Rep. Paul Ryan (R-WI) at the Iowa GOP Lincoln Dinner at the DoubleTree by Hilton in Cedar Rapids, Iowa April 11, 2014.
Stephen Mally/The Gazette-KCRG TV9/Reuters

Paul Ryan flubs the basic idea behind insurance

In an apparent bid to drive me batty, CNN recently published a report that described House Speaker Paul Ryan as “a legendary wonk.” In reality, for those who take a closer look the Republican congressman’s record and rhetoric, it’s painfully obvious that Ryan is neither legendary nor a wonk.

Take today, for example, when the GOP House Speaker did a little presentation on Capitol Hill for reporters in defense of his controversial American Health Care Act, which some have begun calling “Trumpcare.” At one point during the slideshow – complete with Ryan’s sleeves rolled up – the Wisconsin Republican tried to explain what he sees as the Affordable Care Act’s fatal flaw:
“The fatal conceit of Obamacare is that we’re just gonna make everybody buy our health insurance at the federal-government level, young and healthy people are going to go into the market and pay for the older, sicker people. So, the young healthy person is going to be made to buy health care, and they’re going to pay for the person, you know, gets breast cancer in her 40s or who gets heart disease in his 50s. […]

“The whole idea of Obamacare is … the people who are healthy pay for the people who are sick. It’s not working, and that’s why it’s in a death spiral.”
Let’s take these two points one at a time, starting with the latter.

The first problem with Ryan’s analysis is that he keeps using the phrase “death spiral” without fully understanding its meaning. As we discussed the last time the Speaker screwed this up, if the ACA were in “death spiral,” we’d see declining enrollment numbers, with consumers withdrawing from the system because they can’t afford the premiums and would rather pay the penalty than buy insurance they can’t afford.

The real-world evidence, however, points in the opposite direction. As Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation, told the Huffington Post in January, “It seems to me that enrollment holding steady amidst tremendous uncertainty about the future of the law and big premium increases is a positive sign. There is no evidence of a market collapse or insurance death spiral.”

The second problem is that Ryan doesn’t seem to understand what “insurance” means.

Look at that quote again: “The whole idea of Obamacare is … the people who are healthy pay for the people who are sick.” Well, yes. The whole idea of health insurance is to establish a system in which the people who are healthy pay for the people who are sick.

This really isn’t that complicated. In fact, it’s incredibly common for the vast majority of Americans: we pay premiums, the money goes into a pool, funds from that pool pay for care. It’s Insurance 101.

If Ryan disapproves of this model – which is weird, given that his own reform bill is built on consumers getting coverage through traditional insurance – there are effectively three alternatives. If the healthy aren’t going to pay the sick, who will? The sick can try to pay for themselves, the government can pick up the tab, or the sick simply won’t get care.

At his next press availability, I’ll look forward to Ryan explaining his vision for how he’d like the system to work.

Postscript: I’ll try to tackle this in more detail in a separate post, but the Speaker’s presentation today included some legitimate criticisms of the Affordable Care Act. What Ryan doesn’t seem to appreciate is the fact that his alternative bill makes no real effort to fix those problems in a realistic way. If he were, say, a “legendary wonk,” he would’ve written a less absurd piece of legislation.