RyanCare Vs. ObamaCare

Paul Krugman's critiques of RyanCare have delivered questions as to how RyanCare differes from ObamaCare with regard to how Americans will pay for health care under ObamaCare. Here is Krugman's response:

[H]ow 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.

This is an inadequate answer imo. Indeed, it provides an obvious retort - what if RyanCare incorporated provisions to "ensure that insurance was affordable[?}" Would it be okay then? No it would not. Because Medicare is superior to ACA. Because single payer public insurance is superior to ACA. Krugman implicitly says so here. Moreover, Krugman is all too sanguine about the efficacy of ACA's ability to make sure "insurance is affordable." A perusal of the article Krugman links to, written by Jon Gruber, demonstrates this:

Through the insurance exchanges, employers and individuals will be able to choose among plans that have a federally determined essential-benefits package. While the exact details of this benefits package have yet to be specified, health plans in the insurance exchanges must have an “actuarial value” of at least 60 percent; that is, for the typical population, the insurance plan must cover, on average, 60 percent of the cost of insurance..

In addition, the out-of-pocket limit for enrollee spending cannot exceed the regulated level for health savings accounts (roughly $6,000). [. . .]

(Emphasis supplied.) Consider this "affordability" argument. If you qualify for the minimum subsidy under ACA, you have to cover 40% of the cost of insurance premiums PLUS $6,000 in out of pocket costs. What is 400% of FPL (the level at which subsidies are permitted)? For an individual it is around $53,000.00. Do the math. This is affordable?

Gruber continues:

A major feature of the Affordable Care Act is assistance for low-income individuals purchasing insurance through the exchanges. Those with incomes from 133 percent to 399 percent of FPL are eligible for income-based tax credits to help defray the cost of purchasing insurance in the state exchanges. These families will pay the percentage of income specified in Exhibit 1 for the second-lowest-cost silver plan available in their area, and the government will pay any remaining costs above that level. [. . .]

(Emphasis supplied.) This is debatable, as the current GOP House and state governments like Florida will attest. It seems an act of misguided faith. Gruber asserts that:

The vast majority of America’s poorer families can afford health insurance premiums and typical out-of-pocket health care costs under the schedules specified by the Affordable Care Act.

Perhaps on paper. In the real world, governments will cuts their expenses at the expense of the most vulnerable. What will happen is that private actors will do what private actors do, cut their costs as much as permitted - which means less health care for the most vulnerable.

The ACA's exchange system is a Rube Goldberg contraption destined for failure. Some say that even this is better than nothing. I do not agree because ACA's exchange system occupies reform space that should be taken by the reform that can actually work in the United States - expansion of single payer public insurance.

The best reform proposal that was discussed during the health bill debate happened by accident - expansion of Medicare to persons 55 and older. Joe Lieberman blocked it at the time (though it could have been approved through reconciliation.) I would have traded that for the entire exchange contraption. Medicare is the best system for delivery of meaningful health insurance the United States has ever tried. It should be the model for all health reform in the United States. Let me again quote Paul Krugman:

What is Medicare? It’s single-payer coverage for the elderly. Other countries have single-payer systems that are much cheaper than ours — and also much cheaper than private insurance in America. So there’s nothing about the form that makes Medicare unsustainable, unless you think that health care itself is unsustainable.

What is true is that the U.S. Medicare is expensive compared with, say, Canadian Medicare (yes, that’s what they call their system) or the French health care system (which is complicated, but largely single-payer in its essentials); that’s because Medicare American-style is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items.

So Medicare will have to start saying no; it will have to provide incentives to move away from fee for service, and so on and so forth. But such changes would not mean a fundamental change in the way Medicare works. [. . .] So this business about Medicare in its present form being unsustainable sounds wise but is actually a stupid slogan. The solution to the future of Medicare is Medicare — smarter, less open-ended, but recognizably the same program.

(Emphasis supplied.) If this is true, and I think it is, then surely it extends to health insurance and care reform in general. RyanCare is LIKE ObamaCare in its structure, minus the affordability concerns.

Krugman argues, rightly in my view, that Medicare as is is the right approach. ACA's reforms go down the wrong path (indeed the Ryan path frankly.) Kruigman tries to square a circle here. The critiques of RyanCare can be applied to ObamaCare. They are similar attempts at reform (even though ObamaCare is more concerned with affordability.)

They both head down the wrong path of reform. If Medicare is worth defending, then ACA reform is the wrong reform.

Krugman is unable to accept this obvious conclusion.

Speaking for me only

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    Jared Berstein tried covering the same ground (5.00 / 1) (#2)
    by andgarden on Sat Jun 04, 2011 at 11:41:20 AM EST
    last week. He essentially changed the subject:

    Q: What gives you confidence that the subsidies and exchanges will be of any more use to the uninsured young in being able to afford health insurance than the vouchers would be for seniors under the Republican plan?

    A: First of all, remember that "subsidies and exchanges" are not the relevant comparison to the Republican's plan to privatize Medicare.  Under the Affordable Care Act, Medicare retains the guarantee that makes it such a valuable program in terms of health care security for seniors.

    But instead, let's ask the question will the exchanges lower health costs throughout the health care system?  First of all, we'll have to see if any of this stuff works, including the much more important cost saving mechanism, the independent board (IPAB).  Smart people without a vested interest think it will, like the folks at CBO, but we won't know until we try.

    But the exchanges are more about coverage than cost savings.  The fact that they provide a pooling mechanism for folks who would otherwise have to shop for coverage on the more expensive individual market should help a bit.  But if there are real savings here, the kind we need to avoid the continued attack of the health care spending monster, it will be because IPAB identifies cost-effectiveness savings that move from the Medicare side of service provision to the private side as well.

    No intelligent liberal has any confidence that this will actually work.

    My question is (5.00 / 2) (#7)
    by Big Tent Democrat on Sat Jun 04, 2011 at 11:58:17 AM EST
    if Medicare is worth defending, why is not worth expanding?

    Of course (5.00 / 2) (#10)
    by andgarden on Sat Jun 04, 2011 at 11:59:31 AM EST
    Imagine that in March of 2009 the House had passed Medicare for all with the same drive and unity as the Republicans passed Ryancare.

    It would have been unstoppable.


    Interesting point (none / 0) (#12)
    by Big Tent Democrat on Sat Jun 04, 2011 at 12:01:52 PM EST
    Even if you could not get it, what a place to start the bargaining.

    There is a post in that idea.


    What point is that? (5.00 / 2) (#32)
    by NYShooter on Sat Jun 04, 2011 at 10:57:46 PM EST
    That Obama had numerous opportunities to ram almost anything through that he wanted to. While caveats go with the territory, certainly many here at TL found it inexplicably frustrating that, rather than being aggressive in pushing a Progressive agenda, he seemed almost surprised, and not pleasantly so, that the momentum, powerful mandate,  overwhelming good will, and Congressional majorities given to him by the voters meant that he would have to perform  contortions to fulfill his depressingly harsh, and heartless Conservative agenda while pretending to be a Democrat.

    That's the only plausible explanation for his paralysis in the face of being given overwhelmingly  superior strength to wipe out the eight Bush years, and neo-conservatism (or neo-liberalism, I get confused) altogether.

    Read the stories in all the newspapers today. His campaign strategy, understandably they claim they don't have one yet, is clear on the main point though. No mention whatsoever of any policies that might lessen the suffering in the country, only how to sell the meme that you wouldn't want to change horses in mid stream

    That these idiots still don't get it is just astounding.  

    You can promote all the the practical, doable, and beneficial programs that you want (take a number and get in line) As long as Geithner  is the object of Obama's love nothing that would take a nickel from the Masters will be on the table.

    Why is "this time different?"


    Exactly: define the negotiation with Ben Nelson (none / 0) (#13)
    by andgarden on Sat Jun 04, 2011 at 12:04:31 PM EST
    on your own best terms. Better yet, put the whole thing in a reconciliation package so he can say no if he wants to.

    Medicare for all, or even Medicare buy-in option (5.00 / 1) (#14)
    by Coral on Sat Jun 04, 2011 at 12:12:34 PM EST
    would have been the way to go. I think Obama could have managed this with a full-court press at the beginning of his term.

    But I think ACA is better than the status-quo, pre-ACA. MA plan has really helped lower income folks I know get insurance and hold onto it. Is it ideal? No. But definitely better than other places with little or no help for those who don't qualify for Medicaid.


    Yup (5.00 / 2) (#27)
    by gyrfalcon on Sat Jun 04, 2011 at 06:42:14 PM EST
    He could have managed it if he wanted to.  But he didn't want to.  He bargained it away right from the get-go with the insurance companies and the for-profit hospitals.  End of story.

    Thanks, Barack!


    Jeez (none / 0) (#26)
    by gyrfalcon on Sat Jun 04, 2011 at 06:40:06 PM EST
    Right to the heart of it.  That's exactly right, IMO.

    Also, your first link to Krugman's post is wrong (5.00 / 1) (#4)
    by andgarden on Sat Jun 04, 2011 at 11:43:17 AM EST

    It's a representative post (none / 0) (#5)
    by Big Tent Democrat on Sat Jun 04, 2011 at 11:55:56 AM EST
    I think.

    I wasn't clear (none / 0) (#8)
    by andgarden on Sat Jun 04, 2011 at 11:58:41 AM EST
    I mean the main post you refer to in this post (i.e., why the ACA isn't like Ryancare).

    Gotcha (none / 0) (#11)
    by Big Tent Democrat on Sat Jun 04, 2011 at 12:00:55 PM EST
    Fixed. Thanks.

    Sounds like Cigna (none / 0) (#34)
    by Amiss on Sun Jun 05, 2011 at 01:58:41 AM EST
    "If you qualify for the minimum subsidy under ACA, you have to cover 40% of the cost of insurance premiums PLUS $6,000 in out of pocket costs. What is 400% of FPL (the level at which subsidies are permitted)? For an individual it is around $53,000.00. Do the math. This is affordable?"

    Cigna is the company my husband has at work and it is awful!


    Obamacare Only Mandates Catastropic Insurance (5.00 / 1) (#15)
    by Dan the Man on Sat Jun 04, 2011 at 01:00:44 PM EST
    Under Obamacare, people are still required to buy insurance even if the only insurance avaiable is catastropic insurance ie "high deductible plans": "The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA."

    So if the only affordable insurance offered to you is a high deductible plan (ie catastrophic insurance or junk insurance) of, say, $5000, and you can afford it,  then under the ACA you are required to buy it.  Since these plans don't pay for anything (eg a doctors visit for a cold) until you reach your deductible, you probably won't get anything back from the insurance premiums you gave to the insurance company under these circumstances.

    I haven't looked into the details of the Ryancare minimum coverage limits, but I would expect the Ryancare minimum coverage limits to be higher than the Obamacare ones (which permit high deductible plans).  So Ryancare actually offers better insurance on his exchanges than Obamacare does.

    Yeah, but there's a big fat out (none / 0) (#28)
    by gyrfalcon on Sat Jun 04, 2011 at 06:44:26 PM EST
    from that vise play.  The "penalty" for not having insurance is comparatively tiny, 800 bucks or so last time I looked.

    Serious consideration (5.00 / 1) (#17)
    by KeysDan on Sat Jun 04, 2011 at 02:33:56 PM EST
    of Medicare for all, Medicare buy-in or Medicare inclusion to age 55 were not only "off the table", but were also, pooh-pooh'd by the Obama administration and many Congressional Democrats as being naive and impractical.  We were, after all, not starting from scratch--it would be too revolutionary, and we had to think of the insurance companies.

    ACA was a poor substitute in the eyes of many, but was rationalized as something when there was nothing, and that something may be improved over time.  Medicare, too, it was said, was not built in a day.

    Well, now Ryancare is not to be considefed revolutionary, it is, at the least,  a starting point for discussion of the urgent need to do something about Medicare--as if elimination of Medicare is a good starting point for discussion of its strengthening.

    And, the Republican plan is to replace Medicare with Ryancare and replace ACA with--nothing.  The Democrats bind is apparent in that Ryancare and ACA are different but without a big distinction. The Ryan coupon becomes less valuable over time, but that is likely to be addressed by political realities, bringing it further into line with ACA.

    Ryancare offers no cost control other than self-denial of treatment on the basis of personal costs to be borne--which will ultimately increase costs and decrease health with absence of preventative care, delayed or sidetracked treatments and noncompliance with drug therapies.

    As for the "urgency" of dealing with Medicare now, and right now,  Ryancare  would start, if passed today, 11 years from now (for those now 54), but we need to act now on Medicare, an established program, because we have no time to spare.

    Here's the problem Donald: (5.00 / 3) (#19)
    by andgarden on Sat Jun 04, 2011 at 04:17:17 PM EST
    You spend much more time making predictions about what the ACA could be than defending what it is. In particular, neither you, nor Krugman, nor Bernstein has offered a convincing argument for why the exchange/subsidy model should work to reduce the cost of coverage. I think it's because you all know that, like Ryancare, it can't and won't.

    As for you predictions for the future, I hope you are right. But why didn't passing Medicare in the 1960s put us "in a much better position to achieve universal single-payer coverage," and what makes you think the ACA moves us further in that direction?

    Fervent amen (5.00 / 1) (#29)
    by gyrfalcon on Sat Jun 04, 2011 at 06:47:04 PM EST
    for this comment, Andgarden.

    Hmm (5.00 / 1) (#21)
    by Big Tent Democrat on Sat Jun 04, 2011 at 04:36:25 PM EST
    This is the defense?

    "Now that it's on the books, the ACA can be improved upon through amendment to single-payer/Medicare, once the public realizes and accepts that the original act is inadequate to the task."

    ACA needs a better advocate.

    Excellent rejoinder, Donald (5.00 / 1) (#22)
    by christinep on Sat Jun 04, 2011 at 04:48:00 PM EST
    Our family learned what you learned so personally--the deep learning of hard-hitting individual experience--through the sufferings of people like my dear sister. My sister not only suffered the physical sufferings of rheumatoid arthritis (compounded by a related blood clot caused btk amputation) but the demeaning, frustrating mental/emotional pain of fighting with insurance companies when hospitalizations were needed. She was not a wimp; and, in fact, grew to the strongest fighter I knew in life & with insurance companies. You overcame devastating disease to face the pre-ACA insurance world. From your compelling statement, your conviction about the needed change is clear.

    Like you, my family & I felt the reality of the earlier all-or-nothing with the too long limbo of waiting and working for some movement in the insurance field. We believed that single-payer or variation on expanded Medicare for all made the most sense. We came part of the way. Like you also, my experience mirrors what you said in your concluding paragraph. (For whatever reason, many people fear building something completely new...preferring, instead, to craft on to a familiar structure. IMO, that perception may well have been at core for the WH decision to go with the incremental route on the ACA.)

     It is strange for me to refer to why some firmly believe that we are closer than ever to the eventual expansion to single payer...some, as you & I, appear to believe it firmly; others reject it just as firmly. My guess is that as examples of positive change start to accumulate through anecdotal references, the hard divide between the two "beliefs" will start to soften.

    We might as well be arguing about (5.00 / 2) (#31)
    by Anne on Sat Jun 04, 2011 at 09:04:15 PM EST
    how many angels can dance on the head of a pin, that's how little difference I think there is between these two plans.

    The bottom line is that insurance companies will continue to be a barrier to care, they will continue to fight every single claim in the hope that more people will just go away at the first "no," and they will continue to rake in ungodly profits.

    But people will not be healthier, mortality rates will not improve, we will continue to spend more on health care than pretty much the rest of the developed world, costs will continue to be a drag on the economy; the "crisis" will rear its ugly head even before the 2014 implementation date - and then what?

    And what will be a real tragedy is if we manage to kill the only single-payer plan that we know works - Medicare - in sacrifice to the deficit hysterics.

    And all because the real goal was the preservation of the health insurance industry.

    Words pretty much fail me at the stupidity of the whole thing.

    And that's what I find so maddening. (5.00 / 1) (#33)
    by NYShooter on Sat Jun 04, 2011 at 11:28:27 PM EST
    Of course  there are many, many programs and policies  that could be enacted that would be far superior than the Obama Plan (No sense even mentioning the republican's)

    This administration doesn't want that. You are talking to the hand. That was true of the economic debacle, and its true of the health care monstrosity.

    Are we really insane? Having been back handed on every practicle, effective, and humane proposal suggested these guys are suddenly going to see the light?

    My God man, these are the guys that raped the very citizens in free fall to the tune of 800 billion dollars as a gift to the fat cats, with no strings attached! But you're going to convince them now to push programs that will reduce corporate profits?

    The country's on life support and both parties think it's a great idea to cram austerity onto bankrupt people. So far, there's been a net gain of about one million jobs. (burger flippers, but o.k.) The municipal employees these geniuses fired for the purpose of kick starting the economy has totaled 1.1 million.

    Yeah, go suggest programs to these people.


    So true, Anne (none / 0) (#35)
    by Amiss on Sun Jun 05, 2011 at 02:25:44 AM EST
    "The bottom line is that insurance companies will continue to be a barrier to care, they will continue to fight every single claim in the hope that more people will just go away at the first "no," and they will continue to rake in ungodly profits."

    I and many others go through this daily, plus the fact they hit when you are not able physically or mentally to fight. And Doctors are no better. I get billed for flu shots from Doctors that I have never received, get billed from Doctors that have only passed by my guerney and say "hi" and with deductibles through the roof, to boot.


    The bottom line (none / 0) (#37)
    by MO Blue on Sun Jun 05, 2011 at 07:36:03 AM EST
    The bottom line is that insurance companies will continue to be a barrier to care, they will continue to fight every single claim in the hope that more people will just go away at the first "no," and they will continue to rake in ungodly profits.

    What this POS health insurance legislation does is lower the acceptable standard actuarial of insurance policies. As stated the standard in the legislation is

    an "actuarial value" of at least 60 percent

    The average standard "actuarial value" prior to the start of this legislation was about 80%. Through eliminating good coverage policies by use of the excise tax and by the government setting the standard as a 60/40 split it will IMO soon become the accepted standard for all coverage.  


    And the waivers are piling up... (5.00 / 1) (#38)
    by Anne on Sun Jun 05, 2011 at 10:46:10 AM EST
    read about a bunch more in my state just this morning - some from large businesses and at least one union.

    When I think about one of the arguments for why we couldn't even talk about single-payer was the fact that it wasn't in the tradition of our "employer-based" system, I now have to wonder what the point is when you're going to grant waivers to some of the largest employers out there?

    We're going to be in worse shape, on so many fronts, by the time 2014 gets here, but the insurance industry will be bigger, stronger, more profitable and more powerful than ever.  

    I'm so tired of being treated as if I can't see, or can't figure out, that the industries that got us into this economic mess - the insurance industry, Wall Street and the banks - are the ones who have most benefited from the "reform" efforts of Democrats and the administration; if they think I'm going to reward that kind of political and economic malpractice, they are sadly mistaken.  Not that they care - there are enough voters out there who can be guilted, shamed and bamboozled yet again into voting for them; if that attitude had prevailed back in the day, we'd probably all be singing "God Save the Queen" instead of the "Star-Spangled Banner."


    Krugman (none / 0) (#1)
    by Militarytracy on Sat Jun 04, 2011 at 11:35:58 AM EST
    The last kid to get picked for debate team....where nerds rule :)  

    I dunno (5.00 / 1) (#9)
    by Big Tent Democrat on Sat Jun 04, 2011 at 11:59:27 AM EST
    He's got to defend a tough argument.

    Maybe the way to go with it would be to say the senior market is different than the ACA exchange market.


    I dunno either (5.00 / 2) (#16)
    by Militarytracy on Sat Jun 04, 2011 at 01:34:34 PM EST
    But the healthcare for profit model is imploding all over.  It certainly has imploded in Alabama.  And now there is a shortage of chemo drugs because the old chemo drugs aren't making the drug makers the big bucks that they want to see so they are simply choosing to not make them.  A recent report has facilities diluting dosages in order to treat as many people as possible.  We have arrived at the point of obviously killing people for profit verses the more hidden killing of the past.

    I've only seen one news report on the shortages though. Why?  Given America's fear of cancer I would think this is front page and front and center news.


    your post (5.00 / 1) (#20)
    by Madeline on Sat Jun 04, 2011 at 04:19:38 PM EST
    surprised me as I read nothing about it either. So I googled shortages on chemo drugs and....a couple of pages about shortages in every state about chemo drugs and specific need drugs of all kinds.

    Many explanations why they are not being produced from mergers to profits.

    Thanks for the post.


    What I don't understand (5.00 / 3) (#25)
    by gyrfalcon on Sat Jun 04, 2011 at 06:38:17 PM EST
    is how these people sleep at night.  How can you be in a decision-making position in one of these companies and just shrug your shoulders at this and say, Oh, well, tough tooties?  I seriously don't get it just as a human being.

    Why? (5.00 / 1) (#36)
    by Nemi on Sun Jun 05, 2011 at 06:13:37 AM EST
    I've only seen one news report on the shortages though. Why?  Given America's fear of cancer I would think this is front page and front and center news.
    Because there's so much more important stuff to cover first. Like, hmmm ... Weiner's junk twitter?

    Priorities, priorities ...


    BTW, do you have the nerve (none / 0) (#3)
    by andgarden on Sat Jun 04, 2011 at 11:42:22 AM EST
    to crosspost this?

    Sure (none / 0) (#6)
    by Big Tent Democrat on Sat Jun 04, 2011 at 11:57:24 AM EST
    Not really interested in doing so though.

    I've never found the discussion of health care policy there of much use. Have you?

    I don't post my economics stuff either.

    I do post foreign policy stuff on occasion.


    Canadian system / Us system (none / 0) (#23)
    by samsguy18 on Sat Jun 04, 2011 at 05:24:39 PM EST
    The Canadian healthcare/medicare system is cost centered with all most tertiary care done at the academic hospitals.
    Here in the USA the system is revenuue centered and procedure driven. The model must change !

    oops a few spelling and grammar errors (none / 0) (#24)
    by samsguy18 on Sat Jun 04, 2011 at 05:28:42 PM EST
    A little hot here today

    We all make them, guy (5.00 / 1) (#30)
    by gyrfalcon on Sat Jun 04, 2011 at 06:50:45 PM EST
    Seriously, unless the typo literally changes the meaning of what you intended, don't waste the bandwidth correcting or apologizing for it.  The apologies and corrections people post for typos are far more annoying than the typos themselves.

    As long as the post is understandable, no kidding, just get over it.  There are no copy-editors on comments sections, and not very many on blog posts themselves.