In this revealing interview with NPR’s Robert Siegel, Rep. Paul Ryan (R-WI) dismisses the idea that seniors can find more affordable and efficient coverage from traditional Medicare because such an argument goes against his “philosophy”:
ROBERT: Congressman Ryan, critics of your idea say that the cost of insurance for members of Congress has actually gone up faster with the element of choice than the cost of Medicare has. Why would you, if turned out that indeed the government run program was more cost efficient would you favor it? Or is it in face an ideological preference for the market, even if the market is less efficient?
REP. RYAN: The point I’m trying to make, and there is a difference of I think, philosophy here of what works best. We don’t believe surrendering more of the health-care system over to government is an effective solution to lowering health-care costs. It simply results in rationing and price controlling. [...]
ROBERT: You’re saying that even if the Medicare system were to be comparably more efficient … that you’re saying if it’s not competitive…
REP. RYAN: Competition
ROBERT: You’d prefer what might be conceivably a more expensive system if it involves free-market competition?
REP. RYAN: Actually, no we don’t believe that at all. We believe it will be a less expensive system. But believe you me, we need to do more in the health-care system to get the consumer more power in the health care system so that the patient and their doctor have the real power in the health care system….
It’s all well and good that Republicans “believe” that a system of private insurers would be “less expensive” than traditional fee-for-service Medicare, but they’re wrong. We know that private insurers cost more because we’re already paying private insurers participating in Medicare Advantage an average of 9 percent — about $8.9 billion — more than traditional Medicare with an estimated 13 percent of the payment going towards profits and administrative costs. By contrast, Medicare spends only about 2 percent on administration.
That added cost means that beneficiaries would have to pay a private plan more for the same benefits. As the Congressional Budget Office (CBO) has pointed out in its analysis of the Ryan proposal, “a typical beneficiary would spend more for health care….[because] private plans would cost more than traditional Medicare because of the net effect of differences in payment rates for providers, administrative costs, and utilization of health care services.” “Second, the government’s contribution would grow more slowly than health care costs, leaving more for beneficiaries to pay.”
But Ryan suggests that none of this really matters because for him it’s a difference in “philosophy,” not a rational decision about what actually makes more sense for the beneficiary.