The Romney-Ryan Medicare Plan

What is it, exactly, and how does it work?  The plan is a means of restoring responsibility for health insurance spending to the individuals seeking the coverage—which also removes that (usurped) responsibility from the Federal government.  The Wall Street Journal provided a summary earlier this week of how this gets accomplished.

  • Private insurers, and Traditional Medicare, would bid for the business of each individual senior citizen (oh, the ignominy: Big Government having to mingle with—to compete with—the hoi polloi) in a region for the year.
  • Each senior citizen would receive from the government a payment equal to the second-lowest bid in that region.
  • Each senior citizen then would spend that payment on the health coverage of that person’s choice.
    • If the senior citizen chose the cheapest policy, he would pocket the difference.
    • If the senior citizen chose the second cheapest, he would break even.
    • If the senior citizen chose a more expensive policy, he would pay the increment out of his own resources.

Hmm….  Choice—what’s up with that?  Can we trust our senior citizens to behave responsibly?  Even push actual competition among the vendors?  Some plainly say, “No!  We do not trust these people.”  It’s why they oppose the plan.

As the WSJ also points out, there’s real world, empirical evidence that base competition works: it has…in Medicare Advantage.  This program already requires vendors to bid against Traditional Medicare.  As recently as 2009, the year for which data are readily available, the lowest and second lowest bids—for the same coverage—were, respectively, 87% and 91% of the government’s Medicare charge.

Where, then, are the extra $6,400 that our seniors are supposed to be socked with paying under the Romney-Ryan plan about which Democratic Presidential Candidate Barack Obama is on about so much?  He and his are using an obsolete CBO report about an obsolete Ryan proposal that doesn’t exist today and that has nothing to do with the Romney-Ryan plan.  Moreover, CBO conceded at the time that its analysis was suspect because it did not consider the effects of competition: their results

depend on the evolution of the health care and health insurance systems over time, which is hard to predict.

More damning—to the CBO analysis here and to its analyses generally—CBO has admitted its inability to score the Romney-Ryan Medicare plan because it

does not have the capability at this time to estimate such effects[.]

There goes Obama, again—stuck in a past that never existed.  And trying to change the subject again.

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