Americans United for Change said it best in a recent e-mail: "You can't put lipstick on a pig," even if a Republican and Democrat are applying the red gloss together. The big hype in federal health care politics last week was the announcement of a joint proposal to mostly-privatize Medicare from Republican House Budget Committee Chair Paul Ryan and Democratic Senator Ron Wyden. But all the hubbub about bipartisanship won't mask the truth: the plan takes Medicare in the wrong direction, building on the program's failures and undercutting its most promising reforms.
The Ryan-Wyden plan is the latest variation on plans, known as "premium support," that dramatically increase the role private insurers play in providing Medicare coverage. The ostensible motivation for the premium support proposals is to control Medicare costs, but all the evidence is that Medicare delivered by private insurance is more costly than traditional Medicare delivered by the government. The real motivation is to control the government's costs, as opposed to health care costs, and to reduce the role of government in the health care system.
The Ryan-Wyden plan would give Medicare enrollees a fixed amount of money to buy an insurance policy from private insurance plans or the traditional Medicare program. It would limit the growth of the premiums to the grown rate of GDP plus 1 percent, less than the traditional growth rate of Medicare and much less than the growth of overall medical costs. Yes, that's right: Medicare does a better job of controlling health care costs than private insurance.
Health care costs have increased at a significantly lower rate under Medicare than in private insurance plans, chiefly because Medicare is much better able to limit how much it pays to doctors and hospitals. The private insurance plans that now cover about one out of five Medicare patients do so at a cost that is 13 percent greater than Medicare pays for the same benefits (cost overruns that are being significantly reduced by the Affordable Care Act). Insurers reap substantial profits from these private Medicare plans, profits that would soar if most of the Medicare population were handed over to the health insurance industry. And because private insurance has failed to rein in doctor and hospital costs as effectively as Medicare, health care providers would be enriched too.
Capping the premiums would not result in lower health care costs, but in shifting costs to people on Medicare, which would result in seniors forgoing the care they need, ending up in the hospital with more serious illnesses, and dying sooner.
The lipstick on the Ryan-Wyden plan is giving people the option of keeping traditional Medicare. But what we've learned after two decades of private insurance being offered in Medicare is that the insurance companies are very clever at cherry-picking healthier seniors. And the "risk-adjustment" provisions aimed at correcting for this -- paying lower premiums to plans with healthier patients -- have not worked to compensate for insurance company gaming. Under the Ryan-Wyden plan, traditional Medicare, which offers access to hospitals and doctors without the closed panels, pre-approval process, and other obstacles consumers must jump in private insurance, would attract those seniors who are sicker and more expensive. Over time, the burden of serving the seniors who need the most health care would threaten to undermine the public Medicare program.
Controlling health care costs in Medicare -- and in society more broadly -- requires three major strategies. One is not overpaying health care providers, which we continue to do in this country. As Uwe Reinhardt and three other health economists put it succinctly, after comparing the prices we pay and the amount of health care we use in the United States with other developed countries, "It's the prices, stupid."
The reason that Medicare costs less than private insurance is that it already does a better job of limiting what it pays to providers. It would gain new powers to do that under the Affordable Care Act (ACA). The ACA established a new body called the Independent Payment Advisory Board (IPAB), which will function as a kind of military base closing commission for Medicare. If the growth in Medicare costs exceeds the same target amount as in the Ryan-Wyden plan, then it would institute cost control measures that would go into effect unless Congress intervened. Since cutting eligibility and benefits are not part of the IPAB mandate, cost savings would have to come from the actual drivers of cost: the prices paid for services and the way health care services are delivered.
Which brings us to the second major strategy is reorganizing health care delivery: focus on quality, not quantity. In addition to increasing the authority of the IPAB, the ACA invests in new health care delivery systems, called Accountable Care Organizations, which are modeled after the health care systems in the United States that do the best job of providing quality care at a lower cost.
The third major strategy to control overall health care costs inside the health care system is to provide health care to all, including access to affordable prevention and primary care. That, of course, is the thrust of the major provisions of the ACA, which when implemented in 2014 will provide access to basic health coverage, including free prevention, at a price that is affordable to almost all Americans. This year, under the ACA, Medicare started providing free preventive care; millions of beneficiaries have already taken advantage of it.
If there is any place where the idea that free markets are always the most efficient runs into a insurmountable wall of facts it is health care. The overwhelming evidence both within the United States and around the world is that free market health care costs more and reduces access to care. That may not stop anti-government ideologues in the United States, backed by the medical insurance industry, from pushing for privatization of Medicare. But finding a Democrat willing to go along doesn't make that pig any prettier.
Cross-posted from New Deal 2.0.
http://extendhealth.wordpress.com/2011/12/16/ryan-and-wyden-medicare-proposal-overview-and-news-roundup/
As well, they've taken an in-depth look at some of the key issues surrounding the new plan.
http://extendhealth.wordpress.com/2011/12/22/wyden-ryan-the-devil-is-in-the-details/
Extend Health will help you get the most out of your Medicare plans.
Extend Health has great set of comparison tools on their website to help you shop for supplemental medicare Insurance plans. This includes a side by side Plan comparison tool as well as their Prescription Profiler to help you find your lowest-cost coverage.
https://www.extendhealth.com/medicare/quote/search-supplement-medicare-plans
I bought a higher costing plan for Medigap and it pays most of what Medicare approves of but doesn't pay.
I bought the best prescription plan I could buy. I used Medicare's plan compare. The one I had was dropping one of my $2500 a year drugs and not covering it. It was going to cost like $6000 a year to pay for all my prescriptions.
None of the prescription plans are good. But the premiums would be $500 a month if they had to pay for all my prescription costs. I don't know why the law isn't changed to allow Medicare to use bidding for drugs. VA bids and get better prices.
When I had private insurance it changed my insurance everytime I filed a claim. It started out with a $1000 deductible and went to $5000 deductible in one year. They dropped my prescription drug coverage; They are inhumane slithering snakes. I felt like I had escaped when I finally could drop them.
It is terrible to lie to people and blame Medicare for the greed of the health care hospitals and prescriptions.
It is becoming clearer all the time, the health insurance companies want to bankrupt Medicare. It is too sad. I hope there is Karma.
Privatizing health insurance may save the government some money but it is a stupid idea for people.
They told on a financial show that health insurances are making 50% profits. They have made almost everything from government to family budgets go up. They have been going up 7% or so a year for a decade.
Medicare has created jobs for the health insurance and health care fields, but they need to control the pricing.
Scream and whine all you want but at some point the country will be broke and we will be in the same situation as Greece, beggers of the world.
All these programs worked fine until Bush and Cheny got in office. Then greed took over and now they set on their rears in NY and Washington and let the health and prescription businesses financially rape the average person.
None of you seem to see anything wrong with health care gouging the average family. Insurance is too high. Many of the companies make 50% profits and so does big pharma. Our government needs to do something as soon as possible.
You can lower the cost of healthcare by lowering the insurance liability that doctors all face. Right now if you go into the doctor with a chest cold, rather than just giving you the medicine you need, he orders an x-ray, an MRI and everything else under the medical bill he can think of to cover his butt and make sure he can’t get sued.
I live in Germany and I can tell you they have far better health coverage than anything in the United States and it’s far cheaper to see a doctor. The main reason for that is they have stringent Tort Laws that say what you can and can’t sue a doctor for. Their cost to practice medicine are cheaper so the cost they pass onto consumers is much less.
If you think the only reason for lower healthcare cost is the Tort Laws you need to do a little more investagation into your healthcare system
But for the sake of a senior who stumbles across this left-wing BS, the following corrects three key errors:
-- Medicare Part C is not more costly than Original Medicare -- it actually covers 25% of the subscriber base (not one in five) but only used 22% of the trust funds expended in the most recent year. You confuse "cost" with a payment that provides services better than Original Medicare (not the same as). Part C can cover things like prescriptions, annual physicals, the cost of typical skilled nursing stays, and other benefits not in Original Medicare
-- You wet your pants about ACOs at the same time you praise the 2010 PPACA for gutting Part C Medicare. Do you not realize that most Part C Medicare plans are ACOs?
-- Part C Medicare has always provided the tests and other preventive screenings that PPACA instituted for Original Medicare. But they are not all they are cracked up to be. An AWV is not a physical (although most of the corrupt doctors you whine about give us seniors physicals anyways). And if you get a preventive test -- e.g., a colonoscopy -- and it turns out they find something, with Original Medicare, you pay the 20% co-pay (thousands of
Medicare has been subsidizing the Advantage plans. That must be the plans you are talking about. They combine Original Medicare, a medigap and drug coverage under one premium.
Original Medicare works well. It doesn't approve of the too high prices and you don't have to pay them.
Accountable Care Organizations is part of the new health care reform bill. The Patient Protection and Affordable Care Act is PPACA.
Wow. Not that anyone looking for Medicare information should come to this web site but just to set the record straight, "Part C is NOT Medigap," Original Medicare is not "working well," and I don't think you understand Accountable Care Organizations.
Medigap is truly private insurance that's been around in form or another since the beginning of Medicare in the 1960s. Original Medicare is terrible insurance with high copays and deductibles, lifetime limits, no drug/dental/vision/physical-exam coverage and geographic restrictions. (That's why more than 90% of beneficiaries supplement in some way.). And ACOs have been around since the 1980s (they are not new in PPACA). In fact, as I said originally, almost all Part C Medicare plans are ACOs.
(I purposely didn't mention Part D in my comment because the orginal author was arguing against the privatization of Medicare but most people already consider the very successful Part D program to be a privatization of Medicare. It's actually no more a privatization of Medicare than A, B and C but the why gets too complicated to explain on HuffPost.)
Wyden's involvement is puzzling, but the GOP wears its servitude to corporations on its sleeve for all to see.
Medicare for all, single-payer — call it what you will — is the most economical, logical approach to health care... biggest insurance pool, maximum negotiating leverage, minimum administrative overhead.
Did ANY of these Republicans, ESPECIALLY the GOP's insurance hero Ryan, ever pass grammar school math? Which part of the equation do they find confusing?
Talk about blind ideology!
Who are you referring to?
"gut Social Security by continuing the payroll tax."?
What does that even mean? Just pulling it out of your descending colon?
They have no idea about care for our health.
Think about it. Medicare or similar for all - but we should all pay something for it. Seniors pay from their SS checks - $100 a month or so - so everyone should pay towards the system.
KEEP THE INSURANCE COMPANIES AWAY FROM INTERFERING ANY MORE.
Treatment and prescriptions will only get more expensive and their PR will trick you into thinking that they know what they are doing - THEY DON'T
My husband and I together pay about $550 a month together for his plans and my plans. The plans are separate there isn't a family plan.
We pay from $200 to $500 a month for our drugs even with the drug insurance, depending on whether we hit the donut hole, which I always do.