New York Times reporter Robert Pear and his editors try to resurrect a zombie proposal by the anti-Medicare zealots to displace the guaranteed benefits structure of Medicare. Its just another attempt to push Paul Ryan’s voucher system that would systematically reduce benefits and shift rising health care costs to individuals, despite the fact this flawed approach has been repeatedly rejected by Congress and opposed by the vast majorities of Americans who want to preserve, not undermine, Medicare.
Worse, Mr. Pear tells us that “some Democrats” all nameless, support this approach for which the failed Super Committee has “built the case.”
Though it reached no agreement, the special Congressional committee on deficit reduction built a case for major structural changes in Medicare that would limit the government’s open-ended financial commitment to the program, lawmakers and health policy experts say.
Members of both parties told the panel that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government.
Pear tells us what we already know, that the GOP loves this idea — they’ve always wanted to dismantle a successful national health care system –and that it’s been endorsed by Newt Gingrich and Mitt Romney. Now there’s a validation.
So which Democrats are signing on to this pernicious GOP scheme? Pear doesn’t cite a single Democrat by name, unless you count Barack Obama and his embrace of a similar system for non-seniors in the Affordable Care Act. Would it be too much trouble to identity these Democrats by name so that voters can confront them when they go home?
So what’s the “case” the Super Committee “built” in support of this scheme? Pear does a bait and switch:
Competition among private insurers has already driven down costs for prescription drug coverage under Medicare. Medicare’s drug benefit is delivered entirely by private insurers. In addition, one-fourth of the 48 million Medicare beneficiaries are in private Medicare Advantage plans, offered by companies like UnitedHealth and Humana, which cover a wide range of doctors’ services and hospital care.
It’s apparently too much trouble for the Times to inform its readers that there’s little if any evidence that “competition” has “driven down costs” of drugs for Medicare. What we know is that the drug costs under Medicare were less than some feared, but they remain significantly higher than drug costs in other advanced nations. They’re also higher than the drug costs faced by the more effective Veterans Administration, a highly rated, totally federally operated system with no private insurers “competing.”
As Dean Baker and others have repeatedly reminded us, the VA pays substantially less for exactly the same drugs — partly because the VA can bargain for price, but Medicare can’t (thanks to GOP and conservaDem coddling of drugsters and private insurers) — and the VA offers health care even more highly regarded than regular Medicare. Never mind the subsidies the drug companies get from extended patents and non-compete agreements against generics, all ratified or made worse in the ACA.
To be sure, the Medicare drug benefit has been a boon to seniors, but part of the higher price we pay for its expensive private structure is to create and perpetuate a private insurance bailout scheme that becomes self perpetuating. The drugsters and their private insurance supporters are some of the largest contributors to politicians’ campaigns. The 99% are paying for a protection racket for the 1%.
As for evidence that competition among private insurers will drive down general health care costs, where’s the evidence? Aside from the fact that, as Krugman (citing Ken Arrow) tells us, health insurance is not amenable to market competition, the evidence the Times/Pear cites is that lots of seniors sign on to private insurance under Medicare Advantage. But Pear neglects to mention that the private insurers under Medicare Advantage survived and grew by receiving an average of 14 percent subsidy paid by Medicare. When the ACA proposed to reduce that subsidy the private insurers squealed, telling seniors in scary tv commercials that Congress was taking away their Medicare.
So the single piece of evidence Pear cites doesn’t show that this scheme will reduce the federal budget, if that is the problem that needs solving; it will instead likely increase the budget costs unless the government simply limits the vouchers as costs rise and shifts those rising costs onto seniors.
It’s inexcusable that the Times cites mainly private health industry analysts and the GOP’s Jeb Hensarling (R. Texas). Pear also sites budget hysteric Alice Rivlin, who can’t seem to grasp that the only way this “helps” the budget is by forcing seniors to pay more or make do with less health care, while actually making the health cost problem worse. Dean Baker notes the CBO has already done the math:
The Congressional Budget Official projected that a Republican plan along these lines, that was approved by House earlier in this year, would raise the cost of Medicare equivalent polices by $34 trillion over the program’s 75-year planning horizon. While this plan would save the government money by reducing its payments for Medicare, it would mean that future generations of workers would pay far more for health care in their retirement. The cost of Medicare equivalent policies would far exceed the typical retiree’s income by 2050.
The Times couldn’t find a single supporter of maintaining Medicare’s guaranteed benefit structure, to point out how dependent many seniors are on Medicare and how that and other guaranteed federal support keeps millions out of poverty.
Nor could it find a prominent economist to explain that its not the aging population or Medicare per se that is causing the real problem. The real problem is the rapidly rising costs of the private health care system. If we fail to bring our private health care costs more in line with the costs paid by other nations for equal or better care, it’s the economy that tanks, not just Medicare for seniors. Simply dumping seniors (or anyone else) into that over-priced system when we know that government-sponsored systems like Medicare and the VA consistently provide health care at a lower cost means that you don’t care about health care, don’t care about seniors and don’t care about the threat the private health care system is posing to the American economy.
Paul Krugman on Paul Ryan’s flim flam budget plan.