Paul Ryan Medicare Plan: The Truth About the Path to Prosperity

Republicans are trying to distance themselves from it, and Democrats want it on the mind of every voter come November -- it’s “The Path to Prosperity: Restoring America’s Promise.” More commonly known as the Ryan budget or Ryan plan, this proposal has become the focal point of the 2012 presidential election overnight now that Congressman Paul Ryan is on the GOP ticket alongside former Massachusetts Governor Mitt Romney.

First and foremost, the inclusion of Ryan shows the failure of Romney’s 2.0 campaign (1.0 being his successful work during the primaries) in its attempt to make the November election a choice between President Barack Obama’s economic struggles and the generic alternative. Following a summer where the Romney camp never found traction in the polls, however, a change became necessary and Ryan was the answer; giving life to Romney 3.0.

The immediate implication is that Ryan energizes the conservative base of the GOP while providing welcomed fervor for Democrats.  

Almost everyone seems to be happy with the choice.  

On the other hand, the decision puts policy issues in the talking points of both campaigns instead of biographies, and policy issue number one has become Ryan’s proposed future for Medicare.

Everyone seems to understand this plan correctly, but in their own way.

Looking to the Ryan budget itself, a middle ground, something absent from the political process during the last four years, is found. The difficult part is identifying what exactly the budget proposes to do.  Analytically, Ryan makes his vision clear as he outlines exactly how his changes to Medicare will be a paragon of fiscal responsibility. Empirically, Ryan’s claims go unwarranted, a sentiment shared by the Congressional Budget Office.

Reviewing what is on the table, Ryan continues status quo. Medicare coverage for those born after 1957 sets a $7,500 government spending cap for post-2022 beneficiaries (which would increase based on nominal GDP growth plus 0.5 percent), and raises the recipient age to 67 -- leaving a question over what happens to those among the gap years according to the CBO. None of this is the subject of more in-depth analysis by the CBO, however, because Ryan’s budget essentially stops here. Instead, the CBO can only offer future forecasts, such as the prediction that 91% “of Medicare beneficiaries would be subject to spending restraints,” by 2050.  The same year,  Medicare would make up 4.75%of GDP.

So what does the world look like for Medicare recipients in 2022?

Initial conclusions drawn by the CBO illustrate a pretty grim picture for everyone. Conservatives will be disappointed to know that the government is going to pay just as much toward its beneficiaries' health care costs, as it would, through Medicare under current law.  And everyone else will be upset at the fact that beneficiaries' will pay more than twice as much under the Ryan plan compared to traditional Medicare. (The CBO found this by adding together premium and out-of-pocket spending in 2022.) Vouchers are never mentioned in any CBO analysis of the Ryan plan.

Expanding on this increase in beneficiary spending further, the CBO explains that the cost of privatized plans exceed public sector ones, and because the growth rate of health care costs outpace Medicare contribution increase rates from the Ryan plan.

To be fair though, the Ryan plan does offer larger subsidies for low-income Medicare recipients, but the plan did not give enough details for the CBO to analyze it. Furthermore, it also gives the option of using its contributions for premiums or a public option.

Paul Ryan’s intentions aren’t as malicious as Democrats insist, but his plan isn’t as substance-rich as Republicans believe either. 

In reality, the Ryan plan is much more of a manifesto than an actual bill.

How much do you trust the information in this article?

Matthew Gross

Texas native in his junior year studying International Affairs at The George Washington University's Elliott School of International Affairs where he concentrates on International Politics and Latin America.

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