The Left Also Wants to Repeal and Replace
There is stirring on the left.
Now that the odds that ObamaCare will crash and burn have ticked up a notch or two, the words “single payer” are being heard more frequently.
[For those who have been living under a rock, “single payer” is what we used to call “national health insurance,” and before that “socialized medicine” and before that “government-provided health care,” by people who today call themselves “progressives” but used to call themselves “liberals” and before that “socialists” in some cases — all in the hope that continual re-labeling will make the ideas actually seem sensible.]
Take Dennis Kucinich. The other night on Fox News he announced that the Affordable Care Act was a bad idea from the get-go. “Everybody should be in Medicare,” he said, and “We should get for profit companies out of health care.”
My problem with people on the left is that they are so obsessed with “public” rather than “private” and “non-profit” rather than “for-profit” that they become oblivious to basic facts, including these:
- Most government health care programs are mainly managed by private companies — for-profit companies more often than not.
- One in four Medicare enrollees is actually in a private insurance plan and almost all the rest of Medicare is being managed by private companies (Blue Cross, Cigna, etc.)
- 70 percent of Medicaid enrollees are in private plans — a number that is expected to grow — and I believe all the rest are mainly being managed by private companies.
More importantly, THERE IS NOT A SINGLE MAJOR PROBLEM IN OBAMACARE THAT WOULD BE SOLVED BY MOVING EVERYONE INTO MEDICARE. And any minor problems that might be improved by universal Medicare could have been easily solved by tweaks to ObamaCare as well.
Details below the fold.
httpv://www.youtube.com/watch?v=uS2nWLz-AbE
It’s the same old song
Paying for the expansion. Sometime back, the NCPA calculated that we could pay for national health insurance with a 15% VAT tax. But if it were easy to impose such a tax the Democrats would have financed ObamaCare that way. Bottom line: the easiest way to fund universal Medicare is the same way we are funding ObamaCare. That means:
Individual mandate. For the very same reasons that ObamaCare made insurance mandatory, universal Medicare would also have to be compulsory. Otherwise, people would only join when they are sick. To make the budget balance, people would have to pay a premium that, on the average, equals the expected cost of their care. Just like ObamaCare, there would have to be subsidies for lower-income families. Since no one on the left believes in charging buyers a fair price for almost anything, the healthy would be over-charged and the sick would be under-charged. Incentives to game the system would be monumentally destructive without a mandate. Note: none of the problems with the individual mandate have gone away.
Employer mandate. For people at work, there would be enormous pressure to pretend that employers pay for fringe benefits rather than workers themselves. So employers would have to buy their employees into Medicare. That would raise the issue of exempting small business, exempting part-time workers, etc. Note: none of the problems of the employer mandate have gone away.
Cuts in Medicare Spending on the elderly and the disabled. Almost half the funding for ObamaCare comes from reduced spending on current Medicare beneficiaries. Since the money will still be needed, these cuts will not go away.
New taxes on everything from tanning salons to pacemakers to wheelchairs and crutches. Obviously, these are not going to go away.
Managed care. Doctors on the left hate managed care every bit as much as doctors on the right. The problem is that current third-party payment practices give everyone perverse incentives; and when they act on those incentives they make costs higher, quality lower and access to care more difficult than otherwise would have been the case. The Obama administration is experimenting with Accountable Care Organizations and other reforms to deal with this problem. Of course, nothing the administration is doing is working, but that doesn’t change anything. Under universal Medicare, we can’t change the rate of growth of health care spending unless we change the way providers are paid.
Actually there is one place where the Obama ideas for reform are working — though not in the way Washington bureaucrats have planned — in the Medicare Advantage plans. These plans are not going to go away under universal Medicare for the same reason they are not going away under ObamaCare.
The exchanges. If the truth be known, what the left hates the most about ObamaCare is the idea of competition. That’s because of their fundamental dislike of the economic model of medical care delivery. I have been critical of the exchanges because they are managed competition rather than real competition and they create perverse incentives for everyone who participates. The left dislikes the exchanges because they dislike the idea of competition as such.
But for reasons given above, we have no alternative to the economic model if we want to control costs.
Medicare already has an exchange: it’s how enrollees get into Medicare Advantage plans. And if employers get involved, it’s almost certain people will want to enroll in their employer plans as an alternative to traditional Medicare.
Here’s the upshot: In moving everyone into Medicare, we will not have solved a single problem of any importance that we started with in ObamaCare.
“Now that the odds that ObamaCare will crash and burn have ticked up a notch or two, the words “single payer” are being heard more frequently.”
We all knew that this would happen. They’ll say that Obamacare failed because it didn’t go far enough.
“More importantly, THERE IS NOT A SINGLE MAJOR PROBLEM IN OBAMACARE THAT WOULD BE SOLVED BY MOVING EVERYONE INTO MEDICARE. And any minor problems that might be improved by universal Medicare could have been easily solved by tweaks to ObamaCare as well.”
There are many ideologues on the left, but hopefully the pragmatists begin to realize this.
Isn’t that what they say about Communism? It would’ve worked, but it didn’t go far enough? I guess they want billions dead, not just hundreds of millions.
I believe so, although, in their defense, they claim to be against murder. Good for them.
The term “single payer” translates into plain English as “government monopoly.” Now we can see more easily why it doesn’t solve anything.
Exactly, it’s important to cut through the BS. Many people would be sobered by that realization, and many more would be by the fact that government monopoly is just as inefficient as private monopoly.
Proponents like to point out that the monopsony buying power of a single-payer system drives prices down. What they fail to say is that a monopsony also has the power to decide what medical advances it will pay for and which ones it will not pay for. Thus, one way a monopsony health care system achieves efficiency is through its ability to ration care by limiting resources and use waiting lines.
A problem that is also never discussed has to do with the optimal amount of national spending on health care. When consumers are able to internalize all the benefits of their medical spending, they demand the care for which they are willing to pay. In a socialized system, voters underinvest in health care — partly because they can free ride at the expense of others; but also because they don’t enjoy the marginal benefit of increases in spending.
By their inherent nature, single-payer systems are non-price rationing systems. That’s fine if that’s what you want. But there should be no misunderstanding that we would get the care we currently enjoy at a lower price. That’s not how single-payer systems work.
Correct Peter, but that term is often misunderstood. The true fact is, that there are only 2 TRUE single payer plans left in the world. Ten years ago there were 4. Single payer is very easy to understand if you understand the meaning of the word SINGLE. It means only one entity pay pay physicians and that is the government, using your tax dollars of course.
Canada and North Korea are the only 2 countries with single payer, where it is illegal for a legal covered resident to pay a doctor directly for “covered” medical care.
Good morning Mr. Ferrara,
Doesn’t the government already have a monopoly [Medicare, Medicare Advantage, Medicaid, TriCare, VA, CHIP, FEHB, IHS, etc.] as principal payer in the health care industry?
Should we retain the status quo, eliminate these programs, or seek efficiencies?
“If the truth be known, what the left hates the most about ObamaCare is the idea of competition.”
Important point. Their entire platform is based on being against something so fundamental to economics that much of the field would collapse without it.
It’s amazing in this day and age, where we worship statistics, how little credence is given to fundamental economics. Insignificant data is dissected and dissected, but we are making the most important decisions largely based on emotion.
I wonder what the supply of docs will be when reimbursement is capped at Medicare rates (or Medicaid). Will there me a “doc mandate” to ensure participation? Also, how will hospitals make up their losses without private insurance cost shifting?
And when the system runs out of money???
All the fancy hospitals that compete for privately-insured patients would find their profit margins eroded. Without private payers to cross-subsidize Medicare/Medicaid providers, facilities would cut the amenities. Also, without private payers who have to raise reimbursements periodically to remain competitive, Medicare would have no benchmark to track for fee increases. Over time Medicare could squeeze fees. Currently licensed physicians would have few options but to accept the paltry fees. But, you’re correct that future aspiring medical students may find another line of work. The only new doctors entering the field would probably be those trained in developing countries who would prefer our socialized system to their own country.
This situation you note…aspiring doctors choosing something else to do with their lives…has been going on for years, first with the malpractice crisis (which really hasn’t gone away) of the 70s, Hillarycare of the 90s, and progressively worse reimbursement for doctors for at least 20 years. That influx of foreign trained doctors is here, and continues.
@David Lemire – The ‘doc mandate’ would be likely implemented by linking medical licensure to acceptance of Medicare/Medicaid. This would be an administrative challenge to oversee, especially in clinical fields that provide both insurance-based and non-medically necessary services.
Like the song.
This is a very insightful post. I can’t wait to see how the folks “on the left” are going to respond to it.
Funny how people have to be “on one side” usually as we continue to cling on categorizations.
I get what you are saying, but we don’t have to address every minor variant, that’s why we lump people together. It’s a necessary evil.
This is an interesting take on the mentality of the left John. Perhaps it is the key to understanding the maddening pursuit of programs that by any historical logic have no chance of success.
These people simply hate “disruption” and “competition”. It makes them nervous much like a grade school teacher dealing with energetic children. They must have “order” among those they feel an intellectual obligation to keep fed and under control.
There either seems to be a mental block among the left that prevents them from understanding free market economic principles, or a disregard of same in deference to the more important desire to control the population. Based upon the ongoing refusal by the left to abandon the idea of the ACA, I suspect the latter to be true.
According to Kucinich, “Everybody should be in Medicare,” he said, and “We should get for profit companies out of health care.”
Sad isn’t it that Kucinich and others who vote on things like this in Congress are so ill-informed?
Maybe the bills they enact into law are not the only documents they don’t take the time to read?
Great post John! For clarification, current Medicare Advantage market share is very close to 30% nationally and is continuing to grow as a percentage of the total Medicare beneficiary population. Even ACO assigned beneficiaries are switching to Medicare Advantage once they get used to the Care Coordination benefits that they start receiving from their ACO PLan.
Interestingly, the ACO’s that are IPA physician-based plans typically experienced lower costs and improved quality of care during their first year of operations and the hospital based ACO’s typically experienced static or higher costs their first year. Indeed, 9 of the 32 Pioneer ACO’s who lost money their first year are either quitting the ACO model or are going from risk-based to non- risk based models with CMS. I predicted this outcome and wrote about it in one of your Blogs because a hospital based ACO is still going to be focused on filling beds, regardless of their rhetoric. On the other hand, IPA-based ACO’s will live and die based on their ability to improve care and outcomes that result in less ER and hospital admissions. The ACO that my company manages on behalf of its doctor owners actually saved over 10% during its first year based on CMS financials through our first nine months of operations on an annualized basis. Not bad for our first year! The reason? Our handpicked PCP’s in the ACO already were experienced in Care Coordination and Medical Home concepts through our Medicare Advantage system over the last 7 years. However, there are many serious problems with the structure of PPACA that will cause the demise of ACO’s if the law isn’t changed significantly. This could be a good thing though since MA Plan structure is quite functional and works. We are improving outcomes and lowering costs by much more than 10% in the MA model because it is structured properly.
You are absolutely right in saying that the Exchanges are already operating through the Medicare Advantage system.
In Hawaii single payer advocates are predicting the collapse of Obamacare and are holding state-sponsored meetings to plan for the single payer system of the future:
http://www.hawaiifreepress.com/ArticlesMain/tabid/56/ID/9876/categoryId/100/Open-Letter-Hawaii-MDs-Challenge-ldquoSeverely-Dysfunctionalrdquo-Medicaid-Program.aspx
http://www.hawaiifreepress.com/ArticlesMain/tabid/56/ID/9887/categoryId/100/Email-Chain-Reveals-Hawaii-Obamacare-Leaders-Debating-ldquoInevitable-Failurerdquo.aspx
http://www.hawaiifreepress.com/ArticlesMain/tabid/56/ID/9646/Hawaii-Obamacare-Leaders-Warn-ldquoWersquore-not-Going-to-Have-Any-Health-Carerdquo.aspx
The market is already so concentrated that for all practical purposes, all Hawaii has to do to institute “single-payer” is allow HMSA and Kaiser to collude and match Medicare provider rates.
The idea of universal Medicare is absurd. Even PNHP (Don McCanne, are you around?) concedes that current Medicare sucks as an insurance program. There are separate deductibles, co-insurance levels, premiums, and coverage gaps for each of Parts A, B, and D. There is NO LIMIT on out-of-pocket spending. This is why most people on traditional Medicare have to buy a supplemental policy.
It is a terrible program that is “popular” only because there is nothing else available to the elderly and it is highly subsidized by the rest of us. If it were universal, there would be no “rest of us” to pay for the people enrolled.
Anyone who advocates this idea should be given a copy of the Medicare shoppers guide for a couple of hours and then be required to pass a quiz on what is and isn’t covered. Failure to pass would mean a lifetime sentence of silence on health reform ideas.
“[Medicare] is a terrible program that is “popular” only because there is nothing else available to the elderly”
Greg, I agree with what you say except for that remark. Medicare Advantage is an option available for most seniors. Medicare Advantage must provide coverage at least equal to Medicare, and usually provides better. I have Medicare Advantage thru my employer, and there is no additional premium, thus I need not buy a Medicare Supplement policy. But even for people who must pay an additional premium for Medicare Advantage, it usually costs less than the Medicare Supp policy, so the Medicare Advantage option is still better coverage for less cost for most seniors.
Seniors really need options because as you point out, Medicare is such poor coverage. Medicare will likely become even less worthwhile as hospital and physician reimbursement are reduced by billions to finance ACA. Who knows how many providers will simply quit Medicare?
About 30% of Medicare-eligible seniors are now enrolled in a Medicare Advantage plan. That’s more than 11 million of us. It’s clear evidence that Medicare Advantage is a better option for us than original Medicare.
So how do you feel about your doctors, as you, with Medicare, are paying them so poorly that it equates to paying 80 cents a gallon for gas. You are happy, but what about the station owner who only receives the 80c/gal? That’s why 30% of doctors will wee NO Medicare pts. And Medicare has a price limit list for procedures, whether it is paid from an Advantage plan or not.
with the push to put patients in “observation” status and thus, outpatients, consumers off MCare are going to be getting huge bills from hospitals. 20% of the bill plus cost of the medications. That is what healthcare reform has wrought.
John and Friends:
Yes, “single payer” will be touted by those willing to recognize that Obamacare is not going to work. It baffles me that the same Congress administrative staff that put Obamacare together-in such a slip-shod, cynical manner–will be the same one that would birth single payer, then run it as a kind of super board of directors.
There is zero chance that it would thereby generate a national plan that would fit the whole population in all of its variety, and manage a funds flow system that would not choke down the best qualities of the current health system. “If you don’t like Obamacare for the uninsured, you will really not like it when applied to everyone.”
People discount the ebb and flow of philosophies in the national government; the possibility of a steady hand that can be depended upon to help the best healthcare survive will just be nil.
With both Hillarycare and Obamacare claiming a command and control position in healthcare–and failing to perform–isn’t it time to allow states to organize what is needed by their state. Look at Kitzhaber in Oregon.
It won’t be long before Obama no longer wishes to be identified with this travesty..
For a replacement plan, we might want to start, not at the insurance end, but at the delivery end. Just being covered does not guarantee services where there are no doctors. And doctors, so far, cannot be ordered to serve in a distant and difficult community. “Aye, there’s the rub.”
Wanda J. Jones, President
New Century Healthcare Institute
San Francisco
Wanda, you’re exactly right. I’ve been saying that for years. Reforming healthcare by reforming insurance is like reforming transportation by reforming gassoline
Wanda and Ralph I agree.
Obamacare will ultimately fail, not because it is unwieldy, bureaucratic, and its implementation is a train wreck – although all those things are true.
Obamacare will fail because it is not a solution to the problem we have. The problem is the high and rising cost of medical care. Obamacare is an insurance remedy that subsidizes rising medical costs. The economic law of demand suggests that, if anything, subsidizing suppliers’ cost will not incentivize them to control their costs or reduce their prices; in fact the reverse is more likely.
And Ralph – you still have not supplied a link to your source for claiming that the private insurers cheat on discounts as BCBS Michigan did.
“People discount the ebb and flow of philosophies in the national government; the possibility of a steady hand that can be depended upon to help the best healthcare survive will just be nil.”
You are absolutely right Wanda. I would be even more direct by saying it is insane to place the power of life and death (literally) into the hands of a bureaucrat. There still seems to be a disconnect in this regard even with educated people in this country. Good grief, if the shenanigans and scandals that are going on currently with this federal government don’t encourage people to connect the dots, what will it take?
just back from a trip to Vancouver, BC. Universal complaints from the locals about the taxation level. I asked a young 20-30 yr old about national health insurance and his response was “for anything, you always wait. Rather its a little scratch or a something serious, there is always a line to wait for a doctor”.
Even if Medicare for all was judged to be a good idea — not on this blog, granted, but by the general public — even if it sounded good to the voters, it would not survive its first funding debate.
This is what has happened in Vermont over single payer. A lot of citizens were interested until they found out about a 14% payroll tax. (which is exactly what Germany pays and a little less than what France pays).
Millions of individuals and businesses in America pay next to nothing for health insurance. For example, large corporations and the government usually pay for family health insurance. This enables the spouse and children of the employee to go to work in a business that does not offer health insurance.
Under single payer, every single business would have to pay a per cent of payroll.
This hidden bit of free-riding would disappear.
And it may not be wholly unjust that it disappears.
But no state legislature or House of Reps is going to let it happen now.
Bob Hertz,The Health Care Crusade
Bob, you are right that the cost is “hidden” through both employer contribution and tax treatment, and you are also right that it would not be unjust if it (hidden cost) disappears. On the other hand you reference it as a political problem rather than the factual reason that “Medicare for all” should be rejected. Rather the sheer ineffeciency of a gigantic government sponsored national healthcare system should be the point of rejection. Of course,there are many other reasons that it is a bad idea that are not as easy to quantify.
Bob,
I would be interested in hearing more about the Vermont efforts.
Of course you well know that when “large corporations and the government usually pay for family health insurance” it is really the worker paying for it in the form of reduced wages and higher taxes. There is no other source. But the trickery of hiding these costs makes it harder for citizens to make rational decisions about financing issues.
You are right that a 14% payroll tax would have been a pretty good deal for most Vermonters, considering that health spending equals 16% to 17% of the economy.
What I like most is recognition “My problem with people on the left is that they are so obsessed with “public” rather than “private” and “non-profit” rather than “for-profit” that they become oblivious to basic facts, including these: Most government health care programs are mainly managed by private companies — for-profit companies more often than not. One in four Medicare enrollees is actually in a private insurance plan and almost all the rest of Medicare is being managed by private companies (Blue Cross, Cigna, etc.) 70 percent of Medicaid enrollees are in private plans —”. Please inform Republicans. When old ways or manipulated Indemnity, PPO, HMO, IPA etc did not work, something somewhere has to give. New ideas had to be sought, reformed and tried!
What I don’t understand why Govt will pay these private plans-MA and the like, 3 times cost of PMPM basis, even when plan’s cost is low, and plans don’t even share profit equally with all the care-providers. Only few owners do. This is happening in the name of saving national healthcare cost.
Something has to be designed to deal with “difficult” patients.They drive the cost way up and make life difficult. Any insurance of any form just passes the buck to doctors. Why can’t doctors decide like lawyers after first get-to-know encounter if patient case is accepted or not?
As a single-payer advocate, let me just say that I have no problem with competition in health care. But I think doctors and other providers should compete on the basis of quality, convenience, reputation, hospital affiliation, gender/cultural preferences, etc -and not on price. The problem with the right appears to be that they think health care is no different from any other consumer good in terms of price-based competition, as if purchasing health care services is (or should be) fundamentally the same as buying a TV or a new car. In 30 years of practice as an ER doctor, I have never heard a patient tell me that he chose my ER over competing ERs because it was cheaper. It seems to me that nothing is more fundamentally American than the ability to choose your own doctor and hospital, based on your personal preference. But for-profit insurers, including MA plans, do not allow this; they insist that you use a provider in their network. Consider the government’s website hospitalcompare.hhs.gov. What good does it do to know that Hospital A is better than Hospital B in the treatment of, say, heart failure, if your insurance plan will not pay if you go to A?
Dr. James
Because you are probably not on Medicare yet and/or because you imply you are still practicing, you are probably not aware of how the public Part C Medicare Advantage health plan program works or what the concept behind it is.
How they work: It is true that ONCE you choose a Part C plan you usually (but not always) have to live with its network. But FIRST you have a choice of three, four or more public Part C Medicare Advantage plans (except in a few isolated rural counties in the United States that have no networks). That’s where us public Part C health plan subscribers make our doctor/hospital choice.
The concept: Coordinated (usually capitated) accountable care just like in RomneyCare and Obamacare insurance and in private employer plans that have been around for 30 years. The concept is not for everyone for both practical and philosophical reasons. Most observers consider it a leftist concept being imposed on non-senior in Obamacare and RomneyCare insurance so I do not understand why the leftists hate it so much as it relates to us seniors.
As an aside, while almost all Original Medicare Part A and Part B “insurers” are for-profit companies, most public Part C Medicare health plan “insurers” are non-profit. (“Insurers” is in quotes because there is no actual insuring going on here; they are all just administrators to differing degrees.)
Further aside: You are giving away your PNHP membership with your erroneous for-profit statement.
James, how does one compete on quality but not price?
“I’m Harvard educated, and perform 100 of these procedures a year, but would gladly work for the same as the P.A. who has a 2 year degree”
That doesn’t even make sense. Really good docs should be paid more just like really good lawyers, or plumbers or mechanics.
Single payer and competition do not fit together.
“Really good docs should be paid more just like really good lawyers, or plumbers or mechanics.”
In a free market with full competition, the ‘best’ do not always get the job or the profit they seek. The market (in the case of health care, patients, insurers, government agencies) dictates what a job is worth to them. Like it or not, to insure health care access to all, the government is, and will always be, part of that market.
If I have a specialty that garners higher value, and the market agrees to pay more for it, so be it. If my expertise mirrors that of thousands of other contractors (doctors), I must live with the going rate, change my operation, or simply post my frustrations in this blog.
We are experiencing the trials and tribulations of the current free market.
“We are experiencing the trials and tribulations of the current free market.”
Al, I agree in a certain respect, with the understanding that the “current free market” in healthcare is not really a free market at all (for reasons you listed).
While it is true that insurance and third parties may always be part of the healthcare equation (I won’t say “market”), there is no reason that they should be part of it when they are not necessary.
In other words, neither insurance or third parties are needed in the vast majority of healthcare encounters. This “majority” of healthcare encounters should be part of a free market driven process, but that is not the case in the current system.
In reading your post I not that you describe the “market” as “patients, insurers and government agencies”. This is where the problem starts philosophically (and logically). There is no buyer/seller relationship between the insurance companies (or government agencies) and the providers of health services. Consequently if they are presumed to be part of “the market” we have no “free market”, rather we have an economic mess.
Your final sentence doesn’t contribute anything to your point. If my insurance pays for my hospital visit, then price is taken out of the equation and we’re left with non-price competition only within the possibilities allowed by the insurance company. All you’ve said is that people like better stuff when they don’t have to pay for it.
Let me give you two examples of situations with non-price competition. Hyundai and Mercedes compete on both price and quality. As someone who can’t afford a Mercedes, I’m happy that Hyundai exists.
It used to be that interstate air travel was regulated by the Civil Aeronautics Board (until the Carter administration got rid of it). When the CAB held sway, flying was expensive and airlines could *only* compete on quality (not price). The result was that all interstate service was the airline equivalent of a Mercedes: lots of leg room, food service, etc., but fewer people could afford to fly. As a result people going on a cross country vacation had to drive which is slower and results in more deaths per passenger mile.
I think we can all agree that high quality health care is nice, and that it would be really nice if everyone could get that health care. But we cannot deny that we have to deal with scarcity and that extending lower quality care to many can be seen as an improvement over only having premium care that is accessible to a comparatively smaller group.
Side note: A major problem of the single-payer idea is that it eliminates the price mechanism (not that it currently exists in any meaningful way in American health care…) which makes it impossible to allocate capital in a way that balances benefits against costs. Look into the Socialist Calculation Debate for some indication of the problem. Hopefully Dr. Goodman will do a post on it in the future.
James, with regard to services performed for a price, there is no basic difference between health care and any other consumer service. There are certainly instances in which neither “price” nor “quality” play a significant role in a healthcare service encounter. The same is true for someone who has car trouble in the desert and needs a tow truck.
The point is that “most” healthcare encounters or needs for automotive service do not fall into this category. In your particular practice (as an ER doctor) your point is well taken, but it is not the norm.
I completely agree with your comment on hospital selection issue.
The author of this blog post simply does not understand “the real Medicare market” (Reischauer/Aaron term, circa 1995) nor current Medicare rules and terminology. That a so-called expert on healthcare insurance is so wrong so often about Medicare is scary. It is no wonder us seniors are so poorly served by both lefties and the right wing.
The author says in the article above:
“One in four Medicare enrollees is actually in a private insurance plan and almost all the rest of Medicare is being managed by private companies (Blue Cross, Cigna, etc.)”
When he says one in four…,” I am assuming (but pretty sure) that the author is referring to Medicare beneficiaries that have opted for a public Part C Medicare health plan as their supplement.
There are two problems with this simple sentence that illustrates why no progress can be made on Medicare reform. Smart people cannot even get basic facts correct.
1. Over 80% of Medicare enrollees are actually in a private insurance plan, not “one in four.”
2. The “one in four” enrollees in a public Part C Medicare health plan are not in a “private insurance plan.” They are in PART C of Medicare. PART in PART C means it’s part of Medicare. It is just as much a part of Medicare as Parts A and B (which you have to have in order to sign up for a public Part C Medicare health plan).
The fact that this so-called conservative or libertarian or whatever he is even uses liberal left-wing terminology (except — as note above — for liberals Reischauer and Aaron back in 1995) that insults and marginalizes public Part C Medicare health plan users like me and pretends that 75% of Medicare beneficiaries absolutely love “Medicare as we know it” means that Medicare will never be fixed. This guy is just another go-along-to-get-along group thinker that is part of the problem.
Dennis,
I am afraid you are the one with a poor understanding of Medicare. You seem to be confusing Part C (Medicare Advantage) with Medigap. Yes, Medigap is private, and yes some 80% of seniors have it, but it is a supplemental policy used to fill the holes in Parts A and B. Part C is a comprehensive alternative to A and B, and about one-fourth are covered by it.
No sir, I am not confusing Medigap with Medicare Advantage at all. I am a Part C beneficiary as well as a SHIP counselor. I am not at all confused. You seem to be.
I am totally irritated that you academics — both left and right — with no skin in the game do not look at the “real Medicare market,” the term invented by Reischauser and Aaron in 1995 to set the stage when they first proposed premium support for Medicare reform (a proposal they now apparently disavow). As a result you say things like in your comment that show no understanding of what seniors actually face and propose things that continually make the system worse.
My point is that when you academics lazily ignore the “real Medicare market” and you say things like “one in four (of us seniors) depend on private insurance,” you are totally accepting the left’s view of the Medicare world, a view that the market is divided in two, between
— the stupid taxpayer-sucking 25% of us seniors on Part C dealing with private insurers who are making fools of us and
— the 75% just ecstatically using Orginal Medicare Parts A and B, the good government-run option invented by LBJ and Harry Truman to save the world (and maybe casually adding a supplement “to fill in holes”)
You are wrong because
1. All people on Original Medicare are on either Original Medicare Part A or B, most are on A AND B (but some just are on A and a very few — relatively — are just on B). There is no binary split that all you academics talk about
2. Almost all Medicare beneficiaries on A and/ or B depend on a supplement, not 25% (by the way, you seem to misunderstand the statistics quite a bit; the 80% does not apply to those on Medigap; only 20% of Medicare beneficiaries depend on individually purchased Medigap insurance)
3. To the extent the terms private vs. public matter (they do not), Part C is public; that’s what PART means. I am sick of you academics and Obama and others insulting us seniors on Part C by claiming Part C is private and claiming we choose it for gym memberships
My goodness, but you assume a lot. I am on Medicare Part C myself — A Geisinger MSA program. And I love it. It is nothing at all like Parts A and B. $3,000 deductible, after which it pays 100%. Clean, neat, and simple.
Medigap is not only purchased by individuals, it is also provided by employers (and in some cases by Medicaid for dual eligibles). If you were not referring to Medigap with your 80% number, what WERE you referring to?
I agree with you that “almost all” beneficiaries get some form of supplemental coverage. Where did you get the idea I said only 25%? The 25% figure applies to Medicare Advantage.
Dennis you strike a clear note with this comment:
“insulting us seniors on Part C by claiming . . . we choose it for gym memberships”
My feelings exactly:
http://insureblog.blogspot.com/2013/04/the-media-trivialize-medicare-advantage.html
I sense a confusion here between public funding versus public provision.
About 90% of the money for Medicare comes from taxes (the rest comes from the Plan B premiums paid by almost all seniors).
That to me is public funding. If the actual insurance is administered by private carriers, that to me is an ultimately minor detail.
The public schools are examples of public funding plus public provision. The work is done by government employees. The British national health service is the same way.
Conservatives have been advocating vouchers for public schools for years. This would not lower taxes by a penny, but the claim is that it would produce better results. (and it might produce lower taxes in the long run, because private employees tend not to get tenure and long vacations and pensions.)
In health care, even some of the libartarians would preserve public funding but are opposed to public provision.
Bob
But the bigger issue is that Original Medicare covers less than half of a beneficiary’s healthcare costs on average and offers no catastrophic coverage or protection against annual out of pocket spending. It’s intellectually dishonest to talk about percentages of where Medicare funding comes from when Medicare has so little to do with a beneficiary’s total health care cost exposure.
But if you want to talk about that 90% “public funded,” that’s not intellectually honest either. The term “public funded” implies the Medicare beneficiary is not part of the “public.” The total funding (the 10% of Medicare funding that comes from current monthly premiums, the 50% of Medicare funding that comes from a lifetime of Medicare payroll taxes, the 40% of Medicare funding that comes from a lifetime of paying income taxes, and the other more than 50% of total that comes out of a beneficiary’s own pocket today) is all “paid for” by we, today’s beneficiaries depending on old we are.
On average someone around age 68 or less today “paid” totally for himself or herself between a lifetime of taxes, today’s premiums, and his or her OOP. Someone under 50 or so today probably loses big time unless they change the rules somehow. For people over 68 or so today, the more over 68 the better deal Medicare is/was for you in terms of “the public” paying your freight. Obviously someone that went on Medicare in 1966 when it started and never paid in made out the best.
Dennis,
Here we agree completely.
@Frank,
Interesting that you use tow trucks. Towing companies and doctors offices are incredibly similar:
1) 80-90% of their revenue comes from 3rd party payer AAA vs Blue Cross
2) Most are small independent non-franchised businesses
3) Most respond only after something goes wrong
One MAJOR difference is that doctors wash their hands before they work, tow truck drivers after.
Dennis, I have some trouble with your statement that Medicare covers only half of a beneficiary’s health care costs.
Let’s leave aside hearing aids and dental care and nursing home care. I do not think these are what you had in mind.
Medicare Part A pays for a hospital stay subject to a deductible of about $1100. I do not think there is any coinsurance in Part A.
Part B has a deductible of $150 but it does have unlimited coinsurance at 20%.
(I have never understood why some Congress did not add an out of pocket limit.
It would not he an earthshaking change.)
Anyways, I believe that in any given year about 50% of Medicare beneficiaries use little or no care. Another 40% use about $10,000 in Part B benefits, for which they would pay $2,000 if they had no supplements.
About 10% do experience real hurt if they do not have a supplement or a wraparound policy.
My numbers are rough, but looking at the above it sounds like Medicare is covering close to 80% of seniors’ costs, not 50%.
If I am wrong let me know.
Bob,
That was certainly true before Part D. I don’t have time to search for it now, but I remember Karen Davis testifying to it before Congress and Commonwealth published some papers on it. Also that seniors were spending 20%+ of their incomes on health care. I expect Part D has reduced that some. According to this KFF fact sheet — http://kff.org/medicare/fact-sheet/medicare-at-a-glance-fact-sheet/ — OOP spending as a % of income is now 15%, compared to 5% for non-Medicare people.
Did you just use “dictate” and free market in the same sentence?
Sorry, you can’t wander into an anti-socialist discussion … bottom line … customers/payers (market) dictate what they are willing to pay for services. The provider can ‘test’ a price, but it is always subject to market demand.
Government, insurers and patients are the market doctors are subject to. Any particular governmental regulations or insurer’s conditions are simply market demand muscles being flexed.
For Dennis K, and other proponents of the oft repeated “Medicare for all::
NO
With that same reasoning we could have “gasicare for all,” where car owners receive gas at 80 cents a gallon, and the govt pays this to the station owners…after they have submitted a claim and have not left out something, say, on line 29b.
Medicare is lousy insurance. It pays so little that 30% of doctors see NO Medicare pts, as reimbursement is often below overhead. And if a doctor sees Medicare pts, he cannot see a Medicare pt and bill him at anything but the (low) Medicare rate.
We as patients pay into Medicare insurance for many years, even to 40 years, before coverage can begin. Then you have to pay a monthly premium, and have a secondary supplemental plan as one hospitalization could bankrupt you.
And those Obamacare expanded Medicaid plan patients will reimburse even less.
Medicare does not cover three things that often affect seniors: hearing, vision (except cataracts and glaucoma) and dental.
Congress already has failed to give Medicare patients the benefits they were promised. spitalization could bankrupt you. where you get all you want, but the station owner is paid 80 cents a gallon…that is, BTW, after he submits all your gas insurance forms and did not leave out information on line 29b, for example.
At 65, you/we have to go on Medicare, with few exceptions (continuing work where you are already insured). If you are a doctor who sees Medicare patients, you cannot see a Medicare patient and charge him more than the govt schedule allows.
The govt is not really the single payer…it is the single underpayer, as noted above. Already 30% of doctors see no Medicare pts, as reimbursement is often below overhead. And the majority of other doctors limit their Medicare load.
Medicare is lousy insurance. It does not fulfill its promise to the beneficiary (patient) as it fails to pay a fair price for services. It does not cover three things a senior often needs: hearing, vision (except cataracts or glaucoma), and dental.
Medicare has the highest rate of denied claims which are then returned to the doctor’s office of any insurance provider.
My apologies. The last part of my note was patched in twice.