Column: Paul Ryan continues his assault on Obamacare and Medicare — this time on the ‘Charlie Rose’ show


House Speaker Paul Ryan (R-Wis.) seems to be constitutionally unable to avoid making misstatements about the Affordable Care Act or Medicare, two programs he has the knives out for. He doesn’t put it that way, of course — he hides his demolition plans behind the language of “fixing” the programs, but his “fixes” resemble what Mafia dons mean when they talk about “fixing” a stoolie or a pet owner means by “fixing” a cat.

We previously debunked the statements Ryan delivered about the Affordable Care Act during a broadcast town hall last week, when he tried to explain why he’s so intent on repealing the law. On Wednesday, Ryan brought his act to the “Charlie Rose” show on PBS. For an hour, he comfortably fielded verbal balls of yarn from the host, who indulgently allowed him to rattle on without any measurable pushback.

So let’s once again examine Ryan’s words and test them against the truth. We’ll start with Obamacare and move on to Medicare. People should pay attention, because the effect of Ryan’s policies would be to make affordable healthcare harder to find for millions of Americans and to leave seniors holding the bag for more of their own medical needs


-- “This law is collapsing under its own weight”: This is Ryan’s mantra, so it demands close scrutiny, especially because there’s no evidence it’s true. Ryan told Rose that “people are leaving it.” In fact, enrollments in private plans offered through the Affordable Care Act exchanges for 2017 are running well ahead of the figure for 2016. If anything, people are flocking to it. Last year about 11 million people signed up for exchange plans; this year the total is projected to be 12 million. That’s not counting enrollees under Medicaid expansion, who number about 11 million.

Ryan blamed the law for driving insurance carriers out of the individual market. He mentioned UnitedHealth Group, Aetna and Humana as insurers that have pulled out. He didn’t mention why. United, to begin with, has never been a major player in the individual coverage market, was reluctant to participate from the first, entered only a few markets that were destined to be difficult and plainly didn’t know enough about the markets to price its policies adequately. Consequently, it suffered big losses and pulled the plug virtually at the first sign of trouble.

Aetna and Humana are engaged to marry, but government antitrust authorities have been standing in the way of the merger. Aetna’s announcement in August that it was pulling out of most of the states where it offered ACA plans was perplexing because just three months earlier its executives had expressed optimism about the market.

The mystery was solved when a letter surfaced from Aetna Chief Executive Mark Bertolini to a Justice Department official explicitly threatening to “leave the public exchange business entirely … should our deal ultimately be blocked.” Bertolini made the threat on July 5, the DOJ sued to block the deal on July 21, Humana said that very day it would pull out of many markets and Aetna’s announcement followed three weeks later. You do the math.

-- “Premiums are skyrocketing, deductibles are going up.” As Ryan, a self-professed policy wonk, must know, premiums and deductibles were rising before the ACA, and in many cases, the post-ACA increases are lower than before. Although premiums in some states and localities rose at double-digit rates for 2017, increases in many other states were much lower. Arkansas, Ohio and New Hampshire — 2%. In Massachusetts and Indiana, rates actually dropped.


Most important, ACA subsidies are designed to rise in tandem with premiums or in some cases even faster. That will wipe out the premium increase for many families and in some cases reduce premiums. In Arizona, where the nominal premium increase is 116%, the average subsidy for a family of four with $60,000 in income rose 270%. More than three-quarters of all customers in that state get a premium subsidy, and more than half also get a subsidy to help pay deductibles and co-pays. State-by-state statistics on subsidy increases for 2017 are here.

-- High-risk pools for preexisting conditions. Many experts have documented, and we’ve reported, that segregating people with preexisting conditions in high-risk pools doesn’t work — unless the pools are funded by the government at far higher levels than Ryan or any other repealers have mentioned. The pre-ACA experience in the 35 states that tried them was dismal — the insurance was immensely expensive for enrollees, often failed to cover the very conditions that put them in the pool and often carried benefit and time limits that made them worthless.

Ryan needs to acknowledge that the expenses of covering these people are inescapable; his idea merely means moving money around, but unless he provides enough to pay for their care, he’s condemning them to sickness and early death. Either the conditions have to be covered by members of the insurance risk pool or by the taxpayer.

The signs are not good that Ryan accepts that, since he continues to claim that only 8% of the under-65 population have preexisting conditions that would bar them from coverage in the pre-ACA era. That’s a gross understatement; by some measures, the figure is 25% to 40%.

Nor are all such conditions “catastrophic,” to use Ryan’s term, referring to cardiac conditions or cancer. An underwriting guide issued in 2011 by Blue Shield of California also listed as conditions warranting rejection back sprain, arthritis, depression and pregnancy.

-- Subsidies, or “refundable tax credits”? Ryan’s most bizarre statement was a shot at Obamacare’s subsidies. “We also think that a refundable tax credit is a smarter way to get people the ability to go buy insurance that they like that they can afford. That’s better than the subsidies.”


A refundable tax credit is one that flows to recipients even if they have little or no tax liability. As Jordan Weissmann pointed out at Slate, this was a true “wha?” moment in the Charlie Rose interview. That’s because Obamacare subsidies are refundable tax credits. As Weissmann noted, Ryan’s effort to make a distinction here was “absurd.… He’s spouting gibberish.”

--Selling insurance across state lines. “We have a lizard selling us car insurance on GEICO, we have Flo selling us home and auto insurance,” Ryan told Rose, who found the observation eminently chuckleworthy. “Why can’t we have a vibrant, better market like that for health insurance?” As we’ve observed, the ACA already makes insurance sales across state lines legal, if the subject states wish to allow it and insurers wish to sell it. No one does.

Underlying the cross-border health insurance notion is that insurers would be able to apply their home state’s regulations to policies sold in other states; an invitation to locate in states with the most minimal rules. But that’s not what happens with GEICO or Flo’s Progressive Insurance — though they sell insurance in multiple states, every policy they sell must comply with the regulations of the state where it’s sold. Ryan’s idea is a chimera — it would save nothing and neither state regulators nor insurers care about it.

Ryan didn’t spare Medicare in his roundelay of bunk.

-- “Medicare works; the problem is it’s going bankrupt … in the next decade.” Let’s be blunt: Medicare is not going bankrupt. As the Center on Budget and Policy Priorities reported, Medicare’s coverage for physician and outpatient costs and its prescription drug benefit, parts B and D, cannot run short of money. They’re funded through enrollee premiums and general government revenues, which each year are set high enough to cover costs.

Medicare’s Hospital Insurance policy is under stress. The Medicare trustees reported last year that the trust fund providing its revenue would be sufficient to cover its costs through 2028. At that point, however, payroll taxes and other revenue would be enough to pay 87% of costs. That’s not “bankruptcy” by any definition.

Ryan complained that “more than half of [Medicare’s] financing is on borrowed money.” If that’s so, there’s an easy fix, well within Ryan’s legislative powers: stop borrowing the money. If Congress stops cutting taxes on the wealthy, the U.S. would have more than enough resources to cover these costs without borrowing. Instead, he advocates cutting benefits, which would harm the neediest members of the community, to spare his wealthy patrons a tax increase.


In any case, several solutions to Medicare’s financial stress and strain are embodied in the Affordable Care Act. Obamacare extended the life of the trust fund by more than 10 years, in part by providing additional tax revenues and by reducing reimbursements to providers. Repealing the ACA, according to the Congressional Budget Office, would increase Medicare spending by more than $800 billion over 10 years. It would also reverse the closing of the drug benefit “doughnut hole,” a gap in coverage that hits enrollees when their drug spending reaches a certain threshold. The coverage gap strikes an estimated 9 million Medicare enrollees.

When Rose challenged Ryan on these points — Oh, sorry: Rose didn’t challenge Ryan on these points. No wonder Ryan was so willing to subject himself to Rose’s cross-examination. He knew there wouldn’t be any.

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