Romney’s New Medicare Plan
This is Austin Frakt:
Apparently, Mitt Romney has taken a Medicare growth cap off the table. That’s according to his own campaign document, which says, “Governor Romney has proposed no cap on premium support in his own plan.” And Michael Cooper in the New York Times reported yesterday that,
The Romney campaign now says that their plan would work differently from Mr. Ryan’s original proposal, and would have the flexibility to raise the proposed cap on spending if it does not keep up with costs.
If Romney’s new Medicare plan has no rate growth cap (like the GDP+1% in current law or the GDP+0.5% one President Obama and Rep. Ryan have proposed previously), then the implications are…
Governor Romney needs to get on the ball with this one..
Interesting to see how this plays out.
@Frakt are a number of Medicare reform ideas. But not on the list is: let seniors pay more (or less) than Medicare’s controlled prices — ie, let them negotiate with doctors etc., and let docs charge what they will. Two other ideas not on Frakt’s list of reforms are: getting government, fed or local, out of the business of planning the number of hospital beds/facilities that can be built with private funds. That’s none of their business. Another missing idea is: as long as there are doctor/nurse shortages: unlimited work visas for health workers.
These measures would bend the cost curve.
Medicare uses price controls to reduce expenditure. In other markets, we know that price controls lead to shortages. In health care, an example of a shortage is when seniors have a hard time finding doctors who will see them without a long wait. And when seniors do see the doctor, they are often rushed through and referred to a specialist rather than treated by their family doctor. Price controls are a very blunt instrument. The price controls in the PPACA — or any other plan whether Republican or Democrat — will have the same effect unless competition is used to control spending.
At this point, these claims that the Romney-Ryan plan is looking to charge seniors more for care is being overstated. According to the Policy Memo, these accusations were made by President Obama based on estimates on the cost of health care 10 years from now. They are clearly not talking about any immediate increase in costs for the elderly…but instead they are referring to long term prospects, which by the way could also be prevented…if they worry about the “now” and not the “10 years from now”.
“Competitive Bidding” will only work if we return competition to the market and allow insurance companies to risk adjust their prices.
Austin Frakt also has a run down of what a premium support model should look like. I think this is unlikely under a Romney Administration, but we can hope.
http://theincidentaleconomist.com/wordpress/what-a-complete-medicare-premium-support-proposal-would-include/
I am finding it increasingly difficult to differentiate.