Opinion Journal:
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This reality is underscored in the just-released annual report of the Medicare trustees. Democrats sold ObamaCare as a way to slow the growth of costs, but the report shows that the program's finances have deteriorated even since last year. Medicare is carrying $24.6 trillion in unfunded liabilities through 2085, and chief actuary Richard Foster says even that does "not represent a reasonable expectation for actual program operations."
As a matter of simple arithmetic, this problem can't be solved with tax increases, because health costs and thus government spending on health care are rising so much faster than the economy as a whole is growing. The U.S. capacity to pay for Medicare on present trend diminishes every year.
With ObamaCare, Democrats offered their vision for Medicare cost control: A 15-member unelected board with vast powers to set prices for doctors, hospitals and other providers, and to regulate how they should be organized and what government will pay for. The liberal conceit is that their technocratic wizardry will make health care more rational, but this is faith-based government. The liberal fallback is political rationing of care, which is why Mr. Obama made it so difficult for Congress to change that 15-member board's decisions.
Republicans have staunchly opposed this agenda, but until Mr. Ryan's budget they hadn't answered the White House with a competing idea. Mr. Ryan's proposal is the most important free-market reform in years because it expands the policy options for rethinking the entitlement state.
"Premium support" is not a new idea, but it has long been dormant, and Republicans will need to continue their effort to reintroduce it to voters. Seniors would receive a fixed-dollar subsidy from the government to choose from private insurance options, with higher payments for the poor and sick. Consumers would make cost-conscious choices at the margin, and insurers and providers would compete on health-care value and quality.
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Democrats always go for control freak government over market based solutions. They really do not trust capitalism and the free market. They should give it a try. It is already working in medical procedures not covered by insurance or Medicare. It promotes efficiency and the competition insures that the guy with the best product or service at the best price will get the deal and others who want the business have to match his price and service.
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