Benjy Sarlin | April 15, 2011, 11:00AM
At first glance, Paul Ryan’s plan to send millions of seniors into the free market with dwindling vouchers in hand might seem a boon to the private insurance industry. But would companies even want to participate?
Unlike the Affordable Care Act, which mandated that millions of young and healthy Americans purchase insurance with government subsidies, the Paul Ryan plan would instead bring the oldest, sickest, and least profitable demographic to the table. And with the CBO projecting that the average senior would be on the hook for over two-thirds of their health care costs within just 10 years of the plan’s adoption — a proportion that is projected to worsen in the long run — the government subsidies backing them up may not bring in enough profitable customers to make things worthwhile.
“If reimbursement rates are too low to provide basic benefits, they’ll tell the government, ‘You do it,’” one insurance lobbyist told TPM. “I don’t think they can require they lose money, they’d just pull out.”
Filed under: In the news | Tagged: Affordable Care Act, American Hospital Association, CBO, Dan Boston, Health Policy Source, Jonathan Gruber, Medicare, Medicare Advantage, Paul Ryan, seniors, vouchers | Leave a Comment »