An editorial in today's WSJ called Medicare for a New Century (free to all) contains more key aspects of the Ryan plan which will come in handy in coming days to help rebut the Democrats demagoguery against the plan:
Under the Ryan premium support model, seniors would instead choose from a menu of guaranteed private insurance options of the kind younger, private-sector workers have come to expect. These plans would be subsidized by a "defined contribution," roughly equal to what the government now spends per person. This subsidy, about $15,000, would grow over time with consumer prices, but seniors who wanted more expensive plans would pay the difference out of pocket.
So Medicare is not “going away” as some Democrats have claimed. It won’t be the same Medicare we have today because they program is quite simple unsustainable. The only way to save Medicare is to change Medicare and there is reason to believe that the changes that Ryan proposes will not only help curb Medicare spending but also lower health care costs overall.
Premium support would create a market reward for the services that consumers value. Because seniors would be chipping in at the margin, only above the fixed-dollar subsidy, most would favor lower premiums. Insurers would compete to supply them, and providers in turn would have a reason to innovate in health-care delivery and improve what has been their negative productivity rate.
Premium support would not cure all of America's health ailments, and missing in action in the House budget is a comparable reform for the rest of the market. But Medicare is so big that if it doesn't change, nothing else can. Simply unwinding Medicare's price controls would be an historic achievement.
That said, Granny will not be turned loose unsupervised into the market wilds. The subsidies will flow through Medicare, only to regulated insurers and government-approved plans. It does not go as far as Mr. Ryan's previous "roadmap," which offered direct cash vouchers for individuals who preferred to buy insurance themselves. The subsidies are means-tested, so the poor would receive more support, as will sicker and chronically ill patients. They wouldn't kick in until 2022, more than enough time for people to adapt and exempting everyone older than 55 if they wished.
So these changes won’t disproportionately impact the poor and sick. And again, they won’t impact seniors already in Medicare nor those who will retire shortly. These facts and others covering various aspects of Ryan’s plan cannot be repeated enough.
