Congressman Paul Ryan, the ranking Republican member of the House Budget Committee, has put forth a budget plan that seeks to privatize Medicare which is the most efficient provider of medical insurance coverage in the country. Medicare spends 98% of its budget on health care while the typical private insurance company spends less than 80% of its budget on health care. Ryan’s plan would offer tax credits and vouchers with the amount indexed for inflation. Some would say that it sounds pretty good even though coverage under private insurance would cost substantially more than comparable coverage under Medicare due to the significantly lower efficiency of private insurance.
So let’s say that Congressman Ryan’s bill was accepted as the law of the land, last year inflation was so low that Social Security didn’t even increase payments under what is known as Cost of Living Adjustments, so we would expect that there would be no increase in the tax credits or vouchers. But what would stop insurance companies from raising rates just like Anthem Blue Cross just announced. In California they are hiking insurance rates as much as an astounding 39% and where in the past they’ve only raised rates once a year, they’ve warned that future rate hikes could come at any time.
So the Republican plan for health care reform consists of giving away tax dollars to private companies who can still charge Americans as much as they want and jack up rates as often as they want.
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