Uwe Reinhardt is up with a new post explaining why the GOP’s incessant argument linking the premium support proposal in the Paul Ryan budget to the plan members of Congress enjoy (the Federal Employees Health Benefits Plan or FEHBP) is so wrong. The basic distinction is this: the taxpayer contribution that members of Congress receive to cover their health care expenses keeps up with health care costs; Ryan’s $8,000 voucher to seniors is only pegged to the Consumer Price Index (i.e. inflation) and will depreciate over time. Look:
The table below table shows how private health insurance premiums since 2000 have outpaced growth in the CPI, and Medicare spending. Medicare uses its size and clout to negotiate lower rates with providers and generally has lower administrative costs than private insurers:
So the Ryan plan will give seniors a voucher that will shrink over time and a choice of private insurance plans that will cost more than traditional Medicare coverage. As Reinhardt put it, “It is fair to wonder whether members of Congress would ever pass a bill indexing the federal contribution to their insurance premiums only to the C.P.I. rather than, as now, to the growth in insurance premiums.” They probably wouldn’t, and claim they do.