The exchange on Medicare may have been the most substantive and interesting part of the Vice President debate last Thursday night. Paul Ryan explained that the Obama administration’s robbing of Medicare Advantage to pay for Medicaid expansion would accelerate the bankruptcy of Medicare, while Joe Biden in one of his calmer moments attacked Ryan for proposing a “voucher” program. Biden claimed to have the support of the AMA in opposing free-market-based reforms such as Ryan’s proposal uses, and dramatically asked, “Who [will] you believe, the AMA, me?”
Like so much of what Biden had to say — when he was actually saying something, rather than just grinning, laughing, and grunting into his microphone — this turns out to be false. Avik Roy at Forbes reports that a key committee of the American Medical Association just endorsed the use of “defined contribution” plans as a reform path for Medicare — the very same mechanism contained in Paul Ryan’s plan, the one derided by Biden as a “voucher” plan:
I’ve had my disagreements with the AMA, which like its cousin the AARP, generates hundreds of millions of dollars in income from our existing, wasteful health-care system, and often stands in the way of needed reforms. But this past weekend, the AMA’s key policy committee, the Council on Medical Service, voted to endorse a Medicare reform planthat shares key traits with the ones put forth by Mitt Romney and Paul Ryan.
“The [AMA] policy identifies changes that must be made to strengthen the traditional Medicare program (i.e., restructuring beneficiary cost-sharing, including modifying Medigap rules, and changing the eligibility age to match Social Security),” the Council writes, “and expresses support for giving beneficiaries a choice of plans for which the federal government would contribute a standard amount (i.e., a ‘defined contribution’) toward the purchase of traditional fee-for-service Medicare or another health insurance plan approved by Medicare. The Council firmly believes that implementing a defined contribution system, with strong regulatory protections for patients, is a responsible and feasible approach to strengthening the Medicare program.”
Much like the old Ryan plan, the AMA proposal would let the government provide a specified subsidy—the “defined contribution”—to retirees’ health benefits, and let them choose among a range of plans. Unlike the old Ryan plan, but like the current Romney-Ryan one, the AMA committee endorsed preserving “traditional Medicare as an option” for seniors.
Wow — I just bet that Mitt Romney used his vampire-capitalist money to pervert the AMA’s Council on Medical Service. He sent Grover Norquist in there with his toxic Taxpayer Pledge, didn’t he? Er … not exactly:
The AMA Council’s report states that it came around to this view not at the behest of Republican operatives or candidates, but after speaking with Bill Clinton’s former budget chief, Alice Rivlin, who along with Paul Ryan proposed a version of this plan. “Dr. Rivlin emphasized that defined contribution amounts should be sufficient to ensure that all beneficiaries could afford to purchase health insurance coverage, and that private health insurance plans should be subject to regulations that protect patients and ensure the availability of coverage for even the sickest patients.”
The AMA Council has somewhat different ideas on how to implement this kind of plan than Ryan does. They want less control on premium costs, for one thing, which would eventually force doctors to get paid less for their services, as Roy notes in his thoughtful analysis. But the core of their plan has the same mechanism as Ryan’s does — the federal exchange system that allows private-sector insurers to compete for Medicare customers, while keeping traditional Medicare as an option for those consumers who want it. In fact, that’s exactly the same mechanism that ObamaCare uses at the state level, a point that seems to have escaped Biden’s notice during all of his grunting and grinning on Thursday night.