Wednesday, August 11, 2010

The Ryan Plan and the Boomers

I'm sure this isn't the first time this has been brought up.  But I was just pondering today how the Ryan plan grandfathers the existing Medicare system for a good sized chunk of the boomer generation (anyone currently 55 or over with the Ryan plan) with the voucher program only kicking in after that.  Doing this completely misses the point of reform, the difficulty we're facing is the demographic shift which is causing our social programs to be under strain.  Without that demographic shift we wouldn't be in much trouble and in no need of drastic solutions.  If your cost control plan is not dealing explicitly with the problems caused by a shifting dependency ratio, skewed heavily towards the elderly, than you're completely missing the entire reason that reform is necessary.

Being one of those in the demographic that will be in the working part of the dependency ratio through the entire transition, my position is that any cost control has to effect the demographic bulge which is the root cause of our difficulties (well, medical cost inflation is the real root cause but the Ryan plan really just handwaves that with a bunch of free market rhetoric with little compelling theory to back it up), not just those coming into the system after the bulge is passed.  There's absolutely no problem paying for my generation's health care, once it's us qualifying for Medicare the dependency ratio should be just fine, barring unforeseen disasters.

I was looking around for a good population pyramid to illustrate this point.  This one will have to do.

[Edit: I slight caveat to the contention that my generation will be just fine despite demographic changes.  We know that the retirement age and eligibility for benefits will have to rise for my generation due to increased life expectancy.  That will be enough to fix it for us.]

[2nd Edit:  Going beyond the Medicare section of the Ryan plan does reveal two good ideas.  One is a non-government group that will seek to produce standards on health services.  The plan compares this to the FASB, I think there are some serious differences between the health industry and the accounting system that will lead to vastly different outcomes (mostly that I think there is an essential difference between standard setting between institutional actors all with an interest in forming a single standardized system and standard setting for the sake of the consumer by institutional actors all with widely varying interests and capacities) but I'd say it's worth a try.  The second is standard setting and the formation of state based exchanges.  Tort reform is also in there but it's not a big deal.  These efforts don't tackle what I believe are the essential problems of health care, the balkanized current institutional structure (which I don't believe is likely to change without outside interventions), the emotional aspect that interferes with decision making on the individual level (end of life counseling and hospice being the big items here), and the fundamental disparity in information between patient (or often, family of the patient) and the array of institutional actors involved in health care, including doctors.]

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