Republican Representative Paul Ryan and Democratic Senator Ron Wyden have a new Medicare plan that involves turning the program, which is a single-payer health insurance system, into a system of private plans with a public option. Is this a good policy idea? Not really, though it’s possible to imagine a decent version of it. (Jonathan Cohn and Austin Frakt have good rundowns — basically, it all depends on the details, which don’t currently exist.) Neither Wyden nor Ryan pretends their idea stands any chance of enactment soon, and they’re not even bothering to try to pass it. The interesting question is how this affects the politics of Medicare.
What Ryan gets is pretty obvious. He has found a way to protect Mitt Romney. Ryan is the author of a radical House budget that, among other things, would transform Medicare into private vouchers, and ratchet down their value over time to the point where they covered a small fraction of the cost of health insurance. It’s wildly unpopular. Unfortunately for Republicans, Mitt Romney found himself in the position last week of embracing Ryan’s deadly unpopular plan, to the glee of Democrats. (Why did Romney do this? Because he needed a line of attack on Newt Gingrich, who had assailed Ryan’s idea as “right-wing social engineering.”)
Wyden’s support gives Romney an out. He can now thread the needle between supporting Ryan, who has unassailable prestige within the Party, without endorsing the details of his plan. All he has to do is simply say he supports the plan Ryan and Democrat Ron Wyden came up with. Now the Ryan plan is no longer an albatross around the neck of the Republican presidential candidate.
The more interesting question is what Wyden gets. Here, I think he is miscalculating. At a purely intellectual level, Ryan is offering a huge compromise. After having hysterically denounced the Affordable Care Act as a vile plot to destroy freedom, Ryan is now proposing to turn Medicare into something almost identical to it, with the exception that it would have a public option. The intellectual basis for the Ryan–Wyden plan is that creating health care exchanges where private insurers compete will reduce health care costs. If that’s true, then the Affordable Care Act is bound to be a huge success, since it contains that very feature. (Since that dynamic is entirely speculative, the Congressional Budget Office conservatively assumed that this feature would not save any money.)
The Ryan–Wyden plan is a programmatic step toward ending the Republican jihad against universal insurance, and melding together the health insurance systems for the elderly and the non-elderly into a public–private hybrid. But that, of course, is only true at the intellectual level. And here I think Wyden is far too credulous about the value of a white paper with a Republican signature. The fact that the Affordable Care Act reflected mostly Republican ideas did not keep the Republican Party from unanimously opposing it. At last week’s debate, Newt Gingrich bluntly admitted that the broad conservative support for health care reform with an individual mandate in 1993 was simply a ploy to stop the Clinton administration’s health care reform:
In 1993, in fighting HillaryCare, virtually every conservative saw the mandate as a less-dangerous future than what Hillary was trying to do. The Heritage Foundation was a major advocate of it. After HillaryCare disappeared it became more and more obvious that mandates have all sorts of problems built into them. People gradually tried to find other techniques. I frankly was floundering, trying to find a way to make sure that people who could afford it were paying their hospital bills while still leaving an out so libertarians to not buy insurance. And that's what we're wrestling with. It's now clear that the mandate, I think, is clearly unconstitutional. But, it started as a conservative effort to stop HillaryCare in the 1990s.
So, yes, from an intellectual standpoint, Wyden is winning powerful concessions from Ryan. But is that really worth anything? Ryan can simply continue to pursue his campaign for less government everywhere. If he can turn single-payer for the elderly into subsidized private insurance, he will. If he can turn subsidized private insurance for the nonelderly into you’re-on-you’re-own, he’ll do that, too. If at some future point, Ryan needs to argue that regulated, subsidized private insurance exchanges are an unconstitutional monstrosity in order to advance that argument, and somebody points out that he once endorsed a plan just like that for Medicare, is that going to stop him?
Ryan–Wyden, if properly designed, is not a horrible idea, and denunciations by the Obama administration and leading Democrats are way over the top. It’s the sort of compromise you could live with if you got something for it – say, the GOP abandoning its crazed revenge campaign to sabotage the Affordable Care Act. But it’s hard to avoid the conclusion that Ryan’s plan here is to help Romney get elected and then pass the Ryan plan. And then poor Ron Wyden can issue a press release expressing his disappointment that his friend Ryan couldn’t work together with him in a bipartisan fashion.