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Paul Ryan on Medicare and the GOP: No Hypocrisy Here

There are big differences between Ryan's free market plan and Obamacare's command and control rationing system.

10:30 AM, Feb 15, 2010 • By JOHN MCCORMACK
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Liberal New York Times columnist Paul Krugman wrote on Friday that Republicans are a bunch of hypocrites because they criticized the $500 billion in Medicare cuts (it's actually $800 billion over 10 years) in the Democrats' health care legislation, but Republican Paul Ryan of Wisconsin has proposed a long-term budget "Roadmap" that would, as Krugman contends, "dismantle the whole [Medicare] program." (Apparently Krugman didn't have enough room in his column to point out that Democrats might be hypocrites for denouncing Medicare cuts under Clinton, then proposing Medicare cuts in Obamacare, then denouncing Paul Ryan's reform as "abolishing" Medicare--while simultaneously pushing to pass Obamacare's Medicare cuts through reconciliation. But I digress.)

Some conservative commentators have joined Krugman in criticizing Republicans for resorting to supposedly cynical and hypocritical 'Mediscare' tactics to defeat Obamacare. But Paul Ryan says that he doesn't think Republicans have been hypocritical, because there are very big differences between his Medicare reform plan and Obamacare's Medicare cuts. For starters:

1. Ryan's plan would not cut Medicare benefits* for anyone 55 or older, while Obamacare would reduce access to care or diminish the quality of care for current beneficiaries. “You do not have to take benefits away from current seniors," Ryan told me Friday afternoon. "You have to reform the program for future generations. ... The cost explosion occurs when you go from 40 million to 80 million retirees, so you have to reform the program before it becomes 80 million retirees."

2. Ryan's plan would eventually eliminate the deficit and the debt by making Medicare (and other programs) solvent, while the Democrats are, Ryan says, "cutting the program so they can get money to create a new one, which is a fiscal nightmare on top of a fiscal nightmare."

3. Ryan's plan reduces the growth of federal Medicare spending by moving toward a free-market system in which those 55 and younger would get a voucher (on average $11,000 per household) to purchase their own health insurance when they qualify for Medicare. Obamacare wouldn't make Medicare solvent, but it attempts to restrain Medicare spending, Ryan says, through a "comparative effectiveness bureaucracy" and its "IMAB [Independent Medicare Advisory Board] on steroids--new Medicare bureaucracy that will put in all these formula changes bypassing Congress." Ryan calls this a "rationing system."

"The current path is not going to happen, it's not sustainable," Ryan says. "You literally cannot tax your way out of this. ... Medicare itself overcomes the entire size of government."

"So you either put the government more firmly in control the system and make it a government monopoly program--kill Medicare Advantage, kill HSAs,” and "deeply and systematically ration health care," or you can "break up the government monopoly, and bring in the power of the free markets."

"I would simply argue that the history of free market systems shows you more goods and services at lower prices, than closed centrally planned systems, which show you scarcity, rationing, and less innovation," says Ryan.

So, as a 40 year-old, Ryan says, "I am looking at a choice of two futures: Do I have a future of more control of my health care in a market system that’s competing for my business, for my needs, where I can customize my care, and I get support from the government on purchasing that health care, and a safety net so that poor and sick people get total support? Or do I go to a system where the government literally determines what kind of care I get, when I get it, if I get it?"

"Those are the choices we’ve got right now before us, and that’s the dirty little secret behind Obamacare."

Krugman might scoff at Ryan's belief that his plan is "attacking the root cause of health care cost inflation itself by bringing market principles into the system where they do not exist now: transparency in price, transparency in quality, economic incentives, and have the health care providers compete against each other for people’s business." But Ryan makes a fairly simple and persuasive case about fiscal responsibility and the superiority of the free-market to central planning. And the American people have often had an easier time of understanding capitalism than some Nobel laureates.

*Krugman writes that Ryan's

plan "strengthens the current program with changes such as income-relating drug benefit premiums to ensure long-term sustainability."

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