Thursday, December 15, 2011

Progressive Wyden joins conservative Ryan to "save money" by ending Medicare guarantee


Ignorance affects both sides of the aisle.
Sen. Ron Wyden (D-OR) and Rep. Paul Ryan (R-WI) are joining forces to reform Medicare in a way that both say will save the social safety net.
The plan (PDF), set to be officially unveiled at the Bipartisan Policy Center Thursday, would give seniors the option of choosing between new private insurance programs and a form of traditional Medicare.
Like the plan Ryan introduced earlier this year, this new proposal would still provide seniors with a set amount of money in the form of vouchers, but it’s more generous than Ryan had proposed because “premium support” would fluctuate with the actual costs of health care.

The bipartisan-duo is proposing an annual growth rate based on nominal gross domestic product plus 1 percent instead of basing it on the cost of inflation as Ryan originally wanted, something that would not have kept up with skyrocketing health care costs.
Beginning is 2022, seniors would be forced to use their vouchers to buy coverage through a Medicare “exchange” — which would also include private insurance plans. Unlike Ryan’s plan, private companies would have to agree to offer plans at least as comprehensive as Medicare, and they would have to agree to cover any senior regardless of medical history.
Seniors would be responsible for paying out of pocket for any costs above any beyond the voucher.
Read the rest at Raw Story
by David Edwards

Affordability is never an issue for a currency sovereign that is the monopoly provider of a non-convertible floating rate currency of issue. The only issue is the availability of real resources in relation to effective demand. The objective is not to limit access to existing resource or fail to create enough future resource to meet demand, but to match existing and future resource with effective demand.

Price is not the way to ration health care in order to control costs. This undermines effectiveness in providing care, the purpose of the health care system. The way to control costs while providing optimal care is by improving the efficiency and effectiveness of the system rather than starving it of money.

Make no mistake. This ends the Medicare guaranteed benefit as its exists, effectively killing Medicare as we know it. Medicare as we know it is one of the most successful and popular government programs. "Lack of affordability" is not a sufficient reason, because affordability is a bogus issue.

UPDATE: Jason Links comments at The Huffington Post
Ryan-Wyden Medicare Plan: Great Political Trap, Dubious Policy
Anyone who thought that the 2012 election battle over health care would be a simple matter between President Barack Obama and a candidate who wants to privatize Medicare and "repeal Obamacare" is waking up to new complications today, as Rep. Paul Ryan (R-Wis.) and Sen. Ron Wyden (D-Ore.) are teaming up on a new Medicare reform plan that has both men pitching and yawing leftward and rightward from their previous positions.As Brian Beutler and Benjy Sarlin put it, this plan is going to "turn the fight over Medicare on its head." It could also alter the competitive dynamics of the 2012 race in significant ways. Will the plan improve the lives of ordinary Americans, though? That's debatable.
Ryan and Wyden rolled out their idea in an interview with Lori Montgomery in the Washington Post, and the conventional way of looking at the matter is that Wyden is willing to embrace health care subsidies in the form of "premium support," while Ryan is now open to "maintaining the current Medicare system." Ryan also makes a significant concession -- the Medicare subsidy would be tied to the ebb and flow of health care costs instead of inflation. Ryan's previous plan did the opposite, which is what made it a joke: health care costs have risen ahead of inflation, which meant the subsidy he offered would likely get less and less valuable over time, until it was no help at all. The essence of Ryan's previous Medicare plan was that he'd save the government money by ceasing to spend it altogether, while pretending otherwise. Under Ryan-Wyden, those "premium support" vouchers are more valuable, but you also don't affect the budget bottom line as significantly.
What you do get from this plan, however, is an influx of taxpayer cash headed in the direction of private insurers.... [Emphasis added]
Private insurance introduces significant inefficiency into the the US health care system in the form of added administrative costs and rent extraction.
...So, we have a policy whose benefits on the American public are, at best, dubious -- from the pair's admission that it will have a limited budget, to the fact that it will weaken Medicare's bargaining power, to the real concern that it will toss seniors into uncertain consumer waters. In short, it looks pointless....
What we do have is greater wealth extraction in the from of economic rent, and a worse deal for seniors than they have presently — all in the name of "saving money." What is actually involves is moving money from government transfers to private coffers, while lowering effectiveness and efficiency, as Links goes no to show in his post.

So far, the president gets it. But will he cave under Beltway pressure as the campaign heats up, Links asks?
 White House Communications Director Dan Pfeiffer says: "We are concerned that Wyden-Ryan, like Congressman Ryan’s earlier proposal, would undermine, rather than strengthen, Medicare ... The Wyden-Ryan scheme could, over time, cause the traditional Medicare program to 'wither on the vine' because it would raise premiums, forcing many seniors to leave traditional Medicare and join private plans. And it would shift costs from the government to seniors. At the end of the day, this plan would end Medicare as we know it for millions of seniors. Wyden-Ryan is the wrong way to reform Medicare."

9 comments:

dave said...

why oh why must we continue to be "represented" by "people" who couldnt give a rats ass about US? who the hell votes for these asshats?

Dan said...

The US has the highest per capita health spending in the world and yet we fall behind on many health indicators overall, people have considerable access issues, and payment structures tend to reward the provision of more services over patient outcomes and coordination of care.

Right now, the Medicare fee schedule has helped drive primary care into the ground while encouraging doctors to take advantage of the schedule by providing higher costs treatments and intensive care that often times doesn't even raise the quality of people's lives. Aside from that, the FFS model encourages the fragmentation of services that leads to lead to worse patient outcomes.

At least this proposal gets the ball rolling in terms of thinking why costs are going up. The federal government's concerns about affordability may be misguided, but the factors driving up costs have real effects on people's lives and the provision of care.

Essentially, the proposal applies some of the PPACA principles to Medicare: regulated exchanges, competitive bidding, sliding subsidy scales, etc. People like having choice of plans and the reform holds that plans must provide the actuarial equivalent of the benefits provided by Medicare. And anyways, long term we don't even know how likely this proposal would cut costs anyways. I can tell you from experience in Massachusetts that people in this state like the system, the access to care, the quality of care, and the choice of plans. It's no accident Mass. is one of the leaders in the areas of health care and consistently ranks at the top in regards to access, quality, and overall health measures. There's obvious problems with cost still, but that again goes back to payment structures.

dave said...

the obvious problem of cost is that its too expensive. kiss it, keep it simple stupid. single payer, medicare for all

Anonymous said...

I like Mosler's plan. Everyone gets 4k a year for healthcare. You have to get a physical and if you're clean, at the end of the year, you pocket the rest. Beyond that, Medicare takes over.

Rates will be set by shopping and consumer communication; price vs. outcomes. Perhaps we can also compare cost for services and procedures with other countries (modified by provider overhead).

Unforgiven said...

Perhaps we could also reward providers that prove that their method results in better health outcomes at a lower price. Give them a percentage of the national savings.

Just remember to dial in more spending in other areas to maintain stable aggregate demand.

Tom Hickey said...

The difficulty with proposing a plan is the complexity of the institutions and issues involved. Getting this right is going to be pretty close to rocket science. It is not just a US challenge either. It affects the entire world, since health care has broad economic implications that influence matters like the efficiency and effectiveness of the labor force. To approach this chiefly as a problem of affordability is myopic. Let's determine what is optimal for the society we want to live in and then build it.

Unforgiven said...

Tom -

Not that I disagree with you in the long run, but it seems we could use an interim solution that's less convoluted than what we have now. Consensus what's optimal for the society might be a rather long way off. If you thought consensus on what's optimal for the economy has been difficult to come by.....

Tom Hickey said...

@ Unforgiven

I am talking about what the debate should be about instead of shooting from the hip. Lay the cards on the table along with as much data and hard evidence as possible, and from there craft compromise options that are feasible politically. Then, select from those.

Tom Hickey said...

The basic kerfuffle in political economy today is over the appropriate balance of public and private. The right is ideologically committed to a completely private solution and the left to a completely public solution. A politically feasible solution lies somewhere in between these extremes. The problem with "hip shots" is that they don't really illumine the underlying issues for the center, which ultimately decides. So we need to have an open and comprehensive debate of the issues, showing the advantage and disadvantages of each policy proposal instead of settling for a half-assed compromise that is heavily influenced by special interests, as is usual. Health care is to big and important to get even a little wrong.