With Romney’s pick of fiscal straight-talker Paul Ryan as his running mate he’s ensured that the debate which will dominate the rest of campaign season will be entitlements. Specifically Medicare, for which Rep. Ryan has proposed some controversial reforms.
According to Democrats and their surrogates, Ryan’s plan would be a bad deal for seniors. According to the more rabid of commentators, Ryan’s plan would push senior citizens off a cliff. But in reality, what Ryan has proposed is giving seniors the choice of a better deal.
Currently seniors are locked into a one-size-fits-all Medicare program where the government shapes benefits for everyone. The government rations care. The government controls prices, forcing doctors to accept prices that often have them providing services at a loss to Medicare patients. The government prohibits patients and doctors coming to an arrangement to supplement the Medicare payment with additional revenues.
Put simply, Medicare isn’t unlike a defined benefits pension package, with beneficiaries being guaranteed (for as long as the nation’s tax revenues and debt capacity can sustain it) a certain level of benefits, but being prohibited from accessing anything beyond that. Much like Social Security, which limits how much income beneficiaries can have, Medicare limits how much health care a patient can purchase.
What Ryan’s plan would do is allow senior citizens the option of shifting to a defined contribution plan. If Ryan’s plan passed, those 55 and younger could choose to collect their Medicare benefits in the form of vouchers that would leave them free to make their own health care choices rather than be locked in to government-defined benefits. It would allow them to go above and beyond the scope of their current benefits. It would put the patient, and not Medicare bureaucrats, in the driver’s seat for health care.
That’s exactly the sort of health care reform we need. There is no doubt that Medicare spending must be rationed, because the biggest threat to Medicare as we know it is Medicare as we know it. It is on a fiscally unsustainable path. So the question is, who gets to make those decisions? Should the government begin rationing care under Medicare? Or should we leave that choice up to the individual Medicare beneficiaries?
Rep. Paul Ryan’s plan represents the latter option. Democrats want the former.