State Profile: Court Blocks Indiana Law to Cut Planned Parenthood Funding

Federal judge Tanya Walton Pratt has overturned provisions of an Indiana law that blocks Medicaid funding to Planned Parenthood because some of its clinics perform abortions. In denying funding, Indiana invoked its authority to determine the qualifications of a provider. However, Judge Pratt responded that the services offered by a provider were unrelated to its qualifications and therefore not a legitimate consideration. She also cited a recent federal Medicaid ruling warning states that they could not exclude qualified providers simply because they performed abortions.


Although federal law already bans the use of Medicaid money to pay for abortion services, the Indiana statute goes further by refusing funding to “any entity that performs abortions or maintains or operates a facility where abortions are performed.” It calls for the immediate termination of state contracts with such providers, hospitals excluded.


On January 22, 1973, the Supreme Court issued the Roe v. Wade decision affirming a woman's right to an abortion under the due process clause of the Fourteenth Amendment. Subsequent rulings confirmed that the right exists up until viability. Although Roe v. Wade remains controversial, it has been the law of the land for almost forty years. While conservatives decry the heavy hand of the state as a health care regulator, Republican-controlled state legislatures have shown little compunction in passing laws intending to erode Roe and in effect restrict abortion rights.


Judge Pratt's opinion alludes to the likelihood that suits challenging the Indiana legislation were likely to prevail. Perhaps. But conservative judicial activism is driven more by ideology than legal interpretation. Is the eventual upholding the Indiana statute a foregone conclusion?

Kinds of policies

The policies under motor insurance are as follows:

(i) Act liability only.

(ii) Third party only.

(iii) Comprehensive policy.

*** Comprehensive policy:

The comprehensive policy covers the following risks:

(i) Damage to car parts or body.

(ii) Removal charges for repairs.

(iii) Third party liabilities.

(iv) Costs & expenses incurred with risk.

(v) Repair charges.

(vi) Medical expenses.

At the payment of extra premiums, the following risks are also insured:-

(i) Death or injury to family members who are above 16 years & below 65 years.

(ii) Riots, strikes, thefts, larceny, etc.

(iii) Loss of Rugs.

Motor insurance

Motor insurance got recently a great momentum. In the older times, personal, who were injured or killed through the negligence of the motorists, could not get financial redress either to them or to  there legal heirs because no scheme of insurance was present at that time. To mitigate the financial hardship caused to the persons, the Motor vehicles Act. 1939, as amended from time to time, has made it compulsory for the motorists to insure against the risk of liability to third parties.

The rate of premium is standardized because the business is tariff. No insurer can charge lower rates then the tariff rates & no insurer can grant benefits exceeding than those prescribed by the tariff.

Vehicles for the purpose of insurance are classified as below:-

(i) Private Cars (not used for carrying passengers for hire or reward).

(ii) Commercial vehicles such as goods carrying vehicles, passenger vehicles, tractors & others.

(iiI) Motor cycles, scooter & auto cycles.

Element of fire insurance contract

(1). Feature of general Contract:

All the features of general contract are also applicable to the fire insurance contract.

(a) Proposal:

The proposal for fire insurance can be made either verbally or in writing. The proposes gives the necessary description of the property to be insured. In practices the printed proposal from is used for the purpose. Introduction, type of properties, value of properties, construction, occupation, etc. are the various

information which are required by the insurer. The answers to these questions must be completely correct. The assured must disclose all the material facts & should observe utmost good faith. The description of the subject matter of insurance is the basis of the contract for assessing the risk & fixing the premium.

(b) Acceptance:

On receipt of the proposal form, the insurer will assess the risk. Sometimes, when the contents & subject-matters are not of very high amount, the insurer may accept on the basis of proposal forms only. When the subject-matters is of larger magnitude & where the hazard involved is of a variable or unknown nature, the insurer may send his surveyor to survey the property. The surveyors being expert in the field of insurance evaluation will consider the proposal in the light of this report. The unknown proposes are required to submit an evidence of respectability. The insured is required to submit a certificate from some known & respectable person about honesty & integrity. AS soon as the proposal is accepted, the assured is informed about the decision.

(c) Commencement of risk:

The risk commences as soon as the contract is completed provided there is no specific time for the purpose. As soon as the proposal is accepted, risk will commence irrespective of the fact that no policy was issued & no premium was paid. Where risks are unknown & tremendous, the payment of premium will be the basis of the completion of the contract. The risk will commence only when the premium has been paid & not before that; when the policy has been issued, payment of premium will not be the basis of commencement of risk.

(2). Insurable Interest.

(3). Principle of good faith.

(4). Doctrine of subrogation.

(5). Warranties.

(6). Proximate cause.

Marine insurance policies

The marine insurance policy is issued only when the contract has been finalized & it would be legal document of evidence of the contract. The form of marine insurance policies has been taken from pretty old times. There has been a slight change in the wordings of the policies. For example, “Be it know that” is substituted for the words ` In the name of God, Amen`.

The old form of policy has been practiced today due to its practicability’s which took after a numerous legal decisions during the past centuries. It has also been practiced that only form of policy is standardized & different clauses are added for applying to various types of policies. The standard policy generally contains the following information:

(i) Name of insured or his agent.

(ii) Subject matter insured. It may be ship (hull) cargo & freight.

(iii) Risk insured against.

(iv) Name of vessel & officers.

(v) Description of voyage or period of insurance.

(vi) Amount & term of insurance.

(vii) Premium.

Elements of Marine insurance contract

The marine insurance has the following essential features which are also called fundamental principles of marine insurance.

(i) Features of general contract.

(ii) Insurable interest.

(iii) Utmost good faith.

(iv) Doctrine of indemnity.

(v) Subrogation.

(vi) Warranties.

(vii) Proximate cause.

(viii) Assignment & nomination of the policy.

(ix) Return of premium.

Nature of marine insurance contract

Definition:

Marine insurance has been defined as a contract between insurer & insured whereby the insurer undertakes to indemnify the insured in a manner & to the interest thereby agreed, against marine losses incident to marine adventure.

Section 2(13) A of the insurance Act 1938 defines marine insurance as follows:

“Marine insurance business” means the business of effecting contracts of insurance upon vessels of any description, including cargoes, freights & other interests which may be legally insured in or in relation to such vessels, cargoes and freights, goods, wares, merchandise & property of whatever description insured for any transit by land or water or both, & whether or not including ware house risk or similar risk in additional or as incidental to such transit & includes any other risk customarily included among the risks insured against in marine insurance policies.

The above definition clearly lays down the following classification of the marine insurance.

(i) Hull insurance:

Insurance of vessel & its equipment are included under hull insurance. There are a number of classifications of vessels such as ocean steamers, sailing vessels, builders, risks, fleet policies & so on.

(ii) Cargo insurance:

It may be written under a single risk policy or floating policies. The cargo may be of any description, for example, wares, merchandise, property, goods & so on.

(iii) Freight insurance:

Freight is to be payable for the carriage of cargoes or if the vessel is chartered, the money to be paid for the use of the vessel. The carrier is unable to earn freight if the goods or property (called cargoes) are not safely transported.

(iv) Liability insurance:

The Marine insurance policy may include liability hazards such as collision or running down. Insurance can also be taken for the expenses involved in non-compliance of rules & regulation without any intention to deceive. It should be clear here that marine perils insurance covers not only the “ocean but also the inland perils.” The perils to be included in the policy are clearly defined & the

Insurer will be liable only for the insured perils.

Protect the Bondholders?

The latest twists and turns in the Greek bailout fiasco have combined with a disturbing insight into FSA attitudes here in the UK to make me concerned that the system may now be distorted beyond peaceful reform. In fact, the danger of harmful destabilisation may be much worse because supervisor actions reinforce poor outcomes.

I am told that the primary objective of the ECB in Greece and the FSA in the UK is the same: Protect the bondholders.

Perhaps I am naive, but I did not realise that the FSA saw this as its primary mission until someone at the FSA bluntly told me so and someone in the markets confirmed it independently as only just and proper that this should be so.

If protecting bondholders from bad debt really is the primary objective of the supervisors, then the supervisors have become the problem. Capitalism does not work when capitalists are shielded from the economic risks that they freely undertake for profit when they enter into private contracts for debt finance. If bondholders know that they can get the ECB and the FSA to tilt the field in their direction, they have no incentive to balance yield against risk. They should just go for yield wherever they find it, and trust the ECB and FSA to ensure that they get their money whatever happens to the company, the depositor, the employee or the taxpayer who foots the ultimate bill for their yield.

If the objective of current official interaction with the markets is to prevent market determined outcomes, then we are in for a very ugly period of instability. The market is going to force a market outcome. The officials standing in the way can influence who profits from the market clearing, but the market is going to clear. If the officials have decided that the bondholders always win, then the rest of us will always lose. And once the rest of us - the companies, depositors, employees and taxpayers - remember that we have political power, then we will change the system.

This is what we are seeing in Greece on the streets. The Greek people have realised that the government works for the bondholders; the ECB works for the bondholders; the IMF works for the bondholders. They now understand what was not clear before: No one works for the people.

Strangely, this is also the realisation taking hold in Germany too. People are waking up to the fact that their national economic self-interest is subordinate to the claims of the bondholders. The German government's priority is to protect the bondholders. Germans should know better than most that stuffing the bondholders is sometimes the best policy - having defaulted three times in the last century to lay the ground in each case for economic resurgence.

What scares me is that I naively believed the UK was different. I believed that the FSA was a market regulator that understood market operations. I am now under no such illusion. They have told me their job is to protect the bondholders. If that is true, then the UK is no different than Greece, just slightly behind Greece on the arc of history.

It used to be that the role of the state in financial market regulation was to ensure efficient market operations, promote transparency of prices and liquidity, protect consumers from abusive practices, and to resolve failed companies according to principles of equitable distribution of assets among like classes of creditors. If the role of the state now is to shield HFT, dark pool and OTC markets from transparency, provide liquidity where the market fails, oversee the orderly fleecing of consumers, and to ensure that some creditors of failing firms always win while others always lose, then we no longer have a market economy. And as virtually all these regulatory policies have evolved in the absence of public debate and legislative scrutiny, we also no longer have democratic governance of markets.

Perhaps this is what tiny Iceland realised when it determined that it would default rather than protect the bondholders. Perhaps in a small country in a big ocean it is easier to perceive a common interest in economic and political adaptation to protect the future of your children and your neighbours, rejecting the claims of the faceless, pitiless and stateless bondholders.

I suddenly have a lot more sympathy for the Greek people than I did a fortnight ago. Come the revolution here, I may be in the streets too.

Some will say that the Greeks are hard line communists pining for generous state benefits and pensions they haven't earned. Maybe so. But there is more economic justice in such a system with such objectives determined in a democratic process than in any system with a secret primary imperative to Protect the Bondholders.

The FSA is being broken up as institutional punishment for its many failings in the run up to the financial crisis. I was skeptical of breaking the FSA along prudential supervision and consumer protection lines, but now think that may be a good thing. It may draw a sharp distinction between maintaining resilient banks and tilting the playing field toward institutional players like bondholders. A consumer protection authority will have a more direct interest in countering the Protect the Bondholders mindset where it robs the consumers or risks the taxpayers to achieve its ends.

As many long time readers know, I try to remain optimistic. There is hard work to be done, but the ground is fertile for those who will make the effort to seed and nurture the reforms required. The Vickers/Indepdendent Commission on Banking review and various efforts by HM Treasury and the Bank of England are all moving in the right direction: toward getting the state out of private financial transactions except as regards the setting and enforcing of reasonable rules. Hopefully they will succeed and the bondholder bias will be curbed with the break up of the FSA and long before we Britons hit the streets under the weight of an unsustainable debt.

IOM: Six Aims of Quality Health Care

The balance of health benefits and harm is the essential core of a definition of quality.

Avedis Donabedian

In 2002, the Institute of Medicine published Crossing the Quality Chasm, an influential book that framed all future discussions of quality health care. Crossing came on the heels of the IOM publication To Err Is Human (2000) and a Journal of the American Medical Association report (1998) that warned of "serious and widespread quality problems...throughout American medicine." The report called attention to three broad categories of quality defects:

• underuse, whereby scientifically practices are not used as often as they should be;
• overuse, especially of imaging procedures and prescription of antibiotics; and
• misuse, when a proper procedure is not administered correctly (such as prescribing the wrong drug)

To Err Is Human estimated that as many as 98,000 people dies each year in hospitals from injuries or illness contracted during care.

In Crossing, the IOM outlined six specific aims (explained by Dr. Donald Berwick in the video above) that a health care system system must fulfill to deliver quality care:

1. Safe: Care should be as safe for patients in health care facilities as in their homes;
2. Effective: The science and evidence behind health care should be applied and serve as the standard in the delivery of care;
3. Efficient: Care and service should be cost effective, and waste should be removed from the system;
4. Timely: Patients should experience no waits or delays in receiving care and service;
5. Patient centered: The system of care should revolve around the patient, respect patient preferences, and put the patient in control;
6. Equitable: Unequal treatment should be a fact of the past; disparities in care should be eradicated.

Recognizing that aims must be accompanied by observable metrics, the IOM defined sets of measurements for each aim. For example:

• Safe: Overall mortality rates or the percentage of patients receiving safe care;
• Effective: How well evidenced-based practices are followed, such as the percentage of time diabetic patients receive all recommended care at each visit;
• Efficient: Analysis of the costs of care by patient, provider, organization, and community;
• Timely: Waits and delays in receiving care, service, or results;
• Patient centered: Patient and family satisfaction;
• Equitable: Differences in quality measures by race, gender, income, and other population-based demographic and socioeconomic factors.

Of course, this is all easier said than done. Hospitals could more easily follow evidence-based practices were there a national outcomes data base that provided population-based information. Effecting efficiency programs can mean a complete redesign of institutional culture, as in Virginia Mason's (Seattle) 20-year commitment to Lean management principles. Equitable care is unlikely without a sea change in national health policy (not that there is one) that extends well beyond the limitations of the Affordable Care Act.

The most encouraging developments in the industry-wide reassessment of quality are the recognition that safety and efficiency need not be mutually exclusive, an increased capacity for the practice of evidence-based medicine, and a new emphasis on patients when it comes to setting goals and measuring results.

Source: The Healthcare Quality Book (2nd edition), edited by Elizabeth R. Ransom, Maulik S. Joshi, David B. Nash, and Scott B. Ransom.

Paul Ryan on Single-Payer

As Sam Husseini reports, there is a fair amount of floundering and disingenuousness in Ryan's remarks. It's not the case, for example, that government-run health care has failed wherever it's been tried. The actual track record of government-run health care is good, including in the United States: The VA health care system is highly regarded. Moreover, Ryan's own plan is "patient-centered" only in the sense that it shifts costs onto patients without doing anything to slow medical inflation or end fee-for-service payments.

Also, anyone who thinks that U.S. health care is not rationed hasn't been paying attention. Ryan would state his case more honestly (and accurately) if he said what he apparently believes: De facto rationing by the free market is acceptable, while policy-based rationing by government to assure equal access is not.

Anomie

I came across a new word today playing Scrabble:

Anomie: a collapse of the social structures governing a given society.

Now that is one very useful word! It could usefully describe the slow motion collapse of the financial markets as investors and consumers realise that their interests are no longer protected by fiduciary, exchange, monetary and regulatory structures that once engendered confidence. Or maybe it captures the loss of patriotism and social cohesion in a globalised economy dominated by stateless corporations, their executive elites and their political puppets who are all determined to loot the public treasury while paying no taxes.

One word. So much potential. I will be finding all kinds of appropriate contexts to use it, I expect.

Nature of life insurance contract

Life insurance contract may be defined as the contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum of money either on the death of the insured or on the expiry of a fixed period. The definition of the life insurance contract is enlarged by Section 2(ii) of the insurance act 1933 by including annuity business. Since, the life insurance contract is not an indemnity contract; the undertaking on the part of the insurer is an absolute one to pay a definite sum on maturity of policy at the death or an amount in installment for a fixed period or during the life.

Features of life insurance contract:

(i) Nature of general contract

(ii) Insurable interest

(iii) Utmost good faith

(iV) Warranties

(v) Proximate cause

(vi) Assignment & nomination

(vii) Return of premium

(viii) Other features.

In life insurance contract the first three features are very important while the rest of them are of complementary nature.

1. Nature of general contract

Since the life insurance contract is a sort of contract it is approved by the Indian Contract Act. According to Section 2 (H) & following essentialities:

(i) Agreement (Offer & acceptance)

(ii) Competency of the parties.

(iii) Free consent of the parties, i.e., the parties must be ad idem.

(iv) Legal consideration.

(v) Legal objective.

Kinds of insurance

The insurance can be divided from two angles: first, from the business point of view & second, from the risk point of view.

*** Business point of view:

The insurance can be classified into three categories from business point of view: (i) Life insurance (ii) General insurance (iii) Social insurance.

(i) Life insurance: Life insurance is different from other insurance in the sense that, here, the subject matter of insurance is life of human being will pay the fixed amount of insurance at the time of death or at the expiry of certain period. At present, life insurance enjoys maximum scope because the life is the most important property of the society or an individual. Each & every person requires the insurance. This insurance provides protection to the family at the premature death or gives adequate amount at the old age when earning capacities are reduced. Under personal insurance a payment is made at the accident. The insurance is not only a protection but is a sort of investment because a certain sum is returnable to the insured at the death or at the expiry of a period.

(ii) General insurance: The general insurance includes property insurance, liability insurance and other forms of insurance. Fire and marine insurance are strictly called property insurance. Motor, theft, fidelity and machine insurances include the extent of liability insurance to a certain extent. The strictest form of liability insurance is fidelity insurance, whereby the insurer compensates the loss to the insured when he is under the liability of payment to the third party.

(iii) Social insurance: The social insurance is to provide protection to the weaker section of the society who is unable to pay the premium for adequate insurance. Pension plans, disability benefits, unemployment benefits, sickness insurance and industrial insurance are the various forms of social insurance. With the increase of the socialistic ideas, the social insurance is an obligatory duty of the nation. The Government of a country must provide social insurance to its masses.

*** Risk point of view

Insurance is divided into property liability and other from high point of view.

** Property insurance

(a) Marine insurance

(b) Fire insurance

(c) Miscellaneous insurance

** Liability insurance: The general insurance also includes liability insurance whereby the insured is liable to pay the damage of property or to compensate the less of personal injury or death. This insurance is seen in the form of fidelity insurance, automobile insurance & machine insurance etc.

Functions Of insurance

The functions of insurance can be studied into two parts: (i) Primary Functions (ii) Secondary Functions.

Primary Functions:

(i) Insurance provides certainty: insurance Provides certainty of payment at the uncertainty of loss. The uncertainty of loss can be reduced by better planning and administration. But, the insurance relieves the person from such difficult task. Moreover, if the subject matters are not adequate, the self- provision may prove costlier. There are different types of uncertainty in a risk. The risk will occur or not, when will occur, how much loss will be there.

In other words, there are uncertainty of happening of time and amount of loss. Insurance removes all these uncertainty and the assured is given certainty of payment of loss. The insurer charges premium for providing the said certainty.

 (ii) Insurance provides protection: The main function of the insurance is to provide protection against the probable chances of loss. The time and amount of loss are uncertain and at the happening of risk, the person will suffer loss in absence of insurance. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot cheek the happening of risk but can provide for losses at the happening of the risk.

(iii)  Risk-Sharing: The risk is uncertain, and therefore, the loss arising from the risk is also uncertain. When risk takes place, the loss is shared by all the persons who are exposed to the risk. The risk sharing in ancient time was done only at time of damage or death, but today, on the basis of probability of risk, the share is obtained from each and every insured in the shape of premium without which protection is not guaranteed by the insurer.

Secondary Functions:

Besides the above primary functions, the insurance works for the following functions:

(i) Prevention of loss: The insurance joins hands with those institutions which are engaged in preventing the losses of the assured and so more saving is possible which will assist in reducing the premium. Lesser premium invites more business and more business causes lesser share to the assured. So again premium is reduced to, which will stimulate more business and more protection to the masses. Therefore, the insurance assist financially to the health organization, fire brigade, educational institution and other organizations which are engaged in preventing the losses of the masses from death or damage.

(ii) It provides Capital: The insurance provides capital to the society. The accumulated funds are invested in productive channel. The dearth of capital of the society is minimized to a greater extent with the help of investment of insurance. The industry, the business & the individual are benefited by the investment & loans of the insurers.

(iii) It improves Efficiency: The insurance eliminates worries and miseries of losses at death and destruction of property. The care-free person can devote his body & soul together for better achievement. It improves not only his efficiency, but the efficiencies of the masses are also advanced.

(iv) It helps Economic Progress: The insurance by protecting the society from huge losses of damage, destruction and death. Provides an initiative to work hard for the betterment of the masses. The next factor of economic progress, the capital, is also immensely provided by the masses. The property, the valuable assets, the man the machine & the society cannot lose much at the disaster.

Definition of insurance

The definition of insurance can be made from two points: (i) Functional definition (ii) Contractual definition.

Functional definition: insurance is a co-operative device to spread the loss caused by a particular risk over a number of people, who are exposed to it & who agree to insurance themselves against the risk. Thus the insurance is (A) a co-operative device to spread the risk. (B) The system to spread the risk over a number of people who are insured against the risk. (C) The principle to share the loss of each member of the society on the basis of probability of loss to their risk.  (D) The method to provide security against losses to the insured.

Similarly another definition can be given. insurance is a co-operative device of distributing losses, falling on an individual or his family over a large number of persons, each bearing a nominal expenditure & feeling secure against heavy loss.

Contractual definition: insurance has been defined to be that in which a sum of money as a premium is paid in consideration of the insurer’s incurring the risk of paying a large sum upon a given contingency. The insurance, thus, is a contract whereby (A) certain sum, called premium, is charged in consideration (B) against the said consideration, a large sum is guaranteed to be paid by the insurer who received the premium, (C) the payment will be made in a certain definite sum. i.e., the loss or the policy amount whichever may be & (D) the payment is made only upon a contingency. More specific definition can be given as follows-

Insurance may be defined as a consisting one party (the insurer) agrees to pay to the other party (the insured) or his beneficiary, a certain sum upon a given contingency (the risk) against which insurance is sought.

Choice?

David Brooks argues that the future of health care comes down to "centralized technocratic" planning or a a free market solution. Health care, he sagely observes, is "phenomenally complicated," then goes on to inform us that providers have more information than patients and that insurance companies "are rapacious and are not in the business of optimizing care."

Brooks then compares what he calls the Affordable Care Act's concentration of cost-control power into a board of fifteen experts with the Republican laissez-faire model, which opposes top-down decision making (at least from the government). Rep. Paul Ryan's proposal to finance U.S. health care with a "premium support system" would replace fee-for-service medicine (in fact, it would not):

Seniors would select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.

Brooks writes with great confidence that this will happen -- presumably due to the Magic of the Market -- without explaining exactly how or why anyone should buy this argument.

Jonathan Cohn points out that the Republican plan has a track record, and that it's not especially encouraging. He argues that Ryancare would effectively eliminate health insurance for elders and summons the 1959 congressional testimony of retired autoworker John Barclay:

We retired workers are very proud of being citizens of the greatest country in the world, but … we cannot think it is the greatest possible country when about 65 percent of the aged do not have any insurance to deal with their needs for hospitalization and medical care. Without such insurance, the retired person must pretty much exhaust any savings he has before he can get free hospitalization. This is a constant source of worry. Many of my acquaintances will not visit a doctor for minor illness because they have no money to pay for drugs. After they exhaust their savings they go on welfare to get medical aid, but then, in many cases, it is too late.

The real difference between Democrats and Republicans on health care is not, Cohn writes, between an idealized free market and Stalinist central planning. Rather,

The most salient difference is that Democrats would preserve Medicare's fundamental guarantee of health benefits at affordable prices. Republicans would not.

Meanwhile, Ezra Klein contests Brooks' claim that

...if 15 Washington-based experts really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.

It happens all the time, Klein writes: Around the world, government-regulated and -planned health care has a excellent track record for controlling costs without sacrificing outcomes.

At The Economist, M.S. dismisses Brooks as well, and focuses on the distortion brought about by the marketing and advertising of drugs and devices. 

As I've written before, Ryancare substitutes ideology for honesty. Brooks sips from this cup of Kool-Aid regularly, rarely if ever pointing out that Ryancare is all in on controlling costs by shifting them to elders. If that's what the country wants, then it's what we should do. But how about being up front about the choice?

Vouchercare

Paul Krugman writes that Vouchercare is not a "new, sustainable version of Medicare." It may be new and I suppose that its adherents can call it whatever they like, but its recipients would not find it especially sustaining.

Vouchercare, a.k.a. the Roadmap for America's Future, would starting in 2022 provide seniors with an average of $11,000 with which to purchase insurance. But there's a catch: That's $11,000 in 2012 dollars. To understand what that means in terms of actual purchasing power, calculate the present value of $11,000 using a discount rate based on historical medical inflation rates (3-5% over the last ten years):

• At 3%: $8,135
• At 4%: $7,431
• At 5%: $6,753

Moreover, Ryancare vouchers are indexed to the general rate of inflation as opposed to the medical rate. The medical rate is historically higher. Suppose that the vouchers grow at an average rate of 3% a year for five years while medical inflation increases at a rate of 4%. Although the payout would be $12,752, the actual purchasing power will have dropped to $7,081. This table shows the declining actual value of the vouchers over 25 years given a medical inflation rate of 4% with the vouchers indexed to 3%:

	Payment	Value
Year 1	$11,000	$7,431
Year 5	12,752	7,081
Year 10	14,783	6,747
Year 15	17,138	6,428
Year 20	19,867	6,125
Year 25	23,032	5,836

The Center on Budget and Policy Priorities, using the CBO assumptions provided by Rep. Ryan, estimates that by 2080, Medicare benefits will have been effectively cut by 76%. And even that may be optimistic: Medicare currently operates with an administrative overhead of 1-2%. One organization estimates health insurance company overhead to be as high as 31%, all of which is passed on to purchasers in the form of reduced purchasing power.

So, Krugman is right: Vouchercare is not Medicare. It would be one thing if its adherents were forthright about their intent to gradually eliminate the government role as a health insurer for elders. Then we could have an honest debate, albeit one they would lose. But, as happens too often in the health care reform discourse, ideology has once again trumped honesty.