Liveblogging World War II: May 23, 1941
Recent and Worth Reading

Yes, Paul Ryan Is Wrong. Why Do You Ask?

Jared Bernstein:

Jared Bernstein | On the Economy: When I introduced this blog a week ago, I said that one reason for it was to help people sort out some of the extremely misleading assertions partisans are making these days. Rep Paul Ryan seems intent on keeping me very busy.... “Our plan is to give seniors the power to deny business to inefficient providers…their plan [Affordable Care Act] is to give government the power to deny care to seniors.”...

[I]t’s hard to know where to start.... To get why this “market solution” can’t work, you have to understand a bit about how Ryan’s plan changes Medicare.  As is by now pretty widely appreciated, including by many in his own party, the plan ends guaranteed health care coverage for seniors and replaces it with a voucher for them to shop for insurance on the street... the value of those vouchers start well below where they need to be to enable seniors to afford coverage comparable to Medicare today... their value falls increasing behind coverage costs over time.

Suppose you send me to the grocery store to buy you a gallon of milk.  Milk costs $3.50 a gallon but you give me $2.  I spend the whole day “denying business to inefficient providers”—i.e., grocers who all charge more than that—and at the end of the day, bring you back a pint. Now, instead of milk, where I’ve got the information I need to be a smart shopper, suppose you give me the same under-priced voucher but ask me to bring you back a plan for treating that strange pain you’ve been experience on your left side on humid days.

There’s no “denying business to inefficient providers” in the Ryan plan because there’s no market discipline that average folks with incomplete information armed with an inadequate voucher can enforce on a private health insurance market...