Ryancare is Not Medicare (Krugman)

Medicare would be gutted by the Ryan proposal–the elderly would get stuck buying their insurance from an uncontrolled cost system: the private insurance companies.

…how does the Ryan plan differ from the Affordable Care Act? After all, in both plans people are supposed to buy coverage from private insurers, with a subsidy from the government.

Well, the answer is that the ACA is specifically designed to ensure that insurance is affordable, whereas Ryancare just hands out vouchers and washes its hands. Specifically, the ACA subsidy system (pdf) sets a maximum percentage of income that families are expected to pay for insurance, on a sliding scale that rises with income. To the extent that the actual cost of a minimum acceptable policy exceeds that percentage of income, subsidies make up the difference.

Ryancare, by contrast, provides a fixed sum — end of story. And because this fixed sum would not grow with rising health care costs, it’s almost guaranteed to fall far short of the actual cost of insurance.

This is also why Ryancare is NOT premium support; it’s a voucher system. No matter how much they say it isn’t, that’s exactly what it is.

via Ryancare Versus Obamacare – NYTimes.com.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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