Thursday, April 14, 2011

The important question on the Paul Ryan plan

Most of the attention surrounding Paul Ryan's budget plan has centered on the change of Medicare to a voucher.  Basically, a cash payment that can be used to purchase health insurance.

Critics argue that the value of the vouchers will not be enough to pay for the level of medical services that current beneficiaries enjoy and that this is shifting the risk of escalating costs away from the government and on to seniors.  I think it is hard to argue with that description, so the question is:

Do you think senior citizens should be shielded from 100% of the risk of high health care inflation?

I don't know the history of Medicare well enough to say for sure, but I would be surprised if that was the program's original intent.  Regardless, if you think the answer to this is yes, you need to start advocating for higher taxes now, and not just on millionaires. Projections have Medicare, Medicaid, Social Security, Defense and debt payments eating up the entire federal budget in the not too distant future.

The marginal tax rates required to keep up with Medicare costs are likely to be politically impossible.  That means not only widening the group affected by higher rates, but probably reducing or ending some very popular tax expenditures, like the mortgage interest deduction. Wisconsin's progressive hero Russ Feingold couldn't even withstand contemplating such an idea during his 2010 campaign.  This despite the fact that the evidence clearly shows the MID disproportionately helps the wealthy (how's that for progressive?).  If Feingold couldn't campaign on a high tax/high services platform, what Democrat can?

For the record, I think using competitive pricing to determine the value of the vouchers has the potential to address the concern about shifting risk to seniors and harness the power of the market.


Dean Weichmann said...

Ya know, I wonder why the MID would disproportionately help the wealthy? If that is so.... why not limit the max amount allowed as MID therby limiting this help to the people with smaller homes?

What has that to do with whether seniors or anyone else should be provided with health care? Vouchers is a piss poor way to reduce expenditures. It is mainly a way to give insurance more business.

Medicare for all is a more efficient way to provide health care and provide for the common good. Eliminate or at least reduce insurance.

Jeremy R. Shown said...


I appreciate the fact that you support Medicare for all. It is an idea that has its adherents.

Care to let us in on how you would pay for such a plan? Any thoughts on how much tax $$ you would have to raise and how you would raise it? Even if it is more efficient than the current system, it's not free.

Dean Weichmann said...

Jeremy, you seem to miss the point. Of course taxes must be collected to pay for services provided such as medicare. Why is it better to pay more to insurance companys than taxes?

The point is that these services are provided in other countries for about half the cost we pay, in large part due to the insurance system we have developed here. For the common good a single payer system of some sort would be better than what we have now.

Should we avoid a more efficient system simply because it would be government run or administered?

You ignored my comment on MID, why?

Jeremy R. Shown said...


I wasn't ignoring your question on the MID. Haven't we already had this discussion, or am I mistaken? Anyway, you should ask Russ Feingold why we don't limit the MID. He attacked Ron Johnson for even suggesting we consider modifying the MID.

While you're at it, ask Harry Reid why we don't means-test Social Security. He doesn't think SS should be part of the conversation, so I guess we will keep sending checks to rich seniors. That doesn't sound very progressive.

WRT Medicare for all, I'm not sure it is as efficient as you think. If Medicare is so efficient, why is it such a driver of our longer term deficit?

Again, please point me to some major political figure that has outlined a plan for raising the money to pay for Medicare for all, if such a person exists. I even heard Howard Dean on NPR the other day saying the Democrats would not be advocating for higher taxes. So how do they expect to pay for the progressive policies they espouse?

Dean Weichmann said...

Jeremy, you asked how I would pay for Medicare for all....

I would institute a carbon tax on fossil fuels to pay for it as well as SS. How about that?

Not that I would happen....

Joe Barz said...

Dean, if you put a high enough tax on gas, people will find ways to use less gas, thus reducing the expected tax revenue.

Dean Weichmann said...

Yes, you are right Joe, and that is one reason to institute such a (Pigouvian) tax. Reducing societies dependence on oil and gas is good. It would also reduce waste of a limited resource,and reduce emmisions of pollution.

Joe Barz said...

Is that why they also tax my income? Because they want me to work less? LOL!

Dean Weichmann said...

Good point Joe. But of course if one wants to accomplish something in life or even get richer ya gotta work. Progressive taxation does soften the blow. Even those at high tax brackets still benefit from their effort, just not as much.