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Ryan’s Missed Opportunity


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National Review:

Early this month, it was reported that President Obama and Rep. Paul Ryan (R., Wis.) exchanged harsh words during a meeting. Mr. Ryan criticized Democrats for describing his Medicare reforms as a “voucher plan,” which he insists isn’t the case. And while Mr. Ryan’s proposal is a good starting point for a debate on Medicare reform, that clarification reveals one of its flaws — Ryancare doesn’t allow recipients to buy their own care directly, but it should. Otherwise, it misses an important opportunity to improve health outcomes and generate real savings.

Mr. Ryan serves as chairman of the House Budget Committee. With the U.S. debt at $14 trillion and growing, Ryancare seeks to contain future deficit spending by holding increases in per-patient Medicare costs to inflation — but only after Jan. 1, 2022, and only for those who don’t become eligible for Medicare until after that date. By some standards, it’s not even a cut to Medicare; it’s merely a limit on future increases. Democrats are attacking the plan, however, as the total destruction of the program.

Democrats have one good line of attack: If future Medicare spending increases are limited to the inflation rate, future recipients could be on the hook if health-care costs rise by more than that. Remember that Medicare costs have grown faster than inflation by at least a few percentage points throughout its history. So unless America gets healthier in the next decade, builds a more competitive health-insurance market, or both, Ryancare recipients should expect the value of their health-insurance premium support to fall short by an additional 2 to 3 percent every year (give or take). For millions of future elderly Americans, in other words, Ryancare could mean huge health-care expenses out of their own pockets.
And that’s where the missed opportunity lies.snip
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