Imagine this.Your child is enrolled in public school. Every day, you send your child to school with money for lunch, and every day that child has the meal that the school provides. The same meal for everyone. And unless school lunches have changed drastically since I was in school (which, I grant you, is possible), it’s a lot more unhealthy than what you’d like your child to be eating.

And now imagine that the school district changes the rules. It expands the cafeteria and adds space for a dozen new places to serve lunch. You’ll still have the option of eating the regular school lunch meal, but if you want to choose a cheaper option, you can do that. And if you want a healthier option, or a more expensive but tastier option, you can do that too.

And now suppose that after the first year, a report comes out that says the average child spends 40% more for their school lunches than they used to. Is that a bad thing? If so, why?

Welcome to the 2012 Presidential campaign.

Paul Ryan’s Medicare reform proposal is front and center, and it’s basically the situation I’ve described. Insurance companies would bid to give the exact same level of coverage as Medicare (Medicare is, after all, just government provided insurance — they list what they’ll pay to providers and providers decide if they want to allow Medicare patients, something that physicians and hospitals are increasingly saying they won’t do). The government will take the second lowest bid and that’s what every person on Medicare will get in the form of “premium support” — aka, a check you can use to pay the insurance bill each year. If you’re only 65, in great shape, or don’t have that much money, you can choose a cheaper option and pocket the difference. If you’re in not-so-good shape or you have a lot of money and want a better plan (so that your favorite doctor will actually see you and accept your insurance plan, when they currently don’t accept Medicare patients), you can do that too. But two important things should be noted:

1. None of this affects anybody over 55, so anyone talking about how seniors are affected is fear-mongering or uninformed.

2. Anybody under 55 has the option to just choose Medicare (the regular school lunch in my analogy) and be completely unaffected by the evil Paul Ryan.

Apparently, a study has shown that on average, seniors would end up paying over $6,000 more for their medical care. The question is: why?

It’s because people decide they want a plan that’s better than Medicare!

Anyone who is citing this report as a defense of sticking with the status quo of Medicare needs to realize that this report is actually an indictment of Medicare as a bad option. The reason people are going to spend more money is because, now that they have a choice, they are going to choose to get better health care than Medicare currently provides. Today’s generation of seniors are the wealthiest seniors ever in this country. Many of them have planned well, have lots in savings, and want to make sure they’re around to spend time with their families. So if, given the option, they choose a better plan than they’re currently getting, that should be a GOOD thing. If students have the option of choosing the regular school lunch but instead they choose something better, tastier, or healthier, and spend more money in the process, that’s good.

Given that I started with the public school example, let me return to that. Every kid is entitled to attend public school, but parents can pull them out and send them to private school instead. And when you pull your kid out of public school to put them in private school, you end up spending more. And given that you always have the option to put your kid back in public school, if you continue to send your kid to private school, it must be because you think the increase in quality that you get from the private school is worth the price you pay for it. So if you compare people in areas with only public school vs. those that also have good private schools in their area, OF COURSE you’ll find that the average family spend more on their kid’s education when there are private school options. And that’s GREAT! It means they’re paying for a better education!

It’s easy to see hear President Obama quote an increase of $6,000 and just say that since seniors will pay more, this must be bad. But it’s simplistic and incorrect. Heck, it’s easy to cite any statistic and get mad about it. It’s been reported recently that student loan debt now exceeds student credit card debt, and that’s spun as a bad thing. It could be a very GOOD thing — it could mean students are spending less on credit cards. I need to look into the numbers to see exactly what’s happening, but how many people actually do that? Not many. Most will just read that A > B and make a judgment, without understanding whether A has increased or B had decreased, or why either of those has happened.

When it comes to the Medicare issue, this seems to me like a very simple thing: is having more choice a bad thing? I don’t think it is.

P.S. Some argue that the reason seniors would have to pay more is because Ryan limits the amount of the annual increase in the voucher. His initial plan did that, but his new plan (co-authored with Senate Democrate Ron Wyden, recalculates the payment every year based on insurance company proposals. If health care costs go down (which Obamacare is supposed to do, right?), then you get less money. If and when that happens, remember: that would be a GOOD thing.

P.P.S. While finding information for this post, I came across this very level-headed analysis of the Romney and Obama plans from a professor at Indiana University that I recommend you read.