Perrspectives - Bringing light to Darkness

Ryancare and Obamacare Both Require Individual Mandate

March 25, 2012

As the Supreme Court this week begins to consider the fate of the two-year old Affordable Care Act (ACA), ironies abound. For starters, while health care is worst in Republican red states, its improvement will be underwritten by blue state taxpayers. The virtually identical law in Massachusetts has been wildly successful and wildly popular. Meanwhile, Social Security and Medicare already mandate that Americans purchase retirement security and health insurance, required product purchases Republican free-marketeers want private providers to sell instead. And now with their latest plan to privatize Medicare, Paul Ryan and his GOP allies are proposing to do for America's seniors almost exactly what the dreaded Obamacare would do for the uninsured.
Last spring, 235 House Republicans and 40 GOP Senators voted to ration Medicare, converting guaranteed government insurance into under-funded vouchers and leaving the elderly to the mercy of the private market. Ironically, the Washington Post's Ezra Klein noted at the time, is that Ryan and his conservatives claimed his plan would lower costs while Obamacare would not:

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 [the Ryan plan] will unleash ferocious innovation that holds costs down, then so too should the Affordable Care Act.

Now, a year after Ryan 1.0 was rightly blasted for ending Medicare as we know it, the House Budget Chairman is back with a revised version. As ThinkProgress explained, "Beginning 2023, the guaranteed Medicare benefit would be transformed into a government-financed 'premium support' system." Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or traditional fee-for-service Medicare." Nevertheless, Ezra Klein documented, Ryancare and Obamacare still look similar:

Let's play a game. I'll describe a health-care bill to you. Then you tell me if I'm describing President Obama's Affordable Care Act or the budget released this week by Rep. Paul Ryan (R-Wis.).
The bill works like this: The federal government subsidizes Americans to participate in health insurance markets known as "exchanges." Inside these exchanges, insurers can't discriminate based on pre-existing conditions. Individuals can choose to go without insurance, but if they do so, they pay a penalty. To keep premium costs down, the government ties the size of the subsidy to the second-least-expensive plan in the market -- a process known as "competitive bidding," which encourages consumers to choose cheaper plans.
This is, of course, a trick question. That paragraph describes both the Affordable Care Act and Ryan's proposed Medicare reforms. The insurance markets in both plans are essentially identical. And for good reason.

In a nutshell, what Democrats have done for Americans under age 65 is what Paul Ryan wants to do only for those over age 65. (Arguably, Ryan's plan does more by continuing to offer traditional Medicare as a "public option.") But as Klein also emphasizes:

There's an added complication for Republicans. They have assumed huge savings from applying the exchange-and-subsidies model to Medicare. But they don't assume -- in fact they vehemently deny -- that those same savings would result from the identical policy mechanism in the Affordable Care Act. The Democrats haven't assumed significant savings from the exchange-and-subsidies model in either case.
If the concept works as well as Ryan says it will, then the Affordable Care Act will cost far, far less than is currently projected. There's no compelling reason to believe competitive bidding will cuts costs for seniors but fail among younger, healthier consumers who, if anything, are in a better position to change plans every few years and therefore pressure insurers to cut costs.

Make that a second complication. The first is this. Despite all of thei right-wing rhetoric that "ObamaCare is a cancer in our government" and the individual mandate "endangers individual liberty," the Ryan House GOP budget plan for Medicare similarly features much the same requirement. As Klein pointed out above, "Individuals can choose to go without insurance, but if they do so, they pay a penalty."
Of course, they do today. If you're rich like Mitt Romney, you can opt out of Social Security and Medicare. But if you refuse the mandate to fork over your payroll taxes for Social Security and Medicare, you could face fines, prison or, in the case of employers, see your assets seized and your company shut down. (The IRS web site offers plenty of examples of what happened to those scofflaws who tried to evade that requirement.) As the New Republic's Jonathan Cohn highlighted last week ("If Medicare Is OK, Obamacare Should Be Too"):

In principle, is the basic obligation that comes with health care reform--to pay for a mutual protection scheme that some individuals might not find advantageous or desirable--really so novel?
Hardly. It's an obligation most of us meet on a regular basis, every time we get a paycheck.
I'm speaking, of course, about Social Security and Medicare. Each program is a form of "social insurance" and each serves the same basic function: To protect us from financial shocks that we cannot anticipate or avoid. With Social Security, the shock is reaching retirement without enough income. With Medicare, the shock is high medical bills during old age. During our working years, we pay into these programs by handing over portions of our incomes, in the form of payroll taxes. And we don't have a choice about it, unless we want to start evading taxes.

Whatever you call it, the penalty for failing to obtain health insurance now mandated under the Affordable Care Act is little different from than paying into Medicare and Social Security. (As Klein put it, "I don't believe our forefathers risked their lives to make sure the word 'penalty' was eschewed in favor of the word 'tax.'") And the same Republicans who denounce Obamacare for forcing uninsured Americans to buy a product from private providers would do the same for Medicare and Social Security alike. As for Paul Ryan and his proposed insurance mandate for the future elderly, House Speaker John Boehner acknowledged last year:

"It transforms Medicare into a plan that's very similar to the President's own health care bill."

Sadly, the ironies wouldn't end there. If the House GOP budget became law, don't expect Republicans to take Ryancare to the Supreme Court.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

Follow Us

© 2004 - 
 Perrspectives. All Rights Reserved.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram