Magical Thinking

Why Paul Ryan is losing the argument

It always gets back to health care.

That's why 2009 and 2010 were so consumed by President Barack Obama's push for health-care reform, and why Rep. Paul Ryan's Medicare proposals [.pdf] are at the center of politics in 2011. Our long-term budget problem is primarily about two things: a shortage of revenue and rising health care costs.

The revenue and health-cost issues are intertwined. The whole debate comes down to whether we want government to absorb a significant part of the risk of insuring us against illness, which means we'll have to pay somewhat higher taxes, or whether we want to throw more and more of that risk onto individuals.

So let's welcome Ryan's call for considering his proposals on their merits. Yes, Republicans who invented "death panels" out of whole cloth and insisted, falsely, that Obama's health proposal was nothing but a "government takeover" have a lot of nerve complaining about the "demagoguery" against Ryan.

But in this case, turning the other cheek is practical advice. Ryan is not losing this argument because of what his opponents are saying, or because voters don't "understand" what he's up to. He's losing because Americans are alarmed that they are paying ever more for coverage, co-pays, and deductibles. And they're weary of battling over health bills with insurance-company bureaucrats.

Americans may not trust government, but they don't trust insurance companies much either. So it should surprise no one that they are skeptical of any proposal likely to reduce the insurance guarantees the government already provides them. In particular, they don't want government to back away from its existing health-care commitments if part of the purpose of retreating is to protect the Bush era tax cuts for the wealthy.

Among Ryan's critics, everyone acknowledges that rising health-care costs are a problem. One of the central purposes of the Affordable Care Act was to contain those costs. The reform cut Medicare spending by a half a trillion dollars over a decade--spending reductions that Republicans freely demagogued in last year's election campaign.

Here's the basic difference before us: Conservatives want government to play less of a role in paying for health insurance. Progressives believe that government will inevitably play a growing role in the provision of health insurance because if it doesn't, more Americans will lose their coverage.

The progressive view is not a theory. It is what experience has taught in other wealthy democracies, and in our own country, too. The enactment of Medicare was an admission that most senior citizens simply could not afford health coverage without government help. What was true of seniors in 1965 is now also true of many non-elderly Americans.

Ryan and his allies seem to believe that there are some magical things the free market can do in the United States that it hasn't done anywhere else in the world. I suspect he really believes this. I don't see why the rest of us should.

The "premium support" idea Ryan touts might be defensible if it were part of an effort to insure everybody; if we could enact stringent regulations to prevent insurance companies from gaming the system; if the government provided subsidies large enough to make insurance affordable; and if there were a public option as an alternative to private insurance. That's a lot of ifs.

Yes, both the 2010 health-care law and Mitt Romney's reform in Massachusetts improved the current system and rely in part on premium support without a public option. What made them improvements, though, was not premium support as such. They made things better because they extended coverage to a large number of previously uninsured citizens. These advances do not justify junking Medicare--and, by the way, both plans would be better still if they had a public option.

By contrast, the Ryan plan actually reduces coverage because it cuts Medicaid and repeals the 2010 reform. It provides neither enough subsidies nor a government option. It will likely increase the cost of covering seniors, since Medicare has lower overhead costs than private insurers and much greater bargaining power with providers.

Thus our choice: Government can keep its current promises, undertake the complicated and often frustrating work of bringing health costs under control, and work for the day when everyone has health insurance. Or it can ask individuals to carry an ever-heavier load, expect invisible hands to perform miracles, and leave Americans to take their chances with the insurance companies. I think I know how this debate will come out.

Related: Class Warfare, by E. J. Dionne Jr.