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Cutting Medicare: It's a matter of how, not if

I've got a modest proposal: You're not allowed to demand a "serious conversation" over Medicare unless you can answer these three questions:

(1) Mitt Romney says that "unlike the current president who has cut Medicare funding by $700 billion, we will preserve and protect Medicare." What happens to those cuts in the Ryan budget?

(2) What is the growth rate of Medicare under the Paul Ryan budget?

(3) What is the growth rate of Medicare under President Barack Obama's budget?

The answers to these questions are, in order, "it keeps them," "GDP plus 0.5 percent," and "GDP plus 0.5 percent."

Let's be very clear what this means: Ryan's budget — which Romney has endorsed — keeps Obama's cuts to Medicare, and both Ryan and Obama envision the same long-term spending path for Medicare. The difference between the two campaigns is not in how much they cut Medicare but in how they cut Medicare.

This brings us to the big myth of this campaign, or at least of this particular conversation: That Republicans, but not Democrats, have a plan to cut Medicare costs.

Obama's Medicare reform plan isn't that hard to find. It's largely in Title III of the Patient Protection and Affordable Care Act. The basic strategy has three components: First, figure out what "quality" in health care is. Second, figure out how to pay for quality rather than paying for volume. Third, make it easier for Medicare to quickly update itself to reflect both advances in knowledge about what quality is and how to pay for it.

As for Romney's plan? Well, it's 902 words long, and basically sketches a less detailed version of the plan Ryan released in his 2013 budget proposal (which is, for the record, much more moderate than the plan in his 2012 budget).

Romney would give Medicare beneficiaries a voucher permitting them to choose between traditional Medicare and private plans. Romney's people tell me his plan will use competitive bidding, in which the value of the voucher is tied to the lowest-cost (or, in some versions, second-lowest cost) plan. If beneficiaries want a more expensive plan, they'll have to pay the difference out of pocket.

These plans get at the basic disagreement between Democrats and Republicans on Medicare. Democrats believe the best way to reform Medicare is to leave the program intact but vastly strengthen its ability to pay for quality. Republicans believe the best way to reform Medicare is to fracture the system between private plans and traditional Medicare and let competition do its work.

It's worth saying there's no particularly good evidence for either option. Competition hasn't worked very well in the health care system. Indeed, Medicare currently includes private options through the Medicare Advantage program. The idea was these private, managed-care alternatives would be cheaper than traditional Medicare. As it turned out, they ended up costing about 20 percent more.

As for the pay-for-quality revolution the Obama administration envisions, that hasn't been proved at Medicare's scale, either.

Both Ryan and Obama — but not Romney — have proposed to back up their promises with an enforceable cap on the program's future growth. Whether future Congresses would enforce such caps is, of course, an open question.

So there's a conflict of policy visions. But it's simply a conservative myth that the White House hasn't put forward a Medicare reform plan. What this line really means is that the White House hasn't put forward some variant of Ryan's plan, which in many Republican circles has come to be seen as the only policy change that counts as "entitlement reform."

But Obama's plan is, without doubt, far more detailed than anything Romney has put forward, and Republicans are well aware of its existence. One Republican accused Obama of a "bureaucratic approach to controlling Medicare costs" which "empowers a board of 15 unelected officials … to hold the growth of Medicare spending." He said the cuts would be so severe that they "would simply drive Medicare providers out of business, resulting in harsh disruptions and denied care for seniors."

That Republican? Paul Ryan.

© 2012 Washington Post

Cutting Medicare: It's a matter of how, not if 08/14/12 [Last modified: Tuesday, August 14, 2012 5:16pm]
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