Saturday, September 29, 2012 :::
I've been meaning to comment on a point that pops up once in a while: the official growth rate of Medicare under the Ryan-Wyden plan (and of the similar Romney-Ryan plan) is the same as the official growth rate under Obama's law: GDP growth plus 1% per year, IIRC.
This is correct using the numbers that the CBO used to score the plans, but that doesn't mean the plans have the same effect on the budget. Ryan-Wyden uses competition to try to reduce the growth of Medicare (not to mention, to give its recipients more of what they want), which a recent estimate suggests would reduce costs by 9%, though, of course, it's not a perfect estimate. The CBO doesn't use estimates of dynamic effects, so to get a CBO score, Ryan and Wyden added a backstop that limits spending to the rate in existing law by making wealthy Medicare recipients pay more and cutting payments to medical providers in areas in which costs have grown the most. Existing law similarly limits growth by cutting payments to medical providers.
So the official rates are the same, and both systems enforce the limits by reducing the availability of service, but Ryan-Wyden could plausibly have a lower growth rate; even if it doesn't, senior choice will do some of the job of limiting cost growth in ways in which growth reductions don't reduce benefits received, so the broad-based cuts imposed from Washington should be less severe. The CBO-official growth rates are the same, but that's just because the CBO only recognizes the growth rates of the caps, and ignores the primary Ryan-Wyden (and, now, Romney) means of holding down cost growth.
Labels: Health Care
::: posted by Steven at 3:27 PM