Joseph Rago: The Forgotten History of Ryan's Medicare Reform

Mr. Rago is a member of the Journal's editorial board.

There was a small but instructive moment in 2010, the summer after the passage of the Affordable Care Act, that shows why Paul Ryan is so unusual for Washington.

A panel at the American Enterprise Institute featured Richard Foster, the Medicare actuary who estimates that ObamaCare's $716 billion in Medicare cuts will cause one of six hospitals to become unprofitable. In the audience was Chip Kahn, the president of a for-profit hospital trade group that lobbied for ObamaCare, who stood up to defend the bargain his industry cut in return for 30 million new subsidized customers.

Mr. Foster noted that the cuts, which come via a technical change to Medicare payment rates, apply in perpetuity. But the hospitals only get the extra patients once, so the wedge between costs and benefits for hospitals widens over time.

"Well," Mr. Kahn replied, "you can say, 'Did you make a bad deal?' Fortunately I don't think I'll probably be working after 2020." When Mr. Foster pressed him, he joked again, "I'm glad my contract only goes another six years."

This kind of short-range thinking—and intellectual exhaustion—dominates both parties and their many clients in Washington, in health care especially.Mr. Ryan's political character has always been different. He saw before anyone else that one era of government was inexorably ending, and that if we want things to stay as they are, things will have to change...