When Rep. Paul Ryan (R-WI) introduced his radical budget plan, which amongst other things calls for eliminating of Medicare and replacing it with a federal voucher to purchase private insurance in an amount that doesn't keep pace with health care inflation, a lot of media pundits lauded the proposal as "courageous." Which I suppose might be true if your idea of political courage is, you know, imposing a $34 trillion tax on health care for seniors:

Representative Ryan’s proposal to replace the current Medicare system with a system of vouchers or premium supports has been widely described as shifting costs from the government to beneficiaries. However, the size of this shift is actually small relative to the projected increase in costs that would result from having Medicare provided by private insurers instead of the government-run Medicare system.

The Congressional Budget Office’s (CBO) projections imply that the Ryan plan would add more than $30 trillion to the cost of providing Medicare equivalent policies over the program’s 75-year planning period. This increase in costs — from waste associated with using a less efficient health care delivery system — has not received the attention that it deserves in the public debate.

The analysis conducted by economists David Rosnick and Dean Baker at the Center for Economic and Policy Research, uses CBO numbers to compare the Ryan plan to cost projections under current law, the Affordable Care Act that Republicans are so hot to repeal. And the results are rather stunning:

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  • Center for Economic and Policy Research

The light blue line represents the value of the proposed voucher under Ryan's plan while the gray line represents the government's rising share of Medicare costs under existing law. The difference between the two is the Ryan plan's estimated cost savings to the federal government. But it's the difference between the brown and the dark blue lines that the media has largely ignored, representing "the additional cost of providing equivalent coverage through private insurance rather than through Medicare."

In other words: private sector waste.

I know it's not cool to suggest that the public sector can possibly do something more efficiently than the private, but when it comes to providing health insurance, experience tells us that it's true. Other industrial nations have figured this out, managing to insure all their citizens, and without letting costs spiral out of control. And here in the US, Medicare is unquestionably more efficient than any private insurer when it comes to spending health care dollars, while CBO studies during the health care reform debate clearly showed that the public option would have saved additional trillions over what we ultimately got.

Rather than destroying Medicare, the obvious solution would be to extend it or something like it to all Americans. That is assuming your goal is serve the needs of the vast majority of US citizens and businesses rather than a handful of insurance companies.