Ryan pitches voucher plan to replace Obama healthcare reforms

House Budget Committee Chairman Paul Ryan (R-Wis.) proposed a conservative replacement to President Obama's healthcare reform bill at a speech at Stanford University on Tuesday, under which the government would provide a limited voucher to help Americans buy insurance.

“Giving patients and consumers control over healthcare resources would make all Americans less dependent on big business and big government for our health security; give us more control over the care we get; and force health care providers to compete for our business,” Ryan said.

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Ryan argued that a tax credit in lieu of Medicare, Medicaid and government-credited employer-sponsored healthcare would commoditize healthcare costs, enabling individuals to choose their coverage and allowing the free market to drive down prices and make care more affordable — and generous — for all.

Democrats argue that the plan would just mean that individuals would have to pay the increasing difference between the voucher cost and price of insurance, and that as a result, fewer would be insured. They also say that by giving up the government's ability to negotiate for large groups, it will be unable to exert the same amount of pressure on care providers to bring down costs.

“At its core, the healthcare problem is one of inflation, driven by the over-utilization of services, dramatic underpayments and massive inefficiency,” Ryan said.

Ryan's plan in many ways is built upon his Medicare reform proposal, released as part of his budget plan earlier this year. That plan brought strong protests from Democrats, who argued that it would have dismantled the Medicare program. Even some Republicans — including presidential candidate Newt Gingrich — have argued the proposal may have been too ambitious.

But Ryan said recent GOP victories in House special elections mean Republicans should not be afraid of running on his vision.

“The Democrats threw every scare tactic they could think of at the Republican candidates running in two special elections for vacant House seats," Ryan said. "But the attacks failed to connect with voters hungry for solutions. The Republican candidates prevailed."

But the Medicare proposal was fresher in voters' minds in a special election earlier this year in upstate New York, where Democrats scored an upset victory — questioning whether Republicans will fully embrace the Ryan proposal. Still, Ryan believes his plan a winning one.

“People listened. They learned that our plan did not affect those in or near retirement, that it guaranteed coverage options like the ones members of Congress enjoy and that choice and competition would drive costs down and quality up,” Ryan said. “They also learned more about the Democrats’ plans for Medicare, and they didn’t like what they heard.”