Paul Ryan’s Medicare Plan

David Brooks columns are often difficult to grasp hold of, but I want to flag this accurate-but-misleading account of how Paul Ryan’s “budget roadmap” achieves large reductions in entitlement spending: “On the welfare-state side, he’d sweep away most subsidies to the middle and upper classes, like the tax exemption on employee health plans. He’d essentially voucherize federal benefits, like health care and Social Security, and increase federal subsidies for people down the income scale.”

Since Social Security is just checks mailed out by the government I don’t even know what voucherizing it would mean. But it is true that he wants to replace Medicare, a program that pays for health care services, with vouchers that you use to buy private health insurance. But why would that save money? Is it because private insurance is more efficient than a government-run universal pool? No. It’s because while Medicare’s costs are projected to increase at the same rate as overall health care costs, Ryan’s vouchers are designed to increase in value at a much slower rate. So instead of paying for old people’s health care, which is expensive, Ryan proposed to just not pay for old people’s health care. Nobody can seriously deny that refusing to pay what health care costs saves a lot of money relative to paying what it actually does cost. But the savings here have nothing to do with vouchers or with sweeping away benefits to the middle and upper classes. You could accomplish the exact same thing by setting a cap on how much Medicare will pay for any one person’s health care. But conservatives would denounce that as “rationing” even though it’s identical in its impact on patients.

Either way, though, the issue is that as a country we can’t afford the quantity of health care services we’re projected to consumer in 30 or 40 years. Shifting the cost around doesn’t actually address that issue.