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Friday, August 17, 2012

Ryan and Medicare: A Recipe for Increased Costs

Doctor sees patients
Against the background of Mitt Romney's continuing attacks on Barack Obama and Medicare, PolitiFact checked a statement by Obama deputy campaign manager Stephanie Cutter. "You know, I heard Mitt Romney deride the $700 billion cuts in Medicare that the president achieved through health care reform," Cutter told Face the Nation. "You know what those cuts are? It’s taking subsidies away from insurance companies, taking rebates away from prescription drug company. Is that what Mitt Romney wants to protect? And interestingly enough Paul Ryan protected those cuts in his budget."

Not surprisingly -- since they also rated Romney's statements on this subject "mostly false" - PolitiFact rated this as "true."

But none of this is extremely surprising. It's a well-established fact that the Romney campaign is built on a mountain of lies. And this is yet another -- PolitiFact goes further than Cutter and argues that it's dishonest to even call the amount a cut. "Well, there are cuts and then there are CUTS. Neither Obama nor his health care law literally 'cut' a dollar from the Medicare program’s budget," the editors write. "Rather, the health care law instituted a number of changes to reduce the growth of Medicare costs. At the time the law was passed, those reductions amounted to $500 billion over the next 10 years."


OK, so Mitt's lying. Mitt always lies. If I wrote a "Mitt caught in a lie!" post every time Mitt was caught in a lie, it would actually become boring -- like starting every day trying to figure out a new way to say, "The sun came up again!" It's not even news anymore, it's just who the guy is.

No, more interesting is where the bulk of the spending reductions come from, because it demonstrates the failure of the sort of ideas Mitt Romney and Paul Ryan embrace. Observe:

What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers.

Paul Ryan's plan to replace Medicare with a voucher program starts to look pretty familiar, doesn't it? The idea with the Ryan plan is to bring down cost by introducing competition into what is currently a singlepayer system. Turns out that doesn't work out very well. And why should it?

The problem that Ryan and Bush had was that they didn't consider a scientific discovery called "math." Medicare as it is now works pretty simply: Medicare pays the doctor. Under Ryan's plan, Medicare pays a for-profit insurance company that pays the doctor. In other words, it introduces a completely unnecessary middleman into the equation. And that middleman has to get his beak wet. Of course costs will go up. How could they do anything other than go up? Medicare doesn't need to make a profit, so it can provide coverage at cost. A private insurer has to see profit, so the price of coverage is cost plus profit. For the record, cost plus anything is more than just cost.

Yet this is the sort of thing Republicans always want to sell you. When they talk about vouchers, it means they want to introduce profit to a system where it doesn't exist and increase costs. Ditto privatization. The idea isn't to help you, the idea is to help the corporations that would make the profit. And they make that profit from your pocket. It's a scam, pure and simple, and you're the mark.

Not only are Mitt Romney's attacks on Obama over Medicare depressingly familiar in their dishonesty, but so is the Republican alternative. There is nothing Mitt Romney or Paul Ryan are saying about Medicare that is remotely honest.

Keep that in mind in November.


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