Shortly after Paul Ryan’s Republican U.S. House colleagues nominated him to serve again as speaker this week, the Wisconsin budget hawk had this to say on Twitter: “Now it’s time to go big.”
With Republicans in control of two of the U.S. government’s three branches of government, Ryan has the best chance of his career to turn his deficit-cutting ideas into reality. What the nation needs to understand is that chief among these proposals are controversial Medicare reforms that raise troubling generational fairness questions and largely went undiscussed during the presidential campaign.
Medicare is the federally funded health care program that pays for much of the hospital care, doctor visits and medications for those 65 and older. Its 2014 costs were $505 billion — 14 percent of total federal spending. Honest budget-cutters have long acknowledged that Medicare’s size means it must be included in plans to tackle long-term debt.
To his credit, Ryan has been blunt about this instead of pandering to the powerful senior-citizens lobby and saying reductions could be found elsewhere. But his solution could be hard medicine — for some. He wants to “gradually raise” the Medicare eligibility age to 67 beginning in 2020, according to an analysis by the Center for Budget and Policy Priorities.
In addition, Ryan wants to move Medicare toward a “premium support” model. Instead of Medicare’s current guarantee of paying for a certain level of coverage — such as 80 percent of a hospital stay, for example — a premium support plan would give a fixed sum to buy coverage on the private insurance market to new beneficiaries beginning in 2024.
Those sums would likely vary by region. The amount would likely cover most or all of the cost of a modest private-health plan — at least at the beginning. The question is whether these sums would keep up with rising health care costs, which tend to increase faster than economic growth. This is the key detail that must be weighed with care as debate unfolds. Otherwise, Ryan’s reform could shift too much of the health care cost burden onto seniors’ shoulders. There are proposals to keep the traditional Medicare program running concurrently. But a shift of healthier elders into the private plans could leave the sickest and most expensive enrollees in the traditional program and raise questions about its future financial sustainability.
As mentioned, there are generational questions that need an airing. Ryan’s plan isn’t one of shared sacrifice. Baby boomers generally get a pass, but Generation Xers and millennials would be guinea pigs. These Americans are already pinched by student-loan debt, rising medical costs and shrinking employer retirement contributions. If Ryan truly has a “Better Way,” as he’s claimed, why is an age line drawn to shield some from it?