A wiff of truth about Single Payer and Medicare

Medicare Advantage, private insurance paid by Medicare costs Medicare 15% more than government run fee-for service Medicare. The government run program is more efficient than the private HMOs.


September 27, 2009
Editorial
Medicare Scare-Mongering

It has been frustrating to watch Republican leaders posture as the vigilant protectors of Medicare against health care reforms designed to make the system better and more equitable. This is the same party that in the past tried to pare back Medicare and has repeatedly denounced the kind of single-payer system that is at the heart of Medicare and its popularity.

For all of the cynicism and hypocrisy, it seems to be working. The Republicans have scared many older Americans into believing that their medical treatment will suffer under pending reform bills.

The general public believes that, too. The latest New York Times/CBS News poll of 1,042 adults found that only 15 percent believe changes under consideration would make the Medicare program better, while 30 percent think they would make it worse.

That does not mean that Medicare will be untouched under the Democrats’ plans. The Obama administration and Congressional leaders are hoping to save hundreds of billions of dollars by slowing the growth of spending in the vast and inefficient Medicare system that serves 45 million older and disabled Americans. The savings would be used to help offset the costs of covering tens of millions of uninsured people.

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But far from harming elderly Americans, the various reform bills now pending should actually make Medicare better for most beneficiaries — by enhancing their drug coverage, reducing the premiums they pay for drugs and medical care, eliminating co-payments for preventive services and helping keep Medicare solvent, among other benefits.

The main exception, a fully justified one, is that some of the 10 million people enrolled in private plans that participate in Medicare — the Medicare Advantage program — might suffer a dilution or elimination of the extra benefits they get that other beneficiaries do not.

To help them compete against the traditional Medicare fee-for-service program, Congress granted these plans large overpayments, essentially subsidies. Most are required to use part of the subsidy to reduce charges to their beneficiaries or to add extra benefits, such as vision and dental benefits, or even gym memberships.

This often makes them a better deal for beneficiaries. But it is unfair to force those enrolled in traditional Medicare to help foot the bill — currently $43 a year extra for each participant — to help subsidize the private plans. Federal taxpayers have contributed heavily as well.

These private plans didn’t start out costing the government more. For most of the 1980s and 1990s, the assumption was that private health maintenance organizations could do a better job of coordinating care and saving money than the government. The private plans were paid 95 percent of what the same services would cost in traditional Medicare with an assumption that even that money would allow them to deliver extra benefits.

Then after budget cuts imposed in 1997 drove many private plans to drop out of the program, Congress steadily raised their payments. Today Medicare pays the private plans, on average, 14 percent more than the same services would cost in traditional Medicare.

The bill being considered by the Senate Finance Committee is projected to cut the subsidies to Medicare Advantage companies by more than $100 billion over 10 years. Although Republican rhetoric has triggered fears that Medicare Advantage enrollees might lose their coverage entirely if private plans drop out of the system, the real effect of the bill would likely be modest on average.

The value of an enrollee’s added benefits would shrink by more than half from current levels but would not disappear; they would still be worth about $500 a year in 2019.

Douglas Elmendorf, the director of the Congressional Budget Office, told the committee that, under the bill as proposed by the committee chairman, he expected that almost all Medicare Advantage plans would continue to operate and almost all of their current enrollees would stay enrolled. Total enrollment in Medicare Advantage would creep up by 200,000 over the next decade — that is, about 2.7 million fewer new enrollees than expected under current trends, a real chance for savings.

What the Republicans aren’t saying — and what the Democrats clearly aren’t saying enough — is that in important ways, coverage for a vast majority of Medicare recipients, those in traditional Medicare, should actually improve under health care reform.

The House legislation, the only bills in near-final form, would reduce and ultimately eliminate a gap — the so-called doughnut hole — in Medicare drug coverage that currently forces more than three million beneficiaries to pay for drugs entirely out of their own pockets once they hit specified spending levels. That would also benefit many other beneficiaries who pay high premiums for coverage in the gap that they never end up using.

The House bills would also waive deductibles and co-insurance for preventive care that can head off serious illness, expand eligibility for programs that assist low-income beneficiaries and provide incentives for doctors and hospitals to coordinate care, improve quality, and lower costs. All that should benefit many if not most Medicare beneficiaries. And delivery system reforms should benefit the private plans as well.

Republican opponents have also been warning that planned cuts in payments to hospitals and other health care providers might make them less willing or able to serve Medicare patients. If true, that is a problem that Congress will have to address in the future.

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We have long championed Medicare. And we believe elderly Americans, and all Americans, should closely examine the proposed health care reforms.

But the Republicans have done far too good a job at obscuring and twisting the facts and spreading unwarranted fear. It is time to call them to account. President Obama and the Democrats in Congress have to make the case forcefully that health care reform will overwhelmingly benefit Americans — including the millions of older Americans who participate in Medicare.

 

Medicare isn't something I would hold as the model for efficient healthcare. Medicare is insolvent.

 

The point is that if privately administered it would cost 15% more, for the same outcomes, so it would be MORE insolvent.

We have Representatives who have district staffs to help deal with Government Agencies. We have the status of stockholders in the government as citizens and taxpayers. Last I checked, insurance companies do not maintain district staffs to help me deal with THEM. Their business model is that you will have insurance as long as you are well enough to be employed, and you will lose it if you become too sick to work.

 

Lol, you can have your medicare and I'll keep my private insurance that I pay for. Don't worry I'll keep paying my taxes so you can have your health insurance also.

 

Obama, you should be able to get a lot more press than posing as an anonymous person on a trading forum...

How are those poll numbers working out for you?

 

The value of my last employer provided insurance policy was supposed to be around 14K. I was adding it up in my head one day. I believe that I and my employer and have spent well over 170K on insurance in the last 20 years in un-inflation adjusted numbers. The most that I have ever cost them in one year? I believe about 2K, So the insurance companies cleared 150K, uninflation adjusted.

If I had paid the premium into a single payer system like Medicare, then I would still have a considerable credit lifetime. Under the present system I have no credit.
Now I am small business/independent I can not afford the premiums they want, even though I am pretty healthy, am not diabetic, have no heart condition, do not smoke, etc. etc. etc.

 

I like the way the author glosses over this little tidbit......

Republican opponents have also been warning that planned cuts in payments to hospitals and other health care providers might make them less willing or able to serve Medicare patients. If true, that is a problem that Congress will have to address in the future

That's exactly what will happen. The Dems say they can cut $500 BILLION from Medicare and no one will see any changes in their coverage.......sure.

 

The 500 billion they are talking about is the difference between what it would cost if those Medicare Advantage participants were returned to regular Medicare and what it costs with the 15% subsidy they receive now.

If we have single payer there will be less money for the insurance companies can mean more for the actual providers.
But I think that you should also read the Dartmouth Health Outcomes study. In some locations, say Redwood City California in the middle 2000s, you stood a chance of getting bypass surgery if you went to the emergency room with a case of heartburn due to H pylori, because heart surgery was/ is highly compensated and there was an aggressive bypass practice there.

 

You might also want to google http://www.madashelldocs.com.

 

Medicare looks efficient by the standard measure because it spends virtually no resources dealing with fraud. If you add the cost of all those unnecessary procedures - or often completely fictitious ones - Medicare does not look good at all.