In a recent CNN interview, Rep. Paul Ryan (R-Wisconsin) accused opponents of his alleged “Path to Prosperity” of being “willing to lie and demagogue Medicare and scare seniors”. This is the same man who has been screaming the sky is falling for the last two years and that we have to radically reduce the deficit RIGHT NOW, or the country will suddenly fall into an economic abyss. He doesn’t see the content of his plan as being the cause for resistance. He claims that it’s a “marketing problem”. To clarify things, he says, “Our budget’s so clear. It doesn’t change benefits for people over the age of 55 and it saves Medicare for the next generation”. Clearly, his plan does not “save” Medicare for anybody. It is a classic example of privatization.
Let’s first examine what Ryan claims to be his primary motivation: the deficit crisis. We should not allow Ryan’s alarmist rhetoric to panic us. We have some economic problems, but we’re not Greece. Deficits should decline markedly over the next few years, and Social Security and Medicare will not devour us. Over the last 3 years, the federal deficit has been about 9% to 10% of GDP. By historical standards, that’s very large, but it wasn’t the result of profligate spending. It was caused by the worst recession in +70 years. While it is happening slowly, the economy has been steadily recovering since June 2009. Barring some catastrophe, the effects of recession should fade and the economy should start showing more robust growth. (Certainly, we’ve already seen this in the American auto industy). This means greatly increased revenues and less spending on things like unemployment benefits, food stamps, Medicaid rises and financial bailouts. Plus, we have the expiration of the Bush tax cuts for the wealthy to look forward to, as long as Republicans don’t try to extort another extension.
The bottom line is that, if we do NOTHING, the deficit as a percentage of GDP should go from 10% to about 3% by 2014. Using Medicare as an instrument of fear to justify radical change, which is what Ryan has been doing, is more than a little dishonest. In 2010, Medicare spending (less premiums paid by beneficiaries) was 3.1% of GDP. In 2021, the CBO projects it will be 3.6%, an increase of only 0.5 percent. In other words, this budgetary “monster” which Ryan claims is going to ruin the American way of life will increase its share of the national economy by about 1%. This amounts to less than half the cost of the Bush tax cuts.
This is not a long-term fiscal emergency; it’s what you’d expect after the deepest recession since the Great Depression. So Rep. Ryan’s plan to privatize Medicare is not only extreme, it is wholly unnecessary. Ryan’s Medicare plan would force those who become beneficiaries starting in 2021 to more than double their out-of-pocket spending. Some estimates for this out-of-pocket increase are as high as $7,500/year. But that’s not the worst thing about his plan.
What congressional conservatives have wanted to do for decades is wipe out the entitlements: Social Security, Medicare and Medicaid. They don’t view these programs as vital safety nets for seniors which have helped lift them out of poverty over the last 70 years. They see them as evil ideology; socialism.; an obstacle to states’ rights, which they have been fighting for since the mid-19th century. They know that the quickest way to kill these programs is to privatize them. Put for-profit companies in charge and let the so-called free market do the rest. They realize that Medicare, as a government program, operates on about 6% overhead, while private insurance companies have overhead costs which are six times that. On top of that, private insurers have to show their investors a profit every year. So, what we’re looking at here is a plan that will drastically reduce coverage, while allowing premiums and deductibles to continue to escalate at warp speed. Medicare, as a vital service to seniors, will become a shell of its former self. All the money people have paid into Medicare during their working years will now be handed over to private insurance companies, with more than 1/3 going to pay for corporate overhead. Then, insurance companies will fight tooth & nail to hold onto the other 2/3s by denying claims and greatly reducing coverages. That’s how for-profit companies work.
So, the question remains: Is Paul Ryan consciously trying to destroy Medicare in order to satisfy his ideologically-driven hatred of the federal government, or is he just an ignoramus who actually believes the growth predictions that his plan borrowed from The Heritage Foundation? Does he actually believe that he’s saving Medicare for the next generation? From what I can tell, Paul Ryan is not a stupid man. But his common sense and humanity are definitely being held hostage by his extreme right-wing ideology. I don’t think he really cares about the deficit at all. If he did, he wouldn’t be so dead set against letting the Bush tax cut for the wealthy expire, and he certainly wouldn’t have opposed ending subsidies for Big Oil. Ryan has also opposed allowing Medicare to negotiate drug prices with Big Pharma, which could save seniors billions of dollars, and such a proposal is nowhere to be seen in his plan. I believe Ryan and the GOP are trying to manufacture hysteria over the deficit, then use that fear to gain support for dismantling vital federal programs and, more importantly, to defeat Barack Obama in 2012.
I think the funniest thing I ever heard was Mitch McConnell on a recent Sunday morning news program, defending Ryan’s plan for Medicare. McConnell said it would “empower Grandma, by giving her the power to shop for the best policy for her”. He went on to say this “shopping would create competition and drive down costs.” He conveniently leaves out that Ryan’s plan would be giving her a fixed “premium assistance” check which would end up covering less than half what her new private insurer would charge for adequate coverage. This also begs the question as to whether or not insurance companies are going to be lining up to insure people in their 70’s and 80’s. Doesn’t sound very realistic to me.
At the end of the day, Ryan’s plan destroys Medicare by privatizing it, and leaves a new program in place which would be more aptly named Mini-Care.