Cost-Efficient policies would drive down costs, reform Medicare and Medicaid
While conservatives have vigorously opposed President Obama’s health care law, they have struggled to produce a viable alternative. However, Rep. Paul Ryan (R-WI), who previously released a bold and intelligent budget plan last April, has released a health care proposal this week which would effectively replace ObamaCare and implement more efficient, stronger policies.
As Ramesh Ponnuru notes, two of Ryan’s central ideas have been well received, for good reason. Ryan pushes for Medicaid block grants, whereas ObamaCare gives states half of whatever cost they determine will cover their annual Medicaid expenses, with little regard for how much of this money is unnecessary or extraneous.
Ryan also advocates a transition from Medicare to “premium support”, an idea which he also offered last April. Like block grants for Medicaid, premium support would be far less costly than its alternative under ObamaCare. It would also enable patients to choose their own health care plans, rather being restricted to one plan and having to purchase supplemental care not covered by Medicare.
Also central to Ryan’s proposal is reforming the current relationship between taxes and insurance, which begets inflated costs. Under the current system, employers get larger tax breaks for more expensive employee coverage. Ryan’s idea is that employees receive a credit which they can either use on employer-based coverage or seek coverage elsewhere. The freedom to choose their own plans would increase competition and drive down costs. Ideally, this would also leave employers with more money to increase wages rather than spend on health care outlays.
This scenario is clearly preferable to that which is unfolding as a result of ObamaCare’s provisions: employers unwilling to hire and dropping coverage altogether, furthering the current economic malaise.
Rep. Ryan’s plan is at this point tentative, but it does a vastly superior job of remedying the largest problems underlying health care than does the President’s law. Namely, it reforms the currently-unsustainable Medicare and Medicaid programs, and targets the inflated costs which have distorted the market beyond recognition. These ideas should be heard, and optimally implemented, and not drowned out by partisan rhetoric.