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Ryan on health care, Medicare, and fiscal responsibility

Mitt Romney’s naming of Wisconsin Rep Paul Ryan (R) as his running mate will place Ryan’s record under a microscope. That doesn’t mean most observers will understand, or realize the implications of what they see.
Before we take our turn at the viewing lens, a couple quick points.
1. I have NO problem with politicians advocating unpopular positions. They often cause the rest of us to rethink our positions and challenge commonly-held opinions.
2. I agree – absolutely – with the need to rein in entitlement spending.
3. I’m sure all of us abhor hypocrisy, particularly when it involves flip-flopping on political issues to gain votes.
Ryan has become the darling of conservative intellectuals for his “bold” budgetary proposals and willingness to “take on entitlement spending”, as well as his plan to slash taxes, particularly on investment income.
It’s one thing to advocate policy, come out with plans and proposals. To really understand a politician it is best to examine their record – so that’s what we’ll do.
We’ll start with the biggest expansion of entitlement spending since 1964 – Medicare Part D.
Eight years ago Ryan and the GOP passed the Medicare Part D drug benefit with no dedicated financing, no offsets and no revenue-generators. Three-quarters of the ultimate cost – which is now around nineteen trillion dollars – was simply added to the federal budget deficit.
The latest Medicare Actuaries’ report states the “estimated present value of Part D expenditures through the infinite horizon of $19.2 trillion, of which $9.1 trillion would occur during the first 75 years.” (see page 129)
I’d note that Ryan’s recent budget proposals and speeches are silent on Part D’s ultimate cost, funding, and impact on the deficit. At least I couldn’t find any references. The comments I could find touted the decline in projected costs – in fact, cost projections have come down over the last couple years – which is a good thing. However, unless they come down to zero – a long way from $19 trillion to be sure – the fact is Ryan voted for a huge expansion in entitlement spending and continues to stand behind that vote.
Squaring that position with Ryan’s current status as a budgetary hawk is going to be a bit of a challenge…
There’s just a little more. Ryan also voted against allowing the Feds to use their bargaining power to negotiate drug prices for Part D, a move that would have reduced costs by about $20 billion per year.
In a 2006 House analysis, a report “showed that under the new Medicare plan, prices for 10 commonly prescribed drugs were 80% higher than those negotiated by the Veterans Department [emphasis added], 60% above that paid by Canadian consumers and still 3% higher than volume pharmacies such as Costco and”
Another study indicated “An annual savings of over $20 billion could be realized if FSS [Federal Supply Schedule] prices could be achieved by the federal government for the majority of drugs used by seniors in 2003-2004…”
That’s defensible – perhaps – from a purely ideological position. It provides useful insight into Ryan’s priorities; when balancing his political ideology and, one might argue political expediency against an avowed commitment to budgetary discipline, the budget appears to lose.

One thought on “Ryan on health care, Medicare, and fiscal responsibility”

  1. I could not agree with you more. One of the reasons Obama got his chance was the fact that the Republican party was bouncing checks all over town. I wonder if this issue will be brought up in debate?

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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