Saving Medicare From "Private-izing" Ryan.

As this was being written, House Republicans passed the Ryan Budget, Medicare scam and all.

Here are some of the false and misleading claims in Ryan's Medicare Scheme:
1. It will save money for the government and for individuals.
2. Private insurance will provide coverage to all the elderly at reasonable prices.
3. It is the same plan members of Congress have, and it works for them.
4. If the plan is so great, why wait 10 years before imposing it?
5. The plan is good for young people.

False Claim #1. It will save money. "Private-izing" Ryan would have us believe that, because the government does not have the money to pay all future Medicare costs if healthcare costs keep rising at current rates, switching to private insurance will somehow pay for all needed healthcare. [Dirty little secret: the insurance companies do not have the money either].

But, unlike, say, Stealth Fighters that one can either build (spend money) or not (save money), people will become ill, at no greater or lesser a rate regardless of the system (assuming no prevention that the president has in the Affordable Care Act that Ryan would repeal). Thus, unless "private-izing" Ryan's stealth goal is to deliver less total healthcare (does one hear rationing?), shifting payments from taxes to private insurance premiums will not reduce total costs. If anything, as indicated in #2 below, total costs, and costs to all individuals, will rise. Whether one has a premium payment deducted monthly from one's bank account or as taxes from salary, the net free cash one has is the same (or, more likely, considerably less after premium payments).

Ryan's plan reduces over time the percentage of premium costs the vouchers pay. The individual pays the increasing difference between the voucher and the premium. The total is the same. [If "C" is the total premium cost, "A" the amount paid by the voucher, and "B" the amount paid by the individual, then A+B = C. As "C" rises with the increase in healthcare costs, and "A" rises by a lesser rate, "B" increases to make up the difference. Ryan has no mechanism to control "C" and deliberately holds down "A"; indeed, by repealing the Affordable Health Care Act that does have some mechanisms to control "C", the percent of our total national expenditure spent on healthcare rises without providing any better outcomes.

Savings from "private-izing" Ryan's plan do not exist.

With the pending retirement of 78 million baby-boomers, health care costs for the elderly as a percent of GDP will continue to rise no matter what is done, because more people will require health care. As the president reminded us, the choice made by the disastrous Bush administration to beggar the nation with tax cuts for the wealthy, as that retirement wave was soon to begin, was crazy and cruel. [Lesson: It matters if major policies are based on lies or lunacy].

In this decade and beyond, we will be paying for Bush's catastrophic policies, also based on false and misleading claims, and with Ryan as a willing accomplice. But, we should not be following Bush's accomplice into further folly, especially based upon further false and misleading claims.

False Claim #2. Private insurance will provide coverage to all the elderly at reasonable rates. "Private-izing" Ryan's plan to throw the elderly into the private insurance market with vouchers of declining value over time compared to premium costs assumes that there are insurance companies that will cover elderly patients who often have more than one chronic disease. Or, if the president's Affordable Health Care Act magically survived Ryan's axe and insurance companies could not deny coverage based on pre-existing illnesses, premiums for the elderly would either be stratospheric or, if age discrimination were also disallowed, the premium costs of everyone would skyrocket.

Today, Medicare covers ~98% of senior citizens. Among people under 65, private insurance today does not cover about 47 million people. That was one of the key reasons to enact the Affordable Care Act whose coverage provisions will be triggered in 2014 and still will only cover 30 of those 47 million.

What, then, is Ryan's basis for suggesting that all seniors will get insurance coverage from the same private market that today does not, and even with reforms, will not, cover all those under 65?

And, because there would be substantial doubt that one's parents will even receive coverage from private insurers, young couples will be faced with the same choices as they were pre-Medicare -- prepare for the crushing financial burden of paying for your parents' healthcare. Savings, what savings, Mr Ryan?

Imagine, moreover, the attraction to scam artists of people in their declining years having to select among a variety of plans -- assuming, of course, that any such plans were available in the first place, and assuming that millions of senior citizens will pour over competing plans and be able to choose the one best suited to themselves. Perhaps, Ryan would like to buy the bridge I am selling....

False Claim #3. Seniors can be certain this will work because it is the same plan members of Congress give themselves, and it works for them. The argument is that members of Congress have the same voucher system, and they make up the difference in premiums, so the elderly can too. Not only is that misleading (Congress, always looking out for themselves first, adjusts its vouchers upwards, not downwards over time), but members of Congress also give themselves fat $174,000 annual salaries, plus some juicy pensions. Perhaps I missed it, but I saw nothing in the Republican budget suggesting similar payments to seniors. If Republicans do intend to provide seniors the same annual salaries as members get, then this objection is withdrawn, with apologies for my oversight.

Misleading Claim #4. Question: if this plan is so desirable, why wait 10 years before switching to it? That is, why are they not including people 55 years old and above? Whenever they talk about the plan, they trip over themselves to remind the 55-and-older crowd, "don't worry, this will not impact you". If it is so wonderful, why do they not, instead, lament that it will not be instituted for 10 years, and pledge to do all they can to accelerate it?

If that is not a sure sign that the plan is a fraud, what is?

True, it might take a little time to implement any new plan properly, but a full decade? If this is so wonderful, wouldn't the Republicans sweep the presidency and both Houses by immediately implementing it, even if in stages, as the elderly, who vote in large numbers, flock to the polls to reward their benefactors?

Private-izing Ryan and his Republican fellow travelers know full well that both the current Medicare population, and those slated to relinquish the bonds of their private insurance within a decade, would have electoral bladder and bowel incontinence if they became subject to the Ryan plan. Thus, if they did propose to start implementation immediately, they would lose the 2012 elections in tsunami.

And so, this supposedly wonderful plan to care for seniors is put off to an age group that is not yet thinking with any immediacy about what healthcare will be like for them when they become senior citizens, and those who would think very concretely about it, because it is about to happen to them, are spared.

Clever. Diabolically clever, because it attempts subterfuge about one of the most critical public policy issues that will touch everyone's lives. What kind of person deliberately deceives and misleads hundreds of millions of people into accepting a fairy-tale for their future health coverage -- and would leave them powerless to do anything about it?

False Claim #5. "Private-izing" Ryan's plan is better for young people who otherwise might have to pay higher taxes to cover rising Medicare costs. Actually, Ryan's plan is even worse for young people than it is for their parents , and a disaster for entrepreneurship and jobs. Today, one does not have to worry about how one's parents will pay for medical care when they hit 65. Under "private-izing" Ryan's plan, there is no guarantee that one's parents will be able to get coverage at all, and so the costs of a parent's illness may wipe out not only the parents, but their children as well. Or, if they can get coverage, that their premium costs will be reasonable, and require support from their still working children. Or, that their children's own premiums will not rise even higher because there are now expensive elderly covered in one's insurance pool.

This is not to say that Medicare does not need to be improved to deliver better outcomes and reduce costs. It does, and there are many thoughtful ways to do that. For example, about 2/3 of Medicare's annual expenses are on 10% of the Medicare population. Improving the delivery of care to this discrete subset could save an enormous amount of money over time without decreasing benefits. For example, properly organizing health providers to this group can reduce hospitalizations by 25%. That is, the patients are better AND it costs Medicare much less.

If Paul Ryan (R-WI) were CEO of a publicly-traded corporation, his claims for privatizing Medicare would be subject to shareholders' lawsuits as fraud-on-the-market. If he were a drug manufacturer making the claims he does in a package insert about his Medicare prescription, he would go to jail. Fortunately for Mr. Ryan, members of Congress are not held to the same standards of truth as CEOs.

For your own good, for the good of generations of your family, and for the good of the nation.... Save Medicare from private-izing Ryan.