Samuelson’s odd defense of ending Medicare

Washington Post columnist Robert Samuelson had a curious piece in today’s paper. It appeared to be a defense of Rep. Paul Ryan’s radical plan to end Medicare’s current single-payer system and replace it with a voucher program for private insurance. But in defending Ryan’s plan, Samuelson admits that no one knows if it would work, and that if it doesn’t, health care costs would not only not be lowered, they’d go up a third more than under the current system and out-of-pocket expenses for seniors would more than double.

In other words, Ryan’s plan could well lead to a million personal catastrophes. Or maybe not. Though Samuelson’s description of how the plan might possibly lower costs seems pretty far-fetched to me:

Beginning in 2022, new (not existing) Medicare beneficiaries would receive a voucher, valued initially at about $8,000. The theory is simple. Suddenly empowered, Medicare beneficiaries would shop for lowest-cost, highest-quality insurance plans providing a required package of benefits. The health-care delivery system would be forced to restructure by reducing costs and improving quality. Doctors, hospitals and clinics would form networks; there would be more “coordination” of care, helped by more investment in information technology; better use of deductibles and co-payments would reduce unnecessary trips to doctors’ offices or clinics.

Suddenly “empowered”? That’s what Samuelson calls being given a voucher that will be nothing close to sufficient to buy private coverage? How many consumers can cut through the complexity of insurance offerings to figure out which is actually the lowest cost and highest quality? Even with the limited options offered to most people through their employers, it can be difficult to select the right plan. And, of course, Samuelson assumes, as Ryan does, that there will be lots of insurance companies eager to serve the oldest, sickliest segment of the American population – especially when they supposedly won’t be permitted to reject those with pre-existing conditions or try to cherry pick only the healthiest.

Samuelson fails to mention that, while no one has a clue if Ryan’s plan would work as advertised, more than 100 health care experts and economists believe President Obama’s approach – which Samuelson writes off as “tinkering” – would “slow the rapid projected increases in health care costs in the federal budget and to improve the delivery of health care. Increases in Medicare, Medicaid and the private sector could be slowed by giving providers greater incentives to adopt more cost-effective treatments and prevention interventions.”

Samuelson is right that uncontrolled increases in health spending represent an enormous threat to the United States, both the government and its citizens. But his confidence in Ryan’s “empowerment” methods seems grossly misplaced.

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