With more than $37 trillion in unfunded obligations and 77 million baby boomers set to enter retirement, Medicare is facing a fiscal and demographic tsunami. Even President Barack Obama has conceded that Medicare will not be there for future retirees unless it is reformed. Rep. Paul Ryan's plan for Medicare is the best way to get the program out of the storm and is far better than the president's plan for Medicare. Here's why:
It ensures the government can meet its obligations to today's seniors and tomorrow's by turning its promises into real dollars, not worthless IOUs. It gives seniors the right to make their own choices, instead of the government making choices for them. It builds on what works—Medicare Advantage and the prescription drug benefit. Health plans, now including the traditional government plan, would compete for seniors' business based on price and benefits.
Obama's plan, on the other hand, takes more than $700 billion out of Medicare not to shore up Medicare's fiscal obligations, but to pay for his massive new health program.
His Medicare plan has the government in charge of deciding services and benefits. It depends on government price controls to squeeze more dollars out of Medicare, and empowers an unelected government board to make more Medicare cuts. By ratcheting down on payments to Medicare providers, it jeopardizes access to care for today's seniors by driving hospitals and doctors out of business—and leaves tomorrow's seniors with empty promises.
There is no way around it. Medicare needs change not only to prepare for the next generation of seniors but to find a way to put this program on better fiscal footing. Refreshingly, Representative Ryan's Medicare plan does just that.
First appeared in US News & World Report's "Debate Club."