Paul Ryan’s Bad Political Economy

Representative Paul Ryan (R-WI) in 2009:

[Medicare Advantage] is a favorite target of Washington. In 1997, a similar option was made available to seniors, then called Medicare+Choice. But year after year, the reimbursement rates were cut for these plans, making it increasingly unattractive for private providers to offer plans. As a result of inadequate federal reimbursements, seniors in Southeastern Wisconsin were dropped from Humana and United Health Care’s Primecare Gold plans. Prior to dropping coverage in 1999, Primecare Gold had 1,965 enrollees in Racine County and 590 in Kenosha County. […]

If all of this is coming as a surprise, the problem runs deeper than politicians failing to be frank with the American people. The federal government has actively sought to silence providers’ warnings to their customers of these pending cuts. It was recently uncovered that the Centers for Medicare and Medicaid Services (CMS), a division the U.S. Department of Health and Human Services, placed a gag order on Medicare Advantage providers for sharing information with their enrollees about pending changes to their plans. Without regard for private health care plans’ right to inform their enrollees about consequential legislation, CMS has launched an investigation against Humana for mailing a factually verified warning about proposed cuts.

So why is it that this exact same problem won’t recur 11 years from now when according to Ryan’s plan we’re supposed to start seeing draconian cuts in payments to private Medicare insurers. Benjy Sarlin has more on the basic unworkability of this idea.