Medicare reform and the ACA are linked, ctd.

As I wrote in December, the key to evaluating the merits of Wyden-Ryan or any other premium support-based reform of Medicare is what will be done about the Affordable Care Act (more here and here). I meant this largely in a political economy sense–the entire health system needs reforming, and a key issue is what we will do (or won’t do) to expand insurance coverage to the uninsured and move to improve care throughout the system. Medicare and the care of younger persons are linked because they receive care from the same general health care system, but also because it is young workers (many of whom are uninsured) who pay payroll taxes to support the Medicare program. I have never gotten why this seems like a disconnect to some, or that reductions in spending on Medicare would be inappropriate to use to finance coverage expansions for younger persons (the children and grand children of Medicare beneficiaries!).

Austin Frakt has a nice post looking more technically at the issue of the linkage between the ACA and Wyden-Ryan; specifically, how increased cost savings achieved by the ACA enables a premium support approach such as Wyden-Ryan to achieve the maximal savings possible in the Medicare program. Thus, whether they realize it or not, proponents of premium support in Medicare need for the ACA succeed. Of course, there could be replacement of the ACA that could similarly succeed, but there is no evidence that such a plan will come about.

Key to Wyden/Ryan is the ACA

The Wyden/Ryan compromise Medicare reform was announced yesterday. Austin looked at the policy and politics; his series on premium support is required reading. Aaron also had several good posts up right away.

In policy terms, something like this proposal will likely be adopted one day in Medicare, for both political and policy reasons. I used to call for an end to private insurance options in Medicare. However, having no private insurance option in Medicare is a fantasy of the left, just as having no public option (traditional Medicare) is a fantasy of the right. Given that there will likely be some sort of private insurance option in Medicare along with a public one, I think that some version of premium support based on competitive bidding could be better than our current Medicare Advantage program. And we must do something. The Wyden/Ryan plan continues that part of the conversation.

It is true that Rep. Ryan moved to the center from his initial Medicare proposal, but that only means he moved away from his fantasy with respect to Medicare, as have I. However, I am unable to give a final grade to the Wyden/Ryan proposal without knowing what we will do to expand coverage (or not) for people under the age of 65, while seeking to slow costs and improve quality. If Wyden/Ryan were a part of a deal that also adopted a compromise to modify and implement the ACA, then maybe (but more details are needed).

In fairness to Rep. Ryan, he has a replace plan for the under 65 set, the Patients’ Choice Act, introduced before any House committee passed any version of the ACA in 2009, and which he recently re-embraced. I have blogged quite a lot about this bill and as always, the details are important. I see a great more policy overlap between the PCA and the ACA than Rep. Ryan’s rhetoric suggests. However, the big picture is more telling on replace than are the details of any one proposal: no House committee has marked up any sort of comprehensive replace bill  since the Republicans took control of that body. Nothing. It is very easy to say what you are against, but hard to get 218 votes in the House, 60 in the Senate and 1 in the White House.

Both political parties claim to be interested in a long range sustainable budget. To achieve this will require a health reform plan. The Democratic party passed one, and the ACA was what could pass. It can and needs to be reformed and changed; we will never be done with health reform, and the ACA gives us a place to start. The Republicans need a deal on health reform in the long-run-achieve-a-sustainable-budget-sense more so than do the Democrats; there is no example of the Republican party using political capital to drive any sort of comprehensive health reform, ever. Without a health reform plan, there will never be another balanced budget, or anything close.

Wyden/Ryan is only a placeholder unless there is to be a fuller discussion about health care reform. Senator Wyden said the key to his relationship with Rep. Ryan was not discussing the ACA. That conversation has to be had, in the Supreme Court and beyond.

DT