Ryan misses the mark

Modern Healthcare - - OPINIONS LETTERS -

Re­gard­ing “Ex­clu­sive in­ter­view: Rep. Paul Ryan dis­cusses need for ‘mar­ket­based’ health re­form” (Mod­ern­Health care.com, Aug. 14), Rep. Ryan’s pre­mium sup­port pro­posal as a so­lu­tion to Medi­care’s fi­nan­cial prob­lems misses the mark. All such sub­si­dies, whether they are pre­mium sup­ports or tax cred­its, serve to drive prices higher, not lower.

While this pro­posal has the ini­tial ef­fect of low­er­ing the gov­ern­ment’s Medi­care out­lay from $15,000 per ben­e­fi­ciary to $9,500, it is only a mat­ter of time un­til in­fla­tion ad­just­ments bring the out­lay back to its orig­i­nal level, pre­sum­ing the pre­mium sup­port is not capped at some ar­bi­trary level in the fu­ture.

The amount the pre­mium sup­port falls short of pro­vid­ing a Medi­care-equiv­a­lent ben­e­fit shifts cost from the pub­lic to the pri­vate sec­tor, and a capped pre­mium sup­port would re­sult in a much larger shift as there would be no off­set­ting in­fla­tion ad­just­ment.

Im­pos­ing the pre­mium-sup­ported ben­e­fit pack­age as the sec­ond low­est in a re­gion will set a floor be­low which few, if any, com­mer- cial car­ri­ers would be will­ing to go. How does this cre­ate mar­ket com­pe­ti­tion?

Pre­mium sup­ports do not re­duce health in­sur­ance pre­mi­ums. They nei­ther lower the cost of health­care, nor avoid higher deficits/taxes. Pre­mium sup­ports are lit­tle more than an in­ter­est­ing ap­proach to kick­ing the can a bit fur­ther down the road.

Dave Clu­ley Grand Rapids, Mich.

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