The Internet is abuzz with the rumor that Paul Ryan wants to reintroduce pre-existing health condition denials of insurance into the American health care system. In fact, that's not the plan. But has Ryan finally figured out a way that the Republicans can attack Obamacare in a way that sticks?

Reuters reports:

U.S. House of Representatives Speaker Paul Ryan called on Wednesday for an end to Obamacare’s financial protections for people with serious medical conditions, saying these consumers should be placed in state high-risk pools.

In election-year remarks that could shed light on an expected Republican healthcare alternative, Ryan said existing federal policy that prevents insurers from charging sick people higher rates for health coverage has raised costs for healthy consumers while undermining choice and competition.

Not so long ago, in the so-called individual market for insurance (for people who did have their insurance provided by their employer) there was something called “pre-existing conditions.”  A pre-existing condition was anything that the insurance company determined would cause a person to use more than minimal benefits in the future. This could be things like a previous cancer or a previous heart problem. But it could also be for things that a person suffered, had treated, and now was cured of.

The pre-existing condition exclusion was eliminated by the ACA (or Obamacare), which is one of the main reasons millions of people are now able to buy insurance. The pre-existing condition exclusions were considered wildly unfair by most reasonable people of all political parties; this has been one of the main reasons the Republicans have been unable to repeal Obamacare, since a repeal would reintroduce those exclusions.

But Clever Paul Ryan may have found a way around this.

His plan is not to eliminate insurance for people with pre-existing conditions, but to putt anyone determined to be "high risk" into their a separate group. This group would be excluded from Obamacare and instead placed in "‘high-risk pool" insurance programs that would be administered by the states. Ryan claims that, with these people eliminated from Obamacare, the healthier people who remain in the program would pay lower premiums, since they require fewer medical services. Yet the high-risk people would still be insured.

Clever Paul Ryan is hoping that people won’t see what’s really going on. He claims that his proposal would save money. In fact, there’s no reason to believe it would. The state pools would be funded, at least in part, by the federal government. So while premiums would fall for people still in Obamacare, taxes would rise by about the same amount to pay for the new high-risk insurance system. Really, the Ryan plan doesn’t affect expenses; it just plays around with the payment structure.

But politically, this move would do a lot for Ryan. First, while premiums might go down for the people still in Obamacare, they probably will not go down to the degree that they should once the entire expense of the high-risk policy holders is removed. So the insurance companies will benefit from this—and, believe me, they are anxious to make back the money they've been losing on the ACA. For those who continue to get their insurance throught the exchanges set up by Obamacare, they are not supposed to notice that as their premiums go down their taxes will go up. They are also not supposed to notice that, should they get a serious illness, they could lose Obamacare themselves and be placed in a state high-risk pool.

Why should they care? Because if the seriously ill are moved to state risk pools, these will probably not be fully funded by the federal government. They will be funded instead by block grants that will cover only part of the expense, with the states having to cover the rest. The poorer (or redder) states, unwilling or unable to raise taxes to cover the new expense, will instead lower benefits. And this will mean that the sicker you get, the poorer your benefits will become.

Ryan’s cynical plan is meant to curry favor with the healthy majority at the expense of the sick minority, in the hope of advancing Republican political power. His plan supports business (especially the insurance business, which will now have that mythical beast it keeps talking about: “The Stable Market”) and anyone lucky enough not to have had serious health problems (yet). It will be good for everyone except those who need health insurance the most. Presented as a win-win solution, it is, at best, win-win-lose.