The Ryan Medicare Plan: Still On the Table?

Asked if Republicans running for the Senate in 2012 should support the Ryan budget and its overhaul of Medicare, House majority leader Eric Cantor said, “Yes”, they should.

Both Tim Pawlenty and Jon Huntsman have said they would vote for a bill that kills Medicare.

And in the Senate, Republican leader Mitch McConnell says the GOP will refuse to lift the debt ceiling unless President Obama and the Democrats agree to Ryan Medicare.

The President went golfing with John Boehner and Joe Biden is negotiating with Congress, but Biden says the "really hard stuff" still remains. Asked by Jim Lehrer on the News Hour if it would probably be resolved in "one of these midnight deals", David Brooks answered,

""I think it's going to go past midnight..I'm very pessimistic about it. I think Wall Street is vastly underpricing the possibility. ".

The nation’s debt must be cut; it is frighteningly high. But the debt ceiling relates to current obligations to which the nation is already committed. A U.S. default in a world where the dollar is the universal trading currency would cause turmoil and possibly catastrophic collapse. How could the Ryan plan be worth that?

So what’s going on here? Have Republicans already forgotten the acrimonious town hall confrontations when they went home to their districts this spring and faced the wrath of the public? And the portent of the Democrat win in an upstate New York by-election reversing a vote that was 74% Republican last fall?

In the most recent poll by CNN/Opinion Research Corporation, 58% percent of Americans said they are against Ryan's proposal. Not an overwhelming majority except only 35% say they support the plan. Most interesting: today’s senior citizens, who would be unaffected by the plan, were the most disapproving — 74% against.They know best the benefits the plan confers and perhaps they are concerned for their under-55-year-old sons and daughters. Other polls — here’s a quick summary — say much the same.

Disbelief that McConnell and Cantor would actually take the country to the brink, as well as stir a voter rebellion, says that they are merely using Medicare as a bargaining chip to force other cuts on the administration. But how are they going to back away from these unyielding stands when the time comes without appearing to the Tea Party element to have caved in?

For their part, Democrats are making statements that, while they may apply only to the immediate vote on the debt ceiling, irresponsibly lead the public to believe that they will never change Medicare and have no plan. "I could never support any arrangement that reduce benefits for Medicare...that's a nonstarter”, says Nancy Pelosi.

Medicare cannot survive in its current state. A recent estimate said insolvency will occur in 2024 — 5 years sooner than expected — done in by a combination of lower payroll tax collection brought about by unemployment and by ever-steeper rises in health care costs.

But rather than any attempt to repair Medicare, Wisconsin Congressman Paul Ryan went to the opposite extreme. His transparent agenda is to remove this social program from government and hand it in its entirety as a huge bonanza to overjoyed private insurance companies. Donations from them will pour into Republican coffers.

His plan makes no attempt to reduce medical costs. The government would be reduced to simply collecting the payroll tax and forwarding it to the insurers. And from a system that is remarkably efficient, with Medicare administrative overhead measured at 4% or so, the transfer to private companies adds a layer of cost having nothing to do with health care. The premiums seniors will pay will be fattened by the higher administrative costs of the supposedly efficient private sector, the huge paychecks and perqs of management, advertising and marketing that do not exist with Medicare, and atop all that — profit.

Beyond that, as has been reported elsewhere, seniors would have to pay an average of $6,000 a year out of their own pockets — the estimate by which the cost of policies would exceed the “premium support” paid by Medicare.

The argument in favor says that the commercial world, driven by that same profit motive and by competition among themselves for customers, will force medical costs down. How then to explain why for non-seniors that same private sector has seen health insurance costs soar over the last two decades well beyond other inflation? In fact, as these charts show, private insurance costs per beneficiary have risen 40% higher than Medicare costs since the program’s inception in the 1960s.

Meanwhile, Democrats have irresponsibly proposed nothing to save Medicare. Pointing only to the untested trickle of cost cutting experiments in so-called Obamacare is simply the politics of hope. Aware of the backlash against the Ryan plan, it appears that the president intends to say nothing that would roil the electorate before the 2012 election — in other words, we drift for another year and a half as the noise of the falls grows louder and the precipice draws nearer.