As part of the 10 Ideas: Prescriptions for Health Reform series, a proposal that would give seniors access to better, cheaper care and force private insurers to compete for their business.

Suppose you are a Medicare beneficiary. You have worked all of your life, saved your money, and paid payroll taxes. Now, in addition to the basic coverage provided by Medicare, you want to receive comprehensive benefits -- the same level of coverage that most Americans enjoy. You have two options, both bad.

Your first option is to continue receiving your guaranteed basic Medicare benefits from the government while enrolling in a Medicare Supplemental Insurance plan. The Medicare Supplemental Insurance Program, or Medigap, allows private insurance companies to offer insurance plans that fill the gap between basic Medicare coverage and comprehensive coverage. Basically, this option means that you would have three insurance plans: traditional government-provided Medicare, a private Medicare Prescription Drug Benefit Plan, and a private Medicare Supplemental Insurance plan. Having three plans creates unnecessary complexity and confusion. A report published in Health Affairs by the Commonwealth Fund found that the "patching together of multiple plans creates confusion for beneficiaries; creates the potential for risk selection; and leads to higher administrative expenses, because of the multiple insurance carriers involved and the lack of integrated claims administration."

If you want to avoid the problems associated with multiple plans, your only option is to receive all of your care through a private insurance plan, known as a Medicare Advantage plan. In a Medicare Advantage plan, the government pays for roughly the amount of care that it would otherwise provide through Medicare. Beneficiaries pay for the rest of the plan through premiums. Medicare Advantage plans, however, are much less efficient than traditional Medicare. According to a report issued by the Majority Staff of the House Committee on Energy and Commerce, less than 85 percent of Medicare Advantage providers' revenue is used to pay for actual medical expenses -- in stark contrast to traditional Medicare, in which more than 98 percent of revenue is used to cover medical expenses.

Why are Medicare Advantage insurers so much less efficient? Because, as Representative Henry Waxman put it, Medicare Advantage insurers "squander billions of dollars on overhead costs -- in fact, they spend ten times the amount per beneficiary [in overhead costs] than traditional Medicare." The report's findings confirm Representative Waxman's concerns that Medicare Advantage insurers spend money wastefully. The report found a company that spent only 79 percent of its revenue paying for medical expenses but paid an executive over $35 million. The same company paid 16 other executives' salaries and bonuses worth $1 million or more. The chief Medicare administrator, in contrast, receives only $165,300, even though Medicare is larger and insures more people than the entire Medicare Advantage market.

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The report also discovered that a company that spent only 82 percent of revenue on medical expenses also spent $1.5 million on a corporate retreat in Edinburgh, Scotland and $1.8 million on a retreat in Cancun, Mexico. Wasting our seniors' hard earned money on unnecessary expenses is reprehensible. In the words of Representative Bart Stupak, "Seniors pay Medicare Advantage premiums with the expectation that the money will be used to provide critical medical care -- not pay for marketing campaigns and executive bonuses. The disparity between the percentage of premiums used to pay medical claims in traditional Medicare and Medicare Advantage is unacceptable; our seniors deserve better. This report is just the latest example of private insurance companies exploiting the Medicare Advantage system for their own gain."

Our seniors deserve better than having to choose between the confusion and inefficiency of multiple plans and the wasteful extravagance of Medicare Advantage providers. Congress can mitigate this problem by creating a public benefit option, a program in which beneficiaries would receive comprehensive care from the government. The government would pay for roughly the same amount of care that it would otherwise provide through traditional Medicare, and consumers would pay for the rest of the care through premiums. Beneficiaries would receive all of their care from one program, so there would be no difficulties arising from trying to combine multiple plans. Because that plan would be public and administered by the Centers for Medicare and Medicaid Services (the same program that administers Medicare), it would be remarkably more efficient than private insurers and would not waste money on extravagant corporate expenses. Finally, because the program would be paid for by consumer premiums, it would be completely revenue-neutral for the government.

The Commonwealth Fund projected the benefits of such a program and published their findings in Health Affairs. According to their report, a comprehensive benefit option would substantially improve the quality and value of coverage offered to consumers while saving them an average of $357 annually on premiums and $60 annually on out-of-pocket costs. The overall market reduction in spending would be approximately $5 billion.

Another advantage of a comprehensive benefit option is just that: it is an option. Even though multiple plans and consolidated private plans are less efficient than a single public plan, consumers may prefer these plans because they can provide more specialized care. If they are willing to pay the higher premiums associated with these plans, they would be able to purchase them. Indeed, private insurers that offer Medicare Advantage plans would have an incentive to become more efficient in order to remain competitive with the public option. This would require them to eliminate unnecessary expenses (like trips to Cancun). A comprehensive benefit option would also give insurers who provide Medicare Supplemental Insurance an incentive to do a better job of integrating their plans with Medicare to mitigate problems associated with combining multiple plans.

Our seniors deserve a better choice for acquiring comprehensive health insurance coverage. Creating a comprehensive public benefit option would give them that choice. It would require no additional government revenue and would save billions by making the market more efficient.

Wilson Parker is a member of the Roosevelt Institute | Campus Network's chapter at UNC Chapel Hill, where he is studying economics. He serves as the co-director of the chapter's Economic Policy Center.

Democracy can't function unless both sides are willing to debate the actual proposals on the table instead of trying to change the subject.

I got hit with something of a one-two punch Tuesday on National Review Online. In two different articles, I'd referred to William Voegeli's book, Never Enough, which argues that liberalism's aspirations for the welfare state are essentially boundless. Both Reihan Salam and Voegeli himself take issue with my argument, but both seem to me to be changing the subject.

Let's take Salam's post first. (He's an old friend and one of the smartest young conservatives I know.) He's responding to the column I wrote about Mitt Romney's "I'm not concerned about the very poor" comment. I treated Romney more generously than anyone else (including Romney himself, who took it back). I took the gaffe, along with Romney's speeches about the "entitlement society," to indicate that he's aligned with House Budget Committee chair Paul Ryan and Voegeli in arguing for a safety net carefully limited to the very poor, rather than a more expansive set of supports for those moving out of poverty.

I've got Ryan and Voegeli all wrong, Salam says. (No word on Romney.) They aren't about cutting programs for the near-poor at all. Rather, it's that they are concerned "that the U.S. public sector isn't doing a good job of putting taxpayer dollars to good use." After a long digression about a McKinsey report on public sector productivity, "Baumol's disease," K-12 education, and various other topics, he claims that the "core idea" of Ryan and Voegeli is this: "We need to do a better job of imposing fiscal discipline on the public sector, but...we also need to give public sector managers the tools they need to impose organizational discipline."

That's it? All this huffing and puffing about the "entitlement society" and slashing spending is just about helping bureaucrats do their jobs better? In his piece, Voegeli accuses me of depicting liberalism as "meek and earnest." I would say the same about Salam's depiction of conservatives. I'd also note that he doesn't cite a single word from Ryan or Voegeli to support this benign interpretation. He's arguing that Ryan's changes to Medicaid (turning it into a block grant) and Medicare (turning it into a Groupon to buy private insurance if it's available) are really just a better way to "align incentives" to reduce overall health costs, a goal we share. The Medicaid block grants are just a way to give states incentives to cut costs, because they can keep all the money they save, rather than sharing the savings with the federal government, as in the current system.

This is an argument worthy of a very long separate response, but in short, it's just wrong. States have plenty of incentives to cut costs and there are 84 Medicaid waivers for states that manage their programs more effectively. Unless the block grant is extremely generous (and thus more expensive than the current system), states, which have little ability to control health costs, will respond by simply cutting Medicaid eligibility. Likewise, Ryan's Medicare plan will, as the CBO has shown, increase total health care costs, the opposite of what Reihan claims is the "core idea."

Then Reihan reverses and admits that Ryan and Voegeli are about cuts, not just better management, but only cuts to invisible programs that serve the well-off. Ryan and Voegeli are really "allies," he says, of Suzanne Mettler, whose book The Submerged State calls for reconsideration of invisible and regressive programs like the mortgage-interest tax deduction. I consider myself an ally of Mettler as well, in every way, so maybe we can all just get along. Ryan has "emphasized the importance of 'broadening the tax base,'" Salam claims, which is true, but his budget didn't offer any specifics and he would give the savings from unnamed tax-expenditure cuts away in even more regressive tax cuts. Likewise, Voegeli's book never mentions the mortgage tax deduction or any of the other big tax expenditure giveaways in his definition of the welfare state. The vision Salam's describing -- of an efficient, well-managed public sector with fewer tax breaks for the well-off -- may be his own, and I could live happily in his world. But it has nothing at all to do with the new conservative consensus represented by Romney, Ryan, and Voegeli.

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Voegeli himself weighs in to take issue with a different article, part of a debate with Stephen Hayward, who drew heavily from Voegeli to make the claim that liberals want essentially a limitless welfare state. Again, this is an argument adopted by Romney, so it's not purely academic. I didn't think that was an accurate description of liberalism, which I argued is all about finding the right limits or boundaries between public and private, government and market. If sometimes those limits are not based on an abstract principle, but on living in a democratic society and paring our aspirations to reality, those contingent limits are no less real than "principled" ones. I used as an example single-payer health care, which I'm not for, and never have been for, even though I've never had a good answer for people who point out that it would be fairer and more efficient. I just think pursuing it is a waste of effort.

Voegeli sees a "gotcha" -- the actual liberal principle is "whatever we can get away with." So if I'm setting aside single-payer in part for political reasons, "conservatives have every reason to go on Fox News and rant about socialized medicine, but zero reason to sit down for an edifying, collegial seminar that hammers out the details of the next incremental expansion of federal authority and spending."

I don't see how that follows at all. If, say, I were president and proposed a market-based expansion of health coverage, it is what it is and not something else. It's not a secret incremental plan to get to single-payer. "Ranting about socialized medicine" in this case would simply be dishonest. (And, obviously, this is not hypothetical, except for the fact that I'm not the president.) And refusing to sit down and negotiate about an actual proposal on the table, especially one similar to what conservatives had advocated for years, is simply a defection from democracy. The fact that some supporters of the actual proposal on the table might have trimmed their original aspirations is no justification for treating them as if they had not.

In plenty of cases, the limitations to my liberalism might be "principled" (which is to say, I could articulate a principle), but other people might have different principles. That's politics in a democracy -- an unending effort to balance various people's principles and aspirations and find what John Rawls called the "overlapping consensus" that works for most of us.

As Voegeli notes, sometimes the range of political possibility, or the overlapping consensus, changes. Fifteen years ago, gay marriage seemed as unlikely as single-payer health care and even most liberal politicians voted for the Defense of Marriage Act. Within a few months from now, a quarter of the population might live in states that allow them to marry the person they love. But Voegeli uses this to change the subject entirely, to what he regards as liberals' commitment to "rigging or nullifying" the democratic process through court decisions. That's not something I'd written about, but it doesn't seem to help Voegeli's argument at all. First, it has nothing to do with the "welfare state" or expansion of public benefits. Second, the democracy card cuts both ways. The Ninth Circuit did just throw out a California constitutional amendment banning same-sex marriage that had passed with 52 percent of the vote, but by the same token, the constitutional provision would have barred the democratic process in California from ever recognizing same-sex marriage -- and the legislature has twice passed same-sex marriage. And as Jeff Toobin points out, liberals for at least twenty years have been very wary of making gains in courts that they can't achieve through other democratic means. Almost everyone who favors gay marriage (with the interesting exception of Ted Olson, apparently) was gratified that the decision did not go further and actually declare a constitutional right to marry.

But I'm not sure what Voegeli's point is here. Does he object to judicial review in all cases? Citizens United was no less a nullification of a democratic decision. Possibly, like Newt Gingrich, he objects only when the decision goes against his own political preferences. That's hardly principled, though I hope he doesn't go so far as Gingrich, who would eliminate entire circuits if he didn't like their rulings. (Talk about no limits!)

I should conclude by saying that I engaged with Voegeli because I found his book fascinating and challenging. It's far more worthy of your time and money than, say, Charles Murray's latest bit of hackwork. In a sense, my frustration with Voegeli when he says liberals and conservatives have "nothing to talk about" is that it is such a potentially interesting conversation, whether in the form of an "edifying, collegial seminar" or something more raucous.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.

Economists have a responsibility to argue for the best policies they believe in, not the best compromise they think lawmakers can pass.

The annual convention of economists and other social sciences is always difficult to get a handle on. It is large and unwieldy, with hundreds of panels and forums. I was in Chicago for this year's pageant, and despite its many different moving parts, one thing rarely changes. Economists' conclusions remain almost completely predictable. That's true at least of the mainstream economists, who the redoubtable libertarian rebel Deirdre McCloskey insists we call something other than mainstream, such as "standard." In sum, markets usually work, they say, but sometimes a little sand gets thrown into the gears. Since the financial crisis, perhaps there has been a little more sand than usual. Solution: clean it up.

Yet something out of the ordinary occurred this year. Economists agreed to a code of ethics, requiring them to make public who finances their research and with what fee-paying institutions they are associated. This reform was neither a result of guilt or newfound conscience. George DeMartino, an economist from Denver, has been loudly and admirably arguing for ethics standards and that a stronger code be adopted. McCloskey, according to a news report, argued outright that economists have become too much like lawyers, defending their clients' positions no matter what. But the movie Inside Job, which caught economists like Glenn Hubbard and Fred Mishkin embarrassingly off-guard on camera, is what forced the profession into action.

But I came away with another concern. What are economists, anyway? Are they paid and/or consulted with for their unvarnished economic expertise, or do they tailor their views to carry weight in the political and lobbying arena with little regard for genuine economic evidence? The politicians and press who seek their advice prefer the latter, of course.

I went to a session called "The Political Economy of U.S. Debt and Deficits."  It included Alan Blinder, former vice chairman of the Federal Reserve, and three former heads of the Congressional Budget Office: Alice Rivlin, Douglas Holtz-Eakin, and Rudolph Penner. The latter two are Republicans; Blinder and Rivlin Democrats.

But no one actually analyzed the "political economy" of the deficit issues -- that is, why people tailor their views to fit the current politics, why are current politics what they are regarding deficits, and so on. Rather, they gave their opinions about what the U.S. should do about its deficit. And in doing so, only Blinder acted like an economist. He said what had to be said: The U.S. has no serious deficit problem over the next 10 years; it is only well beyond that that deficits get pretty crazy if projections remain what they are. Even then, most of the problem has to do with projected increases in health care costs, which he correctly made clear.

Rivlin came closest to Blinder but still demurred, arguing that we should get the budget under control within 10 years. The two others said it is important to undertake this battle right away. Why? Decidedly not for economic reasons; at least, they mentioned none. Or more precisely, they offered no evidence that a U.S. debt of, say, 90 percent of GDP is really Armageddon.

Penner is very worried about debt and has been since he served at the CBO in the Reagan years. He offered no economic evidence, as I say, taking for granted that few of any sense whatsoever could disagree with him. Holtz-Eakin worried that with high debt levels, the U.S. might not be able to withstand another major economic shock. Call it the fallout shelter view of deficit management -- turning into Greece may be just around the corner. But Holtz-Eakin didn't tell us how much deficit levels would eat into growth. Why? Because there is no really hard evidence.

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Rivlin also offered no evidence for her concerns, and Blinder threw in his major concession: let's do something about Social Security, because it is the low-hanging fruit. Even if we cut the expected Social Security gap, it won't do much to reduce the future deficit, he admitted, but it will look to others like we mean business. Will it, really? Eating the low-hanging fruit is unlikely to show anyone anything about American budget-cutting guts. Health care reform is the real issue and requires the real guts.

A genuine discussion of political economy would have to look at why austerity economics has taken hold. If you are discussing economics, and not political economy, present us with the evidence. (To repeat, there is none. See this recent IMF paper.) But don't do what McCloskey warns about, which is to use your credibility as an economist to argue a political case.

Rivlin has co-authored a budget-balancing plan with Pete Domenici that hopes to force health care reforms on the nation by essentially placing a cap on what Medicare will pay, handing over money to Medicare recipients who then buy private health insurance on an exchange if they want to leave Medicare. This plan assumes that somehow, the private players will not pick away the healthiest of the lot to reduce their costs and leave many of the elderly high and dry. Does Rivlin really believe she can regulate that away?

Her cap, which would be pretty low to begin with in many states, will rise at the rate of GDP growth plus one percent, which makes it more generous than Paul Ryan's plan, but is still well below the rising rate of health care costs. This is the best we can do in the current political environment, she seems to say. But is it an economist's job to lend credibility to the dubious case that competition and a cap will reform the system constructively? It's likely that Penner and Holtz-Eakin believe free market competition can produce efficient care, and maybe Rivlin does too, but if so, she should tell us why. In my view, we need something like Medicare for all, not Medicare for fewer. At the least, Medicare should use its bargaining clout to reduce costs for drugs.

In fact, I doubt Rivlin really believes competition in health care will work. Talk about information and complexity problems. She is, as I say, practicing political compromise, not economics. A Medicare cap is not what we need, but it is the second, third, or fourth best choice for her.

Inside the beltway, this passes for realism and high pragmatism. Economics is their false front. I don't mean they are dissembling. They are just so used to wearing their credential like a knight's suit of armor that they may not fully realize what they are doing anymore. If an economist wears an economist's hat, he or she should practice economics, not politics. When they put on a political hat, they should tell us. I would have liked a session on the political economy of the deficit in which these people talked about what compromises they make, what they really know and don't know, what is simply a gut feeling and what is based on evidence, and of course, where their bread is buttered. We didn't get that.

Roosevelt Institute Senior Fellow Jeff Madrick is the author of Age of Greed.

If even the architect of Medicare privatization can admit rising health care costs are driving our fiscal problems, maybe there is common ground for reform.

The Washington Post's Wonkblog had a brilliant idea to ask 18 economists and policymakers to submit their "favorite" -- as in most revealing -- charts or graphs of 2011. Our own Mike Konczal had a good entry, but I was particularly intrigued by this entry from Rep. Paul Ryan.

"Health care costs are the primary drivers of the debt," the chart declares, and Ryan explains that "Relentlessly rising health care costs (coupled with demographic changes) are driving the growth of these programs."

It's easy to see this as just a veiled argument for Ryan's plan to end Medicare (yes, I said it; come and get me, Politifact), but we should also acknowledge that there's a big shift here in language about the long-term deficit. A few years ago, we were told that it was an "entitlement crisis" -- and demographic changes were not an afterthought, but an essential fact -- that made changes to Social Security and Medicare necessary. We just couldn't afford benefits for all those people. It was liberals like Henry Aaron of the Brookings Institution and Peter Orszag during his stint at the Congressional Budget Office who began to produce charts like Ryan's. "There is no entitlement crisis other than health care," Aaron insisted. "There is no practical way to deal with public health-care spending other than by general health-care financing reform."

This was a controversial claim at the time and a direct challenge to the "Fiscal Wake-Up Tour," a slideshow that David Walker of the Peter G. Peterson Foundation was taking around the country. But via Orszag, it was a lesson deeply absorbed by the Obama administration. The Affordable Care Act, in addition to expanding coverage, included numerous provisions that might bring down overall health costs, and the appointment of Dr. Donald Berwick, a preeminent expert on reducing wasteful spending in health care, to run the Medicare and Medicaid programs showed the priority of cost management. Of course, the Republicans have pledged to repeal every last bit of the ACA, including the cost-cutting provisions, and they blocked Berwick's appointment. (He was given a recess appointment, but recently gave up on a longer-term confirmation and left the job.)

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But does Ryan's chart indicate that the right is now willing to join the consensus that health care cost inflation, and not demographics or Social Security, is the driver of long-term fiscal problems? If so (and I'm being deliberately overoptimistic) then perhaps there's a basis for a conversation about methods. Would the Ryan plan for Medicare -- essentially a coupon for insurance -- be a good way to reduce overall health care costs? What do economists who aren't blatantly partisan think? What about alternatives, like better preventive care, universal coverage so that people don't land on Medicare with long untreated problems, or the Dartmouth studies of comparative effectiveness, which identify practices that seem to result in lower costs and better results? We can have that conversation.

Here's another example along the same lines. Noah Kristula-Green wrote in the interesting and increasingly unpredictable FrumForum about an excellent paper by Heather Boushey of the Center for American Progress arguing that economic inequality is related to instability and low growth. Kristula-Green warns conservatives to be ready for this as "the coming liberal argument," and doesn't challenge Boushey on the basic fact that inequality has skyrocketed and that productivity gains had not translated into wage gains for average workers even before the recession. "One immediate question that comes to my mind," Kristula-Green responds, "is why middle class incomes were not rising. If it was because healthcare costs were consuming all the productivity gains the American worker was making, then that suggests that better controls for healthcare costs could have saved everyone a lot of trouble. There can be a lot of arguments as to how best to do that, but that does not sound like a story about higher income taxes for the top 1% of society."

The answer is not that "healthcare costs were consuming all the productivity gains." A slack labor market, reduced bargaining power for workers, and top executives and investors taking a greater share of gains are the primary causes of wage stagnation. But rising health insurance costs, which replace wages, probably had a small something to do with it. And so, again, perhaps there's common ground here: Shifting health care costs away from employers, toward a common system in which there's greater ability to manage costs, would be good for business and probably put more cash in the pockets of workers, even after they pay for health care. The ACA doesn't do that, but the exchanges, mandates, and subsidies it creates would make it possible to move to a post-employer-based health system. And, also, we should raise taxes on the top 1% (and the top 20%) not with the aim of reducing inequality, but simply because they have a far greater ability to pay.

I shouldn't read too much into one chart, probably offered by Ryan's press secretary, or one blogger. But it's interesting to see that the liberal argument about health care costs from three years ago seems to have been adopted by some conservatives, and perhaps that's an early signal that someday, we'll be able to find some common ground on reducing the deficit, raising middle-class incomes, and generating economic growth.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.