Rep. Paul Ryan of Wisconsin, the ranking Republican member of the U.S. House Budget Committee, has introduced a bill supporting universal health insurance access through a major restructuring of the tax code. The proposal has garnered major criticism from the White House and supporters of universal health care while earning praise for offering an alternative to previous bills which could slow projected annual increases in government spending.
Ryan’s bill, which he calls “Roadmap for America’s Future,” seeks to shift health coverage ownership away from employers and governments and into the hands of individuals. The plan includes major reforms of Medicare and Medicaid, paired with broader reforms of the income tax, business taxes, and Social Security.
President Obama referred to Ryan’s plan specifically during a January 29 meeting with the House Republicans, calling it a “detailed” and “legitimate” approach to reform, while noting his disagreement with it. The bill was formally introduced on January 27.
Refundable Tax Credits
Ryan’s plan calls for a refundable tax credit of $2,300 for individuals ($5,700 for families) to buy health insurance, not just within their own state but across state borders as well. The insurance would be purchased on an individual basis, rather than an employer-based plan, making it fully portable.
His plan also calls for transparency of health care prices and data while setting up state-based health care exchanges. It would allow small businesses to pool their employees’ health care plans nationally, and would help states through auto-enrollment programs and high-risk pools.
“The most ideologically driven policy the President and Congress have pursued threatens to further encumber and distort America’s health care sector, and intrude even more deeply into this most valued, most sensitive, and most personal of services,” Ryan writes in an introduction to his plan. “The legislation increases government’s leverage in deciding which medical treatments are worth paying for and which are not. It imposes government control over physicians’ medical decisions, and causes private-sector insurers to limit coverage in line with the government’s choices. Whether directly or not, it will effectively bind all Americans to a “one-size-fits-all” national managed care program that disregards personal choice and compassionate care.”
Accusations of Destroying Medicare
Office of Management and Budget director Peter Orszag, a critic of Ryan’s plan, noted a key disagreement on a recent conference call with reporters.
“[Ryan] has put forward an interesting plan. There are many aspects of that that are worthy of further discussion and debate, but it is a dramatically different approach in which much more risk is loaded onto individuals and in which the Medicare program in particular is dramatically changed from its current structure,” Orszag said.
Under Ryan’s plan, Medicare beneficiaries under 55 would receive a means-tested Medicare payment to use in the individual private insurance market. Orszag and other opponents of Ryan’s plan claim this payment won’t be enough to keep up with rising health care costs, even though the payment amount is tied to inflation.
Ryan acknowledges Medicare costs will grow more slowly under his plan, he says that’s the point behind the roadmap. Without reform, he argues, Medicare will go bankrupt within the next several years.
Critics have also attacked the plan because the Congressional Budget Office (CBO) did not score the revenue side of the Roadmap. Supporters responded by noting economic volatility makes it nearly impossible to predict revenues for a particular year, so the CBO used the historical average of 19 percent of Gross Domestic Product in their report, in lieu of scoring.
Seen As Pro-Market
According to Grace-Marie Turner, president of the Galen Institute, Ryan’s Roadmap answers those on the left who criticize the right for failing to offer policy alternatives for reforming health care.
“Paul Ryan has a plan that deserves to be taken seriously, that offers a vision for reform, and that would take years to pass and implement,” Turner said. “He and the next generation of political leaders can prevail in advancing real change if they engage a much more informed electorate in a serious debate about policy challenges and alternatives.”
Reduces Growth of Government
“Ryan’s legislation creates a 21st century plan for reforming tax policy, Medicare, Medicaid, and Social Security. It has been scored by the CBO as putting entitlement programs and the federal budget on a sustainable path, reversing the tsunami of red ink facing the next generations and creating dramatic economic growth,” says Turner.
Michael Cannon, director of health policy studies for the Cato Institute, a libertarian think tank in Washington, DC, says Ryan’s proposal is a key first step.
“Ryan’s Roadmap would expand government in some areas, but on balance would dramatically reduce government’s growth over time,” Cannon said. “He deserves praise for being the only politician in Washington to lay out a plan for dealing with the federal government’s structural and budget deficits. That makes him the only grown-up in Congress.”
Weekly Standard: Paul Ryan’s Express, by Matthew Continetti: http://www.weeklystandard.com/articles/paul-ryan%E2%80%99s-express
Newsweek: Don’t Patronize the American People, by Paul Ryan: http://www.newsweek.com/id/233915
National Public Radio: Ryan on Budget Blueprint: http://www.npr.org/templates/story/story.php?storyId=123575258
Political Punch Podcast: Ryan on Health Care Reform and the Deficit: http://blogs.abcnews.com/politicalpunch/2010/02/political-punch-podcast-rep-paul-ryan-rwisc.html
Washington Post: Ryan Tackles Obama’s Path to Fiscal Disaster, by Michael Gerson: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/09/AR2010020902464.html
Budget Committee: Paul Ryan’s Roadmap for America’s Future http://www.roadmap.republicans.budget.house.gov/Issues/Issue/?IssueID=8516