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Washington Post columnist Robert Samuelson isn't exactly a conservative, which is why it's worth paying attention when he says something like this:
It is only a slight exaggeration to say that unless we end Medicare “as we know it,” America “as we know it” will end.
Now, it's been said before that Samuelson is pretty predictable when it comes to deficits and America's aging population, and so some would say his view on Medicare is unsurprising. Today's column is worth reading in its entirety, however, for the various points it makes.
But there's one simple point in particular that hasn't been made enough in the Medicare debate (outside the beltway) and so is worth highlighting. Critics of the GOP/Ryan plan commonly assume that health care costs will rise faster than the plan's subsidy (premium support), but those critics don't factor in what the introduction of a subsidy would do to costs. The assumption underlies the CBO's projections, which people use to say Ryan's plan won't work. Samuelson writes:
The CBO may be wrong. When a voucher system was adopted for Medicare’s new drug benefit, the CBO overestimated its costs by a third; the Centers for Medicare and Medicaid Services’ overestimate was 42 percent. When fundamental changes are made to a program, the green-eyeshade types can’t easily predict the results.
The point here is that the analysts and experts overestimated their cost projections (by a long ways) because they underestimated the effect of the policy on costs. The same thing is likely happening when people criticize the GOP/Ryan Medicare plan.
Samuelson says "it’s Ryan’s radicalism vs. President Obama’s tinkering." Well said.
Anytime the "tinkerers" start saying Ryan's defined contribution approach won't keep apace with costs, ask them to explain why what happened with the prescription drug program won't happen here. And then ask them how trying to control costs on the back end will work when it has never worked before.
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