R/R Plan to Bankrupt Medicare

Paraphrasing Shakespeare, Romney and Ryan come to bury medicare, not to save it.  Under the current iteration of their plan the system will go bankrupt in less than 4 years.

The Obama plan reduces future spending by 716 billion dollars, which helps finance Obamacare, and extends medicare solvency by eight years.  The original Ryan plan had the same future spending reductions, but they financed his proposed tax cuts.  Even with the 716 billion the budget did not come into balance until 2040.  Without that amount Ryan is unable to say when, or if, the budget will balance.  The original plan also increased pharmacy expenses to seniors by reopening the so-called doughnut hole.

The crucial element of the Ryan plan was a voucher system.  For those presently under 55, Medicare was to consist of a fixed dollar amount per month to buy private insurance.  If insurance cost more than that amount, a near certainty, the senior would pay the difference.  Ryan's hope was that competition would force down premium costs.  Having worked more than 30 years as a benefits attorney I have some experience with efforts to reduce health premiums.  It is like pushing on a balloon, you move air around but you do not reduce it.  Further, either seniors would be denied coverage for preexisting conditions or the plan would require insurers to cover all, which would increase costs.  By shifting part of the cost to seniors, a voucher system would reduce medicare expenditures.

Asking future seniors to pay thousands of dollars is not popular.  Eliminating the future reductions in spending sounds good.  Unfortunately, it is a prescription that kills the patient.  Without the cuts,  the medicare trust fund will die in 4 years.  The new twist will shorten the life span.   Romney now proposes to give future seniors a choice between the existing system and vouchers.  This would result in adverse selection.  The healthiest and wealthiest, who use medicare the least, will take the money.  The poorest and sickest, will stay with the program.  The net cost will increase.

The only saving grace is that Romney policies are like Irish weather, if you don't like them wait an hour.