The high price of not fixing Medicare

The recent upstate New York special election for Congress was won by a Democrat who used scare tactics against Medicare reforms proposed by Rep. Paul Ryan, R-Wis. Even though the Ryan plan saves Medicare from bankruptcy in 12 years and doesn't affect anyone age 55 and older, elements of the mainstream media went into overdrive portraying Republicans as villains.

One infamous liberal TV ad depicted a Ryan look-alike pushing a struggling, wheelchair-bound grandmother off a cliff. I believe that is a glimpse into the Democrats' political playbook for 2012.

These smear tactics are nothing new. When I served in Congress, the same strategy was employed against bipartisan Medicare savings proposals from 1995 until 1998. The result? The Medicare can was simply kicked down the road to be dealt with by others.

Well, the can can't be kicked any more. That's because everyone agrees that Medicare needs to be modernized. Its expenditures are out of control. In spite of everyone agreeing to this fact, most people want to keep the status quo.

Ryan is being honest and courageous for initiating a dialogue with a detailed plan, one that would ease the burden on taxpayers while introducing private market competition to dramatically control costs nationwide.

President Barack Obama's expensive and onerous health care law, with its transition period of several years, already is leading to steep declines in health care choice and quality. Consider that Medicare sets prices for thousands of services and then pays any physician or medical facility based on a visit. This fee schedule applies to the best and the worst medical facilities, and bills for the patient visit continue to be sent to the overburdened taxpayer. Ryan seeks to end this absurdity.

Under the Ryan premium support model, seniors would be able to pick from an array of private insurance options -- the kind younger workers in the private sector utilize. These plans would be subsidized by a defined contribution, roughly equal to what the government now spends per person. This $15,000 subsidy would grow over time, but seniors who want more expensive plans would pay extra.

It has been rightly noted that premium support would create a market reward for the services that consumers value. Because seniors would be chipping in at the margin, only above the fixed-dollar subsidy, most would favor lower premiums.

By the way, premium support is nothing new. Republicans and Democrats both have supported this idea of premium support over the past 10 years.

In contrast to Ryan, President Obama offers no specific health care and Medicare reforms -- except for government rationing of health care services and more debt. Of special concern is the scary role of the Independent Payment Advisory Board, created by the president's health care law. Beginning in 2014, this board will hold Medicare spending to certain limits. That means 15 unelected presidential appointees will dictate how senior citizens will receive less and less service via flat pricing. That's unacceptable in a supposedly free society and yet another reason why ObamaCare should be repealed.

What is the private-sector advantage of the Ryan plan? Insurance companies will compete for business. Let's say you find an insurance policy for less than your premium grant. The difference would then go into your personal Medical Savings Account, which you build up over time for future medical expenses. And if you can't afford to fully fund that account, the government helps. Is that throwing granny off the cliff?

If Ryan and Republican presidential and congressional candidates continue to advocate Medicare savings -- and they shouldn't waver -- they must effectively rebut misinformation in the court of public opinion. They must craft succinct and memorable talking points and advertisements. I have heard one good idea already: Produce a TV ad depicting a grandchild growing up and then being denied life-saving medical care in 2031 because the nation is broke! This is the reality of what our nation is facing. In continuing to kick the can down the road, the road is getting shorter and shorter every year.

Reasonable and common-sense legislation can be drafted, but you have to sell it to the voters. They must, in coming months, understand the grave consequences of doing nothing about Medicare.

J.C. Watts (JCWatts01@jcwatts.com) is chairman of J.C. Watts Companies, a business consulting group. He is former chairman of the Republican Conference of the U.S. House, where he served as an Oklahoma representative from 1995 to 2002. He writes twice monthly for the Review-Journal.