Monday, December 19, 2011

A Bold New Plan To Get Rid Of Medicare

And this one comes with the backing of a "liberal" senator! David Dayen:
In a surprise move, Paul Ryan found a Democratic partner to propose a new Medicare plan that does not fully privatize it, but instead keeps fee-for-service Medicare as an option alongside a premium support plan. This is the same proposal that the front-running Republican Presidential candidates have made.
From the Center on Budget and Policy Priorities:

Its sponsors say the proposal would avoid shifting health costs to beneficiaries, but that’s not so.   It would replace Medicare’s guarantee of health coverage with a flat payment that beneficiaries would use to help them purchase either private health insurance or traditional Medicare.  It also would limit the growth in spending per beneficiary to the growth of gross domestic product (GDP) plus one percentage point (presumably on a per capita basis).  But health care costs have risen faster than that for several decades and, as Chairman Ryan acknowledged at a December 15 briefing, if that faster rate continues, the amount of the government’s premium support payment to beneficiaries would be cut back — with more of the costs of coverage shifted to beneficiaries — unless Congress intervened and made offsetting cuts elsewhere within Medicare.

Specifically, Ryan-Wyden would give Congress a period of time in which it could cut provider payment rates or make other changes to limit the rate of growth of Medicare spending before the premium support payments were automatically cut.  But Congress would not be — indeed, could not be — “required to intervene.”  And, Congress could well fall short of mustering the requisite majorities to enact alternative cuts — including 60 votes in the Senate — in the face of likely opposition by providers and other health-industry interest groups.

Many media accounts portrayed this part of the plan incorrectly (due to a confusing sentence in the proposal document that the sponsors issued yesterday), reporting that beneficiary premium support payments would be shielded — rather than cut — if health care costs rise faster than the target.

Ryan and Wyden also claim that their proposal guarantees that traditional Medicare “will always be offered as a viable and robust choice.”  Unfortunately, that’s not the case either.   Under a premium support system, traditional Medicare very likely would attract a less healthy pool of enrollees, while private plans would attract healthier enrollees (as occurs today with Medicare and Medicare Advantage).  Although the proposal calls for “risk adjusting” payments to health plans — that is, adjusting them to reflect the average health status of their enrollees — the risk adjustment process is highly imperfect and captures only part of the differences in costs across plans that result from differences in the health of enrollees.

Inadequate risk adjustment would mean that traditional Medicare was only partially compensated for its higher-cost enrollees, which would force Medicare to raise beneficiary premiums to make up the difference.  The higher premiums would lead more of Medicare’s healthier enrollees to abandon it for private plans, very possibly setting off a spiral of rising premium costs and falling enrollment.  Over time, traditional Medicare could well cease to be financially viable and could unravel — not because it was less efficient than the private plans but because it was competing on an unlevel playing field in which private plans captured the healthier beneficiaries and, thus, incurred lower costs.  The fact that Ryan-Wyden would allow private plans to tailor their benefit packages to attract healthier beneficiaries and deter sicker ones only makes this outcome more likely.
So yeah, this is a really horrible idea.

And it's hilariously insane politically, because the one chance the democrats seemed to have of a victory this November was running on the fact that all the Republicans voted for Paul Ryan's plan to destroy medicare.

Before any of this, I actually kind of liked Ron Wyden, because he was fairly liberal and had some interesting policy ideas. No one can no for sure what motivated him to do this, but my best guess it's another case of Egoism running rampant in the Senate.

Let's be clear about the stakes of this decision: Wyden is teaming up with the person who wants to end medicare to propose something that would weaken medicare at best. Additionally, he is fucking over every single person in his party by making their reelection chances that much harder.

Why would he do this? Well Dayen hints that this a retaliation against Obama for dropping his idea out of the health care bill, which seems about right considering the pettiness and entitlement we often see in the Senate. The other option is that he's an attention whore, and considering all TV invites and good press the DC media gives any democrat who wants to cut medicare/start stupid wars, I could see this being an option too.

At the end of the day, his actions are what's most important, and they merit him a strong primary challenge. The fact that I haven't seen that option even mentioned tells you just about all you need to know about the shittiness of the democratic party.

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