Tag: "Medicare"

Medicare Drug Subsidy Mainly Replacing Private Spending

Four of every five dollars the federal government spends under the Medicare Part D drug plan do not allow seniors to obtain drugs they could not otherwise afford. Instead, this spending mainly substitutes for money that seniors and their private insurers would have spent anyway.

[The NBER study by]  authors Gary Engelhardt and Jonathan Gruber concluded that much of the new coverage and spending under Medicare Part D served to crowd out previous private insurance coverage: about 80 percent of Medicare’s spending on this program simply displaced private spending.

This finding is consistent with the NCPA’s previous research on the same topic, estimating that more than 90% of the new spending would replace existing private spending.

Dec 07, 2010 | 8 comments | by

Medicare Part D Plans

Many on the left criticize Medicare Part D because it consists of private drug plans that negotiate directly with drug makers rather than a government-run plan with price controls. Writing in the New York Times Room for Debate opinion pages, Grace-Marie Turner reminds us that Medicare Part D plans were originally estimated to cost $111.2 billion by 2009.  Yet, the 2010 Medicare Trustees Cost Report put the actual cost in 2009 at $60.8 billion — 45 percent lower than the original estimates.

Nov 30, 2010 | 6 comments | by

Rationing Senior Care: It’s Already Started

Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you’re a senior covered by Medicare, the wait is eight weeks.

How about a checkup from geriatric specialist Michael Trahos? Expect to see him every six months: The Alexandria-based doctor has been limiting most of his Medicare patients to twice yearly rather than the quarterly checkups he considers ideal for the elderly. Still, at least he’ll see you.

Top-ranked primary care doctor Linda Yau is one of three physicians with the [Washington, DC] District’s Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.

Full article on Medicare cuts for seniors.

Nov 29, 2010 | 7 comments | by

The Ryan/Rivlin Plan

Congressman Paul Ryan (R-WI) and Alice Rivlin, former director of the Congressional Budget Office (CBO), have proposed an entitlement spending reform plan that is striking both for its boldness and its left-right-coming-together origins. There are a number of interesting parts, but I want to focus on the three most important:

  • Medicare would, for the first time, be transformed into rational insurance. Beginning in 2013, all enrollees would be protected by a $6,000 cap on out-of-pocket expenses; in return they would pay for more small expenses on their own.
  • After a decade, people newly eligible for Medicare would receive a voucher to purchase private insurance instead. The value of the voucher would grow at the rate of growth of GDP plus 1% (note: for the past four decades, health care spending per capita nationwide has been growing at about GDP growth plus 2%).
  • Medicaid would be turned into annual block grants to the states. The value of the block grants would also grow at GDP growth plus 1%.

Bottom line verdict: This is a good proposal that deserves serious attention. To guarantee its success, however, more needs to be done to (1) allow the private sector to control costs through economic incentives, competition and entrepreneurship and (2) allow young people to save for the growing share of expenses they will be expected to bear.

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Nov 29, 2010 | 18 comments | by

Megan McArdle: ObamaCare Unlikely to Survive Political Realities As Is

The closer we get towards 2014, the more I am skeptical of the idea that this program is going to get more popular as it goes forward…. What people are expecting seems to be a very expensive form of insurance (no gatekeepers or restrictions) on the cheap.  What they’re going to get is cheap insurance that they will be forced to buy.  Moreover, a significant number of workers are going to be dropped from their employer plans and dumped on the exchanges.  An even more significant number of workers are going to be shunted onto Medicaid….

Naturally, this is going to create immense political pressure to ease the restrictions.  It’s common to hear progressives say that this is a good plan, if only Republicans don’t screw it up.  We’ll leave aside the wisdom of passing a health care plan which requires one of the two major political parties to somehow vanish.  In the case of Medicaid reimbursements and the exchange restrictions, Democrats are going to be at least as subject to political pressure to revise the program in the direction of making it more expensive….   It is looking more and more as if PPACA as passed is simply not politically (or practically) stable.  I think Democrats were counting on having more years in control to tweak it.  That was a very dangerous gamble, especially considering how badly it did in the polls.

Full piece in The Atlantic. Compare to my own analysis of the politics of health reform.

Nov 23, 2010 | 6 comments | by

Will Health Reform Save Lives?

I promised to return to this question in an earlier post. Loyal readers know we have rejected the extreme and silly claim that 44,400 people die every year (one person every 12 minutes) because they were uninsured. Still, there are serious questions left unanswered. I propose to address them by breaking down the titular question into three component parts:

  1. Does being insured in general versus being uninsured add to life expectancy?
  2. Does being on Medicaid as opposed to be uninsured add to life expectancy?
  3. Is there something about the Affordable Care Act (ACA) that will add to life expectancy?

I want to begin with the third question because it’s a nice way to connect everything that’s wrong with research on the first two questions with much that’s wrong about the design of the health reform law.

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Nov 22, 2010 | 18 comments | by

ObamaCare Cuts Unraveling Already

This is from Julie Appleby of Kaiser Health News:

In a surprising move, the Obama administration will extend special bonus payments meant to reward top-performing Medicare Advantage insurers to those that score only average ratings…. The change means 62 percent of all Medicare Advantage insurers — representing 84 percent of enrollees — will qualify for the quality bonuses, compared with only 14 percent of plans under the health law provisions….The total cost over the three years is $1.3 billion.

“It’s only been eight days since the election,” [Barclays Capital analyst] Joshua Raskin, wrote in his report, “but the rollback of Medicare Advantage cuts got its first step forward.”

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Nov 22, 2010 | 6 comments | by

Where You Die Depends on Where You Live

More than half of Medicare recipients getting treatment at Westchester Medical Center in Valhalla, N.Y. (57.3 percent) ended up dying in the hospital, according to the [Dartmouth Atlas] report. Only 18.7 percent of cancer patients who got care at Evanston Northwestern Healthcare in Evanston, Ill., ended up dying in the hospital.

Dartmouth’s previous end-of-life studies have had detractors. Some hospitals argue that they provide more aggressive treatments to prolong life.

Nov 22, 2010 | 7 comments | by

GrandMa Versus ObamaCare: The Coming Political Battle

Over the next 10 years, if left unchanged the Affordable Care Act (ACA) will take $500 billion from Medicare.  Medicare beneficiaries will see higher premiums. Doctors, nurses, hospitals, and medical suppliers will get lower payments. Under ObamaCare Medicare reductions will be used to subsidize expanded Medicaid to low income recipients and to fund insurance for the uninsured. This redistribution of funding from old to young is the most controversial part of Health Reform.   

In addition to the current beneficiaries, 78 million baby-boomers become eligible for Medicare over the next decade-and-a-half. Because of the ACA, they will get less healthcare so that others will get more. Payment reductions will lower their access to high-quality preventive services, early intervention, and acute care treatments. Is this fair?  

Medicare beneficiaries paid for Medicare during their entire working life. They paid for the coverage with Medicare taxes and continue to pay with Medicare premiums. Why should they now be singled out to bear the cost of health reform?

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Nov 17, 2010 | 9 comments | by

Balancing the Budget Is Easy

David Henderson and Arnold Kling both take up the New York Times challenge and eliminate the deficit by 2015/2030 by cutting spending and (mainly) not raising taxes. Only problem, no one is explaining how you cut Medicare to the bone without harming the elderly. Even so, here is David’s comment:

Here’s a prediction: if the New York Times keeps this game up on its site, a whole lot of people are going to be more sympathetic to cutting government and more optimistic that it can be done. One of my objections to Tea Partiers is how uninformed some of them are about the numbers. Now, thanks to the New York Times, they don’t have to be.

Nov 16, 2010 | 6 comments | by
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