Response to Peter Orszag
In a recent editorial, Peter Orszag…offers a number of objections to premium support [as a way for Medicare beneficiaries to enter private health plans.] Unfortunately, his objections are characterized by misdiagnosis of the problem, failure to address the most compelling question regarding premium support, and failure to offer a plausible alternative.
Despite the fact that the 1990 demonstrations were a weak form of premium support, with competitive bidding only by private plans and not including FFS [fee for service] Medicare, the private plan bids for the entitlement benefit package in Denver were 25 to 38 percent below their government-determined payment rates at that time…Currently, low “bids” by private plans in Medicare — below the “benchmarks” — are taxed by the federal government at 25 percent. Under premium support there would be no such tax.
Mr. Orszag apparently believes that the savings suggested by the Denver bids and the generous additional benefits offered by private plans in high payment areas like Miami, all can be explained by the enrollment of relatively good risks by private health plans. Perhaps he’s right and properly risk adjusted bids from private health plans would be no lower than FFS Medicare’s bid in any market area. My response is, “Let’s find out.” It’s an empirical question that deserves an empirical answer.
Bryan Dowd guest post of Reihan Salam at NRO.
Can Americans afford to take risky adjusted bids from private health plans or is this just going to make things even worst?
Good response.
Premium support, competitive bidding, high-deductible plans in Medicare, pre-funding, means testing, etc. are all examples of trying something new to see what works. I don’t know why this is considered partisan or political in any way?
“My response is, “Let’s find out.” It’s an empirical question that deserves an empirical answer”
I agree.
The role that this government has played in our current health care system is what has brought this system to what it is today. This Administration doesn’t allow consumers make their own decisions, choose who to go to when needed, how to reach for help or when. It just simply keeps individuals from exercising their basic rights of freedom.
In order for this economy and our health care market to move forward, consumers need to be able to choose for themselves what exactly it is that they want and need.
Granted. There will always be some kind of resistance from those against making adjustments and changing some rules, but you can’t always please everybody right?
“In addition to premium support, there are proposals to raise the retirement age; increase Part B premiums, coinsurance, and deductibles; end the federal subsidy of Medigap premiums; and improve consumer information on prices and quality. We should do them all, do them now, and do them for everyone – current beneficiaries should not be exempt.”
Probably the best part of this entire response. If they only understood what it really means NOT to exclude anybody from these proposals…
The regulations imposing community-rated premiums does now allow insurance companies to properly risk control. Remove this and I’m sure we could have lower bid.