Tomah Journal - Printable Version

Story originally printed in the Tomah Journal or online at www.tomahjournal.com

Published - Wednesday, May 28, 2008

Editorial: Reforms would leave poor with less health care

Congressman Paul Ryan (R-Janesville) has a novel approach to the nation’s health care crisis:

Provide poor people with less care.

Ryan has received considerable attention for presenting his “Roadmap for the Future,” and he has even been mentioned as a running mate for likely Republican Presidential nominee John McCain. While Ryan deserves credit for developing a detailed plan, it falls short of actually providing a safety net for the old, the sick and the vulnerable.

Ryan would radically transform Medicare and Medicaid by issuing refundable tax credits for recipients of Medicare and Medicaid. People under age 55 would get a refundable tax credit of $2,500 for individuals and $5,000 for families, while Medicare recipients would get a payment of $9,500.

Has Ryan shopped for individual health insurance policies lately? Where can a family buy a policy for $5,000 per year? Wisconsin has a “High Risk Insurance Sharing Plan” that provides coverage for individuals who have been denied by two other carriers, but the rates for a 40-year-old individual with a $2,500 per year deductible are $2,866 per year for man and $3,648 for a woman. That doesn’t include any children, who now are likely to be covered under other state and federal programs (would SCHIP even exist under Ryan’s plan?) Annual premiums of $6,514 (not including children) may not sound like much to a Congressman making $170,000 per year, but it’s huge for a family of four living on $40,000.

Ryan’s numbers don’t make sense for Medicare either. The reason Medicare was created in the first place is because private insurers wouldn’t sell high-risk policies to elderly customers at any price. Unless Ryan’s plan prohibits insurers from denying coverage for pre-existing conditions (older people tend to have them), his voucher is worthless.

There’s a broader problem with Ryan’s plan. He says the existing system is “unsustainable,” but apparently believes the existing system in which private-sector bureaucrats gobble up 31 cents of every health-care dollars can be sustained forever. Another point: Ryan says nothing about the “unsustainability” of government subsidies for exurban sprawl and professional sports franchises, or waging a $3 trillion pre-emptive war. It’s only when discussing subsidies for the poor, sick, elderly and vulnerable does the word “unsustainable” enter the political discourse.

Ryan’s proposals for expanded Health Savings Accounts, broader risk pools and more transparency of costs might work at the margins, but there are only two ways to substantially reduce health care costs: radically alter the bloated insurance system or ration care. Ryan, through a system of deficient tax subsidies, has chosen the latter, and it’s the poor who would bear the brunt of his rationing. If that’s the roadmap for America’s future, then America is headed down a wrong-way street.