Tuesday, April 05, 2011

IQ Test:

The Republicans have proposed a plan to essentially eliminate Medicare and Medicaid. The plan is to allow older people to keep Medicare but give younger people only inadequate vouchers to purchase private insurance. There is a Machiavellian point to this bit of chicanery. Krugman:


The 2022 Medicare Crisis
Matt Yglesias has a very good point: the supposed transition strategy under the Ryan plan, in which everyone currently over 55 gets Medicare as we know it, while everyone younger than that gets vouchers that won’t be enough to buy adequate insurance, sets up an unstable political dynamic. In fact, we can be sure that whatever happens, it won’t be what the plan says will happen.

If the Medicare Advantage precedent holds, what will happen in 2022 or a bit later is that Congress will react to the fury of younger seniors — who see that those born just a few years earlier have vastly better benefits than they do — by increasing the vouchers. And the end result, in that case, would be that the Ryan plan substantially increases Medicare costs; remember that the payment increases that were part of the 2003 Medicare bill, introduced to rescue failing Medicare Advantage programs, have resulted in large overpayments, adding hundreds of billions to the program’s costs.

Alternatively, if the benefit cuts stick, you’ll have a lot of furious people realizing that they are paying high taxes to support lavish medical care for older Baby Boomers, while being themselves condemned to pleading with insurance companies to provide coverage in return for an inadequate voucher. Plus, private insurance companies, making lots of money off the voucher business, will cast their eyes on those potential profit centers, aka seniors, still getting government insurance. So traditional Medicare will be in the firing line — and all those assurances about how nobody currently over 55 will be hurt will turn out to be empty.

The only questions are whether Americans are dumb enough to fall for it and whether Obama can rouse himself from his long slumber long enough to fight back. Early indications are not promising.