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Paul Ryan: A ‘Time for Choosing’ on Health Care

Who is in charge: the government or the patient?

9:22 PM, Sep 27, 2011 • By JEFFREY H. ANDERSON
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A “defined contribution” doesn’t mean that Medicare beneficiaries would receive only a given allotment of care — nor that once a certain amount of money has been spent on their care, that’s it. Rather, they’d get a certain amount of money with which to purchase private insurance, choosing from a list of competing insurers (rather than dealing with insurers directly). Under such a “premium support” model, seniors would get generous taxpayer support toward their insurance premiums — and far more if they are ill or poor — and they would get to pick the plan that best suits them. By increasing competition and choice — and providing incentives to offer, and to shop for, value — such a plan would lower costs without sacrificing quality. 

Ryan quoted the Medicare chief actuary, who said in congressional testimony, “We’ve estimated for many years that competition among plans in a premium-support setting like this…can get you to the lowest cost consistent with good quality of care.”

As for Medicaid, Ryan said he would block-grant federal funding to the states.  As for the overall health care market, he said that “patient-centered reform means replacing the inefficient tax treatment of employer-provided health care with a portable, refundable tax credit that you can take with you from job to job, allowing you to hang onto your insurance even during those tough times when a job might be hard to find.

Ryan concluded his speech by calling on Republicans to “combine political courage and clarity of purpose with faith in the American people.” He encouraged the GOP not to fear “false attacks”—“Fear and demagoguery are the last refuges of an intellectually bankrupt party.” 

He summarized his proposals: “The three reforms I’ve just outlined — premium support for Medicare, block grants for Medicaid, and tax reform to correct the inefficient tax treatment of health insurance — must be present in our ‘replace’ agenda.” He added, “If we end up with a replace agenda that fails to fix the problem, then we will lose hard-won credibility on the health care issue as a result.”

Ryan emphasized, “The first step toward true, patient-centered health care reform must be a full repeal of the president’s disastrous new law.” But Republicans must also offer a workable replacement. “What will work,” Ryan said, “is empowered consumers looking for value. Giving patients and consumers control over health care resources would make all Americans less dependent on big business and big government for our health security…give us more control over the care we get…and force health care providers to compete for our business.” 

Increasing competition and choice, lowering costs, and making people less dependent not only on big government but also on big business — that sounds like a winning message for the GOP in 2012.

Now, who will deliver it?   

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