MOUNT PLEASANT, Wisconsin — At a town hall meeting last Friday, Rep. Paul Ryan (R-WI) was confronted by a constituent over his endorsement of “premium support,” a plan that would give future retirees a voucher with which to purchase coverage from private insurers or traditional Medicare. When asked whether he would alter the plan in light of experts “backing away” from it, Ryan claimed that prominent scholars – including Henry Aaron – still supported the general framework of his proposal:
CONSTITUENT: The two men that were your co-creators of your privatization of Medicare plan, Robert Reischauer and Henry Aaron, were on the hill last week. I think they spoke to the House Ways and Means Committee. […] What’s interesting though, Brennan was on and they’re backing away from your plan, privatization of Medicare, basically because they’re saying it’s going to cost more and give us fewer services than the traditional plan. […] Are you going to change your plan or how do you stand on that?
RYAN: Hank [sic] Aaron is an economist at Brookings Institute who has been in favor of a different version of what we call “premium support.” […] Henry Aaron doesn’t agree with the way we’re doing it, but these other Democrats that have been working on the Medicare law for literally a couple of decades, would come to agreement on the best way to save and strengthen Medicare.
Ryan claims that his differences with Aaron are only in the implementation of the policy. In fact, Aaron has said that he no longer believes “premium support” is good policy at all. In testimony before the House Ways and Means Committee on April 27, Aaron conceded that there is no strong evidence the plan would lower the growth of health care costs; in fact, he claimed, private “Medicare Advantage plans are more expensive than is traditional Medicare.” Last year, he also said that “gains from being able to choose among competing insurance plans have been exaggerated.” In an email to ThinkProgress, Aaron confirmed that he has totally backed off the plan.
Instead, Aaron now believes that the Affordable Care Act can do a better job reducing costs and protecting beneficiaries. As he told the Ways and Means Committee, “The passage of the Affordable Care Act means we have put in place a key element of the premium support idea for the rest of the population, namely health insurance exchanges.” Aaron noted that those exchanges are similar to what advocates of “premium support” want to see for Medicare, except these do not put “the burden of cost control on beneficiaries.”
ThinkProgress intern Zachary Bernstein contributed to this post.