The Medicare Debate

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National Review:

There are many reasons to be grateful for the introduction of the Medicare “premium support” plan by Democratic senator Ron Wyden and Republican House Budget Committee chairman Paul Ryan.

In some respects, it represents an improvement over the design of previous versions of premium support. Whereas the original Ryan plan offered seniors a subsidy based on a predetermined formula, the Wyden-Ryan plan relies on competitive bidding for setting the government’s contribution rate. Competitive bidding has the potential to cut costs even more than a predetermined index, because an index tends to lock in today’s wasteful spending. Of course, Wyden-Ryan also very usefully shook up the political debate over premium support, making it much more difficult for Democrats to demonize the concept.


But perhaps the most useful byproduct of the Wyden-Ryan plan has been the clarifying effect it has had on the debate over how to slow the rise of health-care costs.
For some time, it has been easy to get confused over where Obamacare’s apologists actually stand on that question. When it has been useful for them, Obamacare’s apologists have sometimes left the impression that they aren’t averse to competition and choice in health care, and they have pointed to the state-based “exchanges” in Obamacare as evidence of their open-mindedness to a form of competition for the under-65 population. But at other times, their distrust of competition has been on display: They have signaled on numerous occasions that they plan to use the exchanges for regulatory control, not competition. For instance, they have threatened to bar some insurers from participating in the exchanges based on any number of subjective judgments from federal and state regulators.