The Bowles-Simpson commission’s recommended cancellation of the tax exclusion for employer-based health care plans “accelerates the expansion of Obamacare,” which he’s convinced will cause employers to transfer millions of workers into government-subsidized exchanges, exploding costs.
Though the administration and the Congressional Budget Office claim Obamacare can save money, Ryan said, “all the other actuaries, including Medicare’s, tell us that 100 million people eventually will end up in these exchanges.”
Rivlin and Ryan did not come up with a plan to reform Obamacare, but to control costs for the two biggest government health programs, Medicare and Medicaid, to 1 percent above the growth rate for gross national product.
Currently, the programs are growing at double that rate.
Under their plan, “we’d grandfather the grandparents,” Ryan said, allowing current retirees and those over 55 to keep fee-for-service Medicare, in which government sets fees for procedures and pays for as many as a patient receives.
But younger workers would be given a payment based on income and allowed to purchase private insurance through a regulated exchange.
Older and sicker patients would receive higher payments, encouraging insurance companies to offer policies to them.
Obamacare — and the debt commission — propose to contain costs by “top-down price controls and rationing, which have been tried again and again and never work,” Ryan said.
“We control costs by individual choice and market-based mechanisms,” he told me.
That system works for the Medicare Part D prescription drug benefit, which is costing 40 percent less than originally estimated while the rest of Medicare is going broke.
Because it wasn’t part of the Obama commission’s final report, the Rivlin-Ryan plan has received much less attention than it deserves. It represents a bipartisan convergence that is the only path out of America’s debt crisis.