what we (or insurers, drug companies and providers) WANT to have.
As citizens we are entitled to something in the way of financial security so we are not utterly destitute. Many depend on a meager Social Security income alone, and have no other means of financial support. In the same way, Medicaid is the only medical support system for poor people. Without that safety net many would (and actually do) simply get sick and die. If it isn't approved by Medicaid, they simply do without. 

To speak of Medicare and Social Security in the same breath as "entitlements" is a mean and cruel deception.
Social Security IS an entitlement and entitlement but Medicare IS NOT an entitlement.

The medical care entitlement is MEDICAID, not MEDICARE.  But some irrational part of our brain tells us that because we pay taxes, everything that comes from governemnt should come at no charge.

~~~~~~~~~~~~~~~~~~~~~~~~~~~

Getting back to Medicare, I doubt the distinction I just made will make it into the popular narrative, but pretending that it might I will proceed.

Alice Rivlin of the Catfood Commission has had her name used in vain by those selling the Ryan/GOP Destroy Medicare Plan  The plan was first advertised as having her endorsement, but it didn't takle long for her to correct that misinformation. .

Ezra [Klein]... posted a full interview with Rivlin, in which she not only reiterates her rejection of the new Ryan plan but explains why she supports, as an alternative on health care, the Affordable Care Act:

An Op-ed in the LA Times yesterday addressed the Ryan Plan in critical terms.

Forty-six years ago, President Johnson signed the bill that expanded the Social Security system to include Medicare and Medicaid. Those two programs were the jewels of an avalanche of social legislation that built on the legacy of the New Deal and that found inspiration in an unlikely place � a book, published in 1962, called "The Other America" by the writer and public intellectual Michael Harrington.

The book explored the poverty that then afflicted nearly one American in three and, like Upton Sinclair's "The Jungle," it changed the political landscape.

Among the millions who read it and embraced its message was the president, John F. Kennedy. Johnson subsequently tackled the issue with all his consummate legislative skill. Harrington would come to feel that Medicare and Medicaid were the most lasting achievements of LBJ's epochal presidency, because � along with other changes in Social Security � they reduced old-age poverty to statistical insignificance, extending not just the lives of millions of our elderly, but also the vitality of their old age.

Harrington said that when he began his research into poverty in the late 1950s, "for most Americans to be old was to be poor."

And those who were poor and old, as he wrote in "The Other America," were likely to suffer: "The aged members of the other America are often sick, and they cannot move. Another group of them live out their lives in loneliness and frustration: They sit in rented rooms, or else they stay close to a house in a neighborhood that has completely changed from the old days. Indeed, one of the worst aspects of poverty among the aged is that these people are out of sight and out of mind, and alone."

Harrington's biographer, Maurice Isserman, wrote in 2008 that "what remains fresh and vital in 'The Other America' is its moral clarity." That quality is precisely what the debate over Medicare and Medicaid cannot be without.

This illustrates perfectly how easily Medicare and Medicaid are tossed together as two parts of one program, almost like we have two arms or legs, left and right. It's an understandable confusion, because most people also conflate Social Security (a SOCIAL program) with IRA's, 401-Ks and the like (INDIVIDUAL programs, adjuncts to Social Security). In fact, by using the phrase "expanded the Social Security system to include..." the writer deepens the confusion even further by suggesting that they are all part of one big package.

In order for this debate to proceed the word entitlement must be either tossed out or more clearly defined, along with all mention of Social Security and Medicare in the same breath.

From here, readers are urged to examine Ryan's plan to replace Medicare with private insurance while gutting Medicaid in the process. It is a very cold-blooded plan I suspect will be dead o arrival, but at least it has opened a long-delayed discussion at the Congressional level. Maggie Mahar's Alice Rivlin post  is a good place to start.

I'm no big fan of ad hominem attacks, but in this case I'm making an exception. Matt Taibi's description of Ryan and his plan is too good to miss.

Paul Ryan, the Republican Party�s latest entrant in the seemingly endless series of young, prickish, over-coiffed, anal-retentive deficit Robespierres they�ve sent to the political center stage in the last decade or so, has come out with his new budget plan. All of these smug little jerks look alike to me � from Ralph Reed to Eric Cantor to Jeb Hensarling to Rand Paul and now to Ryan, they all look like overgrown kids who got nipple-twisted in the halls in high school, worked as Applebee�s shift managers in college, and are now taking revenge on the world as grownups by defunding hospice care and student loans and Sesame Street. They all look like they sleep with their ties on, and keep their feet in dress socks when doing their bi-monthly duty with their wives.

Every few years or so, the Republicans trot out one of these little whippersnappers, who offer proposals to hack away at the federal budget. Each successive whippersnapper inevitably tries, rhetorically, to out-mean the previous one, and their proposals are inevitably couched as the boldest and most ambitious deficit-reduction plans ever seen. Each time, we are told that these plans mark the end of the budgetary reign of terror long ago imposed by the entitlement system begun by FDR and furthered by LBJ.