For Republicans, a funny thing happened on the way to privatizing Medicare. Hoping to transform the wildly popular, low-overhead government program for 46 million American seniors into a voucher system for purchasing private insurance, Paul Ryan and his GOP allies inadvertently made a strong case for the Affordable Care Act for everyone else.
A little background helps explain the conservative conundrum. Back in April 2009, 137 House Republicans voted for an alternative budget including a proposal from Ryan which "called for "replacing the traditional Medicare program with subsidies to help retirees enroll in private health care plans." Then is his Roadmap for America's Future, Ryan formally laid out his plan to "voucherize" Medicare, in which future beneficiaries would be given a fixed sum to buy health coverage from private insurers. (Because the rate of growth in the value of the vouchers would be capped even as health care costs were not, as the Washington Post's Ezra Klein rightly concluded a year ago, "this is rationing, and that's not a slur.")
But in the latest incarnation of the voucher scheme jointed proposed by now House Budget Committee Chairman Paul Ryan and Alice Rivlin of the Bipartisan Policy Center's deficit reduction panel, the rationale for upending Medicare may ring a bell for supporters of last year's health care reform law. As Klein summed it in December:

Under the Ryan-Rivlin plan, the current Medicare program is completely dissolved and replaced by a new Medicare program that "would provide a payment - based on what the average annual per-capita expenditure is in 2021 - to purchase health insurance." You'd get the health insurance from a "Medicare Exchange", and "health plans which choose to participate in the Medicare Exchange must agree to offer insurance to all Medicare beneficiaries, thereby preventing cherry picking and ensuring that Medicare's sickest and highest cost beneficiaries receive coverage."
Sound familiar?

In her interview with Klein on Monday, Rivlin (who also supports the Affordable Care Act passed last year) concurred with his assessment:

"The objective," Rivlin told me, "is to get genuine competition on an organized exchange among comprehensive health plans so they will compete and arguably produce better health care for less money."
What's odd about the right's embrace of Ryan-Rivlin is that the plan basically turns Medicare into the Affordable Care Act. It's the same idea -- regulated exchanges offering certified insurance products populated by subsidized buyers. If Ryan-Rivlin will unleash ferocious innovation that holds costs down, then so too should the Affordable Care Act. So at the end of our conversation, I asked Rivlin, who supported PPACA, if I was missing something. She laughed. "I keep talking to Paul and trying to convince him of that," she said. "But even if he agreed with me, he couldn't say so."

With its comparatively miniscule administrative overhead, Medicare is already cheaper than private insurance. But if Ryan's model of the elderly purchasing coverage from an exchange of private insurers will make it cheaper still, then the Republicans' reviled Obamacare would have precisely the same effect. "If you believe this logic," Klein concluded, "the Affordable Care Act is a great bill that will save much more money than CBO currently assumes." [Italics his.] (Instead, Ryan's Young Guns co-author Eric Cantor called the CBO's deficit-cutting estimates for the Affordable Care Act "budget gimmickry.")
Of course, the only reliable cost savings from the Ryan-Rivlin plan come not from market competition, but from the cap on the growth in the value of those vouchers. Again, Klein from this morning:

Ryan-Rivlin only survives if it holds cost growth to the rate of GDP growth plus one percentage point. If it doesn't, then the subsidies offered by Ryan-Rivlin quickly become inadequate -- and no one is going to allow Medicare to stop paying for the health-care costs of seniors.

Well, that it in essence is exactly what Ryan's amen corner is proposing. As the chart above shows, the rising cost of private health insurance has far outstripped U.S. economic growth. Last February, Ryan admitted as much, protesting that:

"Rationing happens today! The question is who will do it? The government? Or you, your doctor and your family?"

(Given Republican orthodoxy, it's no surprise that Ryan left out the real culprit - the private insurance market.)
For their part, conservatives have largely avoiding confronting their cognitive dissonance on health care policy. (The National Review's Reihan Salam at least tried - and failed - by proposing the counterfactual that we never would have set up Medicare as it currently operates had we known what it would cost.) Whereas advocates of single-payer for all are basically extrapolating from today's Medicare model, Republican cheerleaders of privatizing Medicare can't admit their logic necessarily provides a powerful argument for the Affordable Care Act they so hate.