Why Ryan-Rivlin Would Work (and Obamacare Won’t)
3:55 PM, Feb 10, 2011 • By JEFFREY H. ANDERSON
At National Review, Jim Capretta explains why the Ryan-Rivlin plan would reform entitlements and bend the health care cost-curve down, while Obamacare would do neither. Actually, Obamacare would do far worse than "neither." It would add an unsustainable new entitlement while also bending the nationwide cost-curve up.
The Ryan-Rivlin plan has been advanced by Rep. Paul Ryan (R., Wis.), the articulate and likable House Budget Committee chairman who consistently manages to sell conservative principles to a congressional district that looks a lot like a microcosm of the United States (the district voted for President Obama), and Alice Rivlin, director of the Congressional Budget Office (CBO) during parts of the Ford, Carter, and Reagan presidencies and director of the Office of Management and Budget under President Clinton. Unlike Obamacare, Ryan-Rivlin represents a bipartisan approach, advanced by two fiscal conservatives.
Why would it work, while Obamacare wouldn't work at all? Capretta writes,
Under Ryan-Rivlin, once people currently under the age of 55 enroll in Medicare, they would receive a voucher (based on current average per-person Medicare expenses and adjusted based on income, geography, and health risks) for use in purchasing private health insurance of their choosing. The amount of the voucher would increase each year, by more than inflation. The plan would protect Medicare beneficiaries (including those enrolled in the current program or slated to enroll within the next decade) by capping their annual out-of-pocket expenses at $6,000, starting in 2013. The poor would receive $6,000 in taxpayer subsidies to put into a Health Savings Account (plus an extra $600).
Using its mid-range estimates, the CBO says that, by 2030, Ryan-Rivlin would reduce annual federal health care spending by an estimated 1 percent of the gross domestic product (GDP). Based on the average rate of GDP growth across the past quarter-century, that would mean a savings, by that date, of about $4 trillion annually -- more than the entire current federal budget (which, of course, would be higher then as well). In addition, the plan would almost certainly lower overall nationwide health costs (the CBO doesn't score for this), not merely federal ones.
If someone were to make such a serious and sensible proposal a centerpiece of his presidential campaign, where he'd really have the opportunity to sell it, it could be a winning political message well suited to achieving historic ends. It could enable our country to finally turn the corner toward financial solvency, while also going a long way toward restoring the Founders' vision of liberty and opportunity. Moreover, it would be a lot harder to achieve these crucial ends after 2014, at which time Obamacare is slated to go fully into effect -- if someone doesn't step up and defeat President Obama first.