Romney picks Paul Ryan as his running mate **official thread**

[anvi]

I'm certainly no political professional.  But my intuition is picking Ryan is a net disadvantage for the race (though if Romney wins, Ryan might help him with the House).  Ryan draws too much attention away from the top of the ticket.  Electorally speaking, winning Florida and Ohio is a lot more important than flipping Wisconsin.  The Ryan pick might prompt, with lots of help from liberal media, liberal voters who may otherwise be quite disappointed with Obama to go to the polls, and in an election where turnout will matter a lot, that's quite a risky move.   But, who knows, the Romney people probably saw polling numbers that made them happy and may have been looking at post-election scenarios as alluded to above too.  So, I could easily be quite wrong.  But my intuition is that, in terms of the election, it's a net disadvantage.  

[anvi]

It will put more pressure on the Dems to talk about entitlements however, which is the last thing they have shown any interest in addressing.

I am definitely in favor of Dems being forced to talk much more seriously about entitlement reform than they have been willing to do up to this point.  My worry is that this pick will prompt Dems to demagogue about entitlements rather that talk about the necessity for reforming them, and demagogue in ways that are convincing to voters, circumventing the need to engage about serious reforms.  It is after all a campaign, not a negotiation.  But, as always, I could be way off  We'll see.

[anvi]

The letter the CBO sent to Ryan analyzing his budget proposal predicts (page 4) that the contributions of Medicare voucher recipients make toward private premiums featuring the "basket" of Medicare-covered procedures and meds would increase rather precipitously under Ryan's parameters between 2022 and 2030.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

Tying medical reimbursements, not Social Security CoLA adjustments, mind you, but medical reimbursements, to the CPI makes the "basket" of covered services shrink fast once it does come into effect, owing to the fact that recent estimates by the Health Care Cost Institute have health care cost inflation rising at twice the rate of general inflation...
http://www.healthcostinstitute.org/2010report
...and because the MLR's associated with private insurers are fairly low compared to those of government plans.

There's a difference between medical rationing, which under every realistic scenario of budget planning going forward is absolutely necessary, and exponential rationing which is necessitated by the Ryan plan not distributing cost cutting measures across the the entirety of the federal budget

The last point leads me to other important issues I myself have with the Ryan plan, among which the unfoundedly optimistic projections for increased revenue levels on the basis of downward adjusted tax rates, the lack of specificity on which tax deductions will be subject to elimination, the plan's refusal to cut defense spending and the associated quite stark reductions in discretionary and Medicaid spending, as both of the latter two will leave states remarkably cash-strapped.  

Looks like an economy-busting brand of austerity that Mitt just went in for a pound of, it seems to me.

[anvi]

Anvi, what is the projected cost increase under Obamacare, so we can put some percentages next to what is "Draconian" and what is necessary fiscal prudence even for those who are not social Darwinians? 

I didn't make comments about "Draconian" cuts and "social Darwinism," and I'm not handing out political endorsements to the people who did either.  As to your question, you mean the health care cost inflation increases under Obamacare?  I don't know, but I suspect they will continue apace.  Nobody wants to touch health care cost inflation in the U.S. very deeply as far as I can tell at the moment.  If someone comes who will, I will personally pound in lawn signs in every state on behalf of their campaign. 

But I'm fairly unelectable, so no one needs to worry about me either.

NYC, if I remember correctly, Ryan has made verbal pledges to end all deductions and loopholes--even though, predictably, that sort of pledge ticks off both sides.  He did leave those decisions, as you rightly note, to committee in the end.

[anvi]

Well anvi, if Obamacare advertises its funding will go up at a rate not much different than the Ryan projection, then just what is the functional difference again per the marketing flyers at least?  Or does Obamacare now have no projections of what it will cost going forward, although it projected something for 10 years to do that reconciliation finesse?

First of all, sorry, NCY.  I've looked at too many abbreviations this evening.  

Well, the last CBO release I looked at had some interesting things in it.  They project that the net budgetary effect of ACA will reduce government health care spending by $84 billion over the next ten years--a period the Ryan plan would make no adjustments to other than repealing the bulk of ACA, which the CBO estimates would add $109 billion to the deficit.  Interestingly, as they note, the first number has been effected at least in part by the recent SCOTUS ruling that states can refuse ACA's Medicaid expansion if they want, which would actually result in federal savings, of course.  CBO also predicts that, over the next ten years, 6 million fewer people will be covered by Medicaid and only 3 million of those people will buy insurance through exchanges with federal subsidies, while the other 3 million will be uninsured.  These figures come out, the report estimates, to something of a wash in terms of federal budget expenditures.  As you expect, the projections of revenues generated from penalty payments are best characterized as wild guesses, and I didn't see anything, after a quick glance through this report, about projections beyond 10 years, whereas the major health care provisions of the Ryan plan only begin to take effect after 10 years.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf

But, on the basis of your question, I'm not sure which numbers we're supposed to compare to get the comparison you want.  Are we looking for comparisons in overall health care cost inflation under both plans, or a comparison of long term federal budget expenditures on health care--which would be complicated given the fact that ACA and the Ryan plan are scored under different budget outlay assumptions--or a comparison of the benefits received by a Medicare beneficiary under the Obama and Ryan plans in, say, 2035?  The first comparison would, I suspect, lead to roughly equal amounts of grim, the second would only be significant under a similar framework of budgetary assumptions, and the third would, I think, probably feature a somewhat larger basket of benefits under ACA than the Ryan plan because the former does not index federal subsidies to the CPI, but that of course leads to larger federal budget expenditures.

Neither candidate is getting my endorsement, as you know, largely because, when I look at both of these plans, I need a potent alcoholic beverage to bring me at least a tiny smidgin of metaphysical comfort.

[anvi]

Ryan, baby, huh?  Yeah, he was born almost exactly six months before me.  If someone asked me to accept a nomination for the Vice-Presidency right now, I'd run away screaming for my mother, so I give him credit for having the pair to step up to the plate.    I don't even want to be the chair of my department, after all.

I'll see if I can make guestimates at those numbers, but it might take some digging and guessing, as you'd expect.

[anvi]

Found some interesting stuff comparing ACA and Ryan's health care proposals.

This CBO letter addressed to Pelosi about the Reconciliation version of ACA claims that, from 2010-2019, the ACA would reduce the federal budget deficit by $138 billion and by .5% of GDP after that.   A detail in the letter (p. 4, paragraph 2) forces me to partially but importantly correct something I wrote above, namely, beginning in 2020, ACA will cap employer-provided insurance tax deductions for high-premium plans by indexing them to the CPI, quite similar to the Ryan plan, and it is to this mechanism that the letter attributes much of the long-term federal savings of the plan.  Note that this cap would not apply to all premiums, specifically to premiums charged for senior defined-benefit plans and for persons earning an income below a certain percentage of the FPL.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr4872_0.pdf

The CBO letter to Ryan, by comparison, begins its projections in 2022, when the provisions effecting health care expenditures would take effect, and stretches them out to 2050.  On page 15, the letter summarizes a rough comparison of federal Medicare and Medicaid spending under ACA, which would reach 7% of GDP by 2022 and 12% of GDP by 2050, to outlays under Ryan's plan, which would place those expenditures at 5.5% of GDP by 2022 and 5% of GDP by 2050.  The letter notes that the bulk of these savings would result from converting Medicaid to a state block-grant system, indexing all premium-support reimbursements to the CPI and changing retirement populations through these decades.
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

The chart found here compares a variety of plans, with current law under ACA in the first column and the Ryan plan (from his budget, not the one he constructed with Wyden, which is also compared) is in the last column.  One will notice that some of the details are similar, though ACA differs from the Ryan plan mainly in keeping Medicare as a defined-benefits plan, capping beneficiary liability for catastrophic care, relatively higher subsidization levels (see link immediately below as well), more regulatory agencies to identify cost-saving strategies, and
a higher cap on total Medicare spending.
http://www.kff.org/medicare/upload/8284.pdf

In terms of benefits available to people purchasing plans in state exchanges, this AEI post finds that, while both "Obamacare" and "Ryancare" suggest broadly similar competitive bidding processes for determining what kinds of plans the government will subsidize purchases of, the degree of ACA regulation will probably reimburse a larger percentage of the actuarial value of a private plans than the Ryan plan will.
http://www.aei-ideas.org/2012/03/competitive-bidding-ryancare-vs-obamacare/

And this research was my Saturday night.
I'm a real loser, aren't I?  
In so many ways...

In any event, what we have in the case of both plans, as far as long-term cost projections are concerned, are very inexact numbers based on quite variant budgetary assumptions, so I'm still not sure how valuable the figures are when compared in the lens of the federal budget.  In terms of coverage, there are some details, on close analysis, that are surprisingly similar about ACA and the Ryan plan, including the incorporation of competitive bidding exchange schemes and some pretty sharply reduced premium support reimbursement rates in some overlapping cases.  There are still sharp differences in terms of program structure and regulatory frameworks.  But, after looking at all this, I think both plans do some "cost shifting" as described by Marston above, in the sense of having beneficiaries in a number of cases pay higher costs for their plans, though the causes for these rising costs in the cases of the respective plans will differ, with the extent of procedure and meds coverage wider in the aggregate under ACA.  But I don't see much hope for either to do a lot about health care cost inflation as a whole.

[anvi]

I'm not entirely confident that medical innovation in the U.S. over the next 40 years will look as good as the last 40.  Maybe it will to some extent for pharma.  But, my gf is a neuroscientist working at a university lab in Canada now, after having received her Ph.D. and done her post-doc in the U.S., and she would say quite emphatically that one of the reasons the U.S. is losing lots of top scientists is because of how much we've hacked up NIH grant funding in the last several decades.  In the U.S., a grant application has to finish in the top 10% of submissions, and sometimes higher, to receive funding, while applicants for a CHIR from Canada have to finish in the top 18%.  The shrinking availability of grant money combined with the tight job market are driving lots of top scientists elsewhere, or prompting them to leave their fields completely,  If we're going to bank so much on innovation in the future, then being as stingy as we've become about research grants doesn't make much sense.  In that regard, I wonder how much the really big discretionary spending squeeze the Ryan plan maps out in the coming decades will leave for research funding.  But, anyway...

And, yeah, there is also the shift to contribution plans over defined benefit ones.  We're saving money by covering less and getting sicker, while the rest of the industrialized word saves money by doing the opposite, and they do so by having much more "draconian," as I'm sure many here would waste no time in putting it, cost control measures.  And so it goes.  

[anvi]

Defined contribution plans are dangerous unless there is a cap on how much patients pay. How much co-pay can be charged by the insurance companies in Ryan's plan? Is there any cap on how much is spent by patients?

Patients are buying private plans in everyone's framework, so the companies can do whatever they want with their co-pays, I would think.  The Ryan plan places no cap on possible out-of-pocket spending by patients.  The benchmark for reimbursement in Ryan's plan is either the second-least expensive plan offered by a state exchange or the FFS premium, whichever is cheaper.  If the patient buys a more expensive plan, the patient is responsible for the difference, and if they buy a less expensive plan, they are refunded the difference.  The level of subsidization depends on one's health status and geographical location and is adjusted over time by being indexed to the CPI.  The Ryan plan makes an attempt to adjust for risk pools by penalizing plans that cover lots of low-risk seniors and giving tax incentive payments to plans with coverage of higher-risk populations.  Low income beneficiaries who are not duel eligible for Medicare and Medicaid (the latter to be decided by each state) would have a medical savings account opened on their behalf with something deposited in it to help them cover out-of-pocket expenses, premiums and co-pays, but I don't know how all this is figured.  All beneficiaries pay more for their premiums if the growth in Medicare spending exceeds GDP + .5% (odds, anyone?).  The CBO told Ryan in their letter that they expected, if all his budgetary proposals were implemented and all targets met, that some seniors could see their out-of-pocket contributions toward premiums rise from 25% in 2022 to 68% in 2030.  So, in some ways, I see the Ryan plan as an exercise as "how low can you go" in government premium-support.  Good for federal budget outlays, of course, but for patients, not so much.    

[anvi]

Ah, the piece Torie linked to says that Romney supports the Ryan-Wyden plan, not the original Ryan plan offered in his budget.  That moves a few of the goalposts, of course.  Ryan-Wyden limits patient out-of-of-pocket costs, implements more means-testing in determining premium supports, it gives Congress more negotiating tools if Medicare spending exceeds GDP + 1% before necessarily jacking up beneficiary contributions, it leaves the IPAB agency featured in Obamacare in place, and it does not block-grant Medicaid to states.