Voter Education: Health Care

Health Care reform is one of the most confusing issues in the upcoming election, and since the goal of a campaign is to win (as opposed to being educational and straightforward) neither Obama nor Romney are being particularly helpful in sorting through the various proposals and their impacts. The three major programs we need to talk about are Medicare, Medicaid, and Obamacare.

We’ll start with Medicare. Romney correctly points out that Obama has cut 716 billion dollars from the projected growth of Medicare spending. However, he then incorrectly asserts that Obama has raided the Medicare trust fund and will push Medicare towards insolvency. Obama has not changed the amount of money coming into the Medicare trust fund, he has merely cut the amount of spending going out, which actually increases the number of years it is expected to remain solvent (AP Story). The problem with cutting payments to providers is that while no benefits are cut, it may lead to a decrease in quality.

Paul Ryan’s budget includes the same Medicare cuts that Obama’s does, but Romney has promised to undo them.  Romney also appears to endorse Paul Ryan’s more controversial plan for premium support starting with everyone who is currently under 55. If competition works to keep costs down then it’s a good plan, but if not then the cost differential between the amount of premium support provided and the cost of health care will be borne by seniors rather than the government. Based on experience with Medicare advantage it seems unlikely that competition will work in the health care market. On the other hand, as noted above, Obama’s plan to control Medicare costs could reduce quality of care. Ezra Klein has more on what little evidence is available.

Even though Medicare is dominating the debate, it’s not where the big differences between Obama and the Romney/Ryan plans actually take place. In fact, both of them cap Medicare growth at GDP+.5%, they just use different cost control mechanisms to get there.

The big difference is in their treatment of Medicaid. Obamacare included an expansion of Medicaid. Between that and the health exchanges the law is projected to provide insurance coverage to an additional 32 million Americans. The Medicaid Ryan’s plan drastically cuts Medicaid such that between 14 and 19 million Americans would lose coverage. This is where the contrast between the two is clearest, Obama would cover between 46 and 51 million more Americans.

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One thought on “Voter Education: Health Care

  1. Pingback: Voter Education: The Federal Budget Part 2, The Obama Budget « Faith and Public Policy

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