Jonathan Cohn/ April 6, 2011
The 'No We Can't' Budget
Remember when Barack Obama ran for president and the theme was "Yes we can"? Well, Paul Ryan's budget has its own theme: "No We Can't."
If you can get past the fuzzy math and sheer indifference to the poor, it's possible to discern a coherent conceit in the Ryan plan: that the burden of maintaining a modern welfare state has become too great to bear. You can see this most clearly in Ryan's proposals to transform health care, which is both the primary source of our fiscal crisis and the primary vehicle for Ryan's government downsizing.
Everybody agrees that the combined costs of three health care initiatives--Medicare, Medicaid, and the Affordable Care Act--are together creating a long-term financial responsibility our society is not prepared to meet. But Ryan's proposed solution to this problem is to give up on the programs, replacing them with less ambitious alternatives or nothing at all.
He would do this most explicitly for the Affordable Care Act, whose coverage expansions he recommends repealing entirely. Not only would that take insurance away from more than 30 million Americans now expected to get it. It would also take away a guarantee, which virtually every developed country makes to its citizens, that that anybody can obtain affordable insurance regardless of income, job status, or pre-existing condition.
Ryan doesn't call for repealing Medicaid per se. But he does call for ending its entitlement status. Under its current structure, enrollment expands to meet demand for it, no matter how big that demand gets. Ryan wants to convert the program to a system of block grants to the states, using a formula that would increase funding only as fast as non-medical inflation.
That's virtually certain to create a situation in which the program cannot provide for the people it does now, as the Congressional Budget Office concluded in its assessment:
Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts. States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.
And then there is Medicare. Instead of providing every senior with an insurance policy, the government would, under Ryan's plan, offer every senior with a fixed contribution towards the cost of a private insurance policy. That contribution, which most of us would call a "voucher," also wouldn't t grow as quickly as the cost of health care, even under favorable scenarios.
Again, from the CBO:
Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.
The ostensible rationale for these changes is that keeping today's promises won't be possible when tomorrow comes. And, to be fair, no sensible person thinks we can keep government health care programs going without some changes. But it takes only a little policy creativity to see alternatives--like reorganizing medicine itself, focusing more on effective treatments and collaborative medicine, in order to get better care for less money; or ending the Bush tax cuts, which alone could close most of the short-term fiscal gap, and then finding some new revenue.
These are not the kinds of solutions that conservatives like, I realize. They think the former means too much government and the latter means too much redistribution of income. But given the choices, how many Americans would agree?
Politics, Barack Obama, Medicare, Paul Ryan, Jonathan Cohn, Care Act