The Coming Battle for Medicare

The Coming Battle for Medicare

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Republican Vice Presidential pick Paul Ryan isn’t the only one Democrats are piling on this week. The knives have come out for Senator Ron Wyden, the Oregon Democrat.

I guess that isn’t a surprise. If Ron Wyden is right on Medicare then so are Paul Ryan and Mitt Romney.

The fundamental problem here is that the Democrats have decided that their best path to victory in the November elections is to say that the Republicans want to destroy Medicare as we know it and that the Democrats can preserve it.

The truth is that no one can preserve Medicare as we know it. There isn’t a prayer that your father’s Medicare will be around in 10 years. There is a legitimate policy debate going on about the direction we will have to go with it.

There is just plain going to be less money to spend on senior health care than there would have been if we let the program continue on its present unsustainable track. Health care providers and patients are going to have less money.

The question is who will control that money.

Conservatives generally want consumers to be in the driver’s seat—give seniors a defined contribution and let them decide on which health plan, and on which health plan’s approach to health care management, they want to spend it.

Progressives generally want to continue the defined benefit approach—guarantee everyone a benefit and use the regulatory power of government to make the dollars stretch to pay for it.

Both directions would lead to a Medicare program that looks very different than the open-ended entitlement we have today—one that because of its open-ended nature and the huge number of baby boomers about to retire will bankrupt us.

Late last year, Ron Wyden and Paul Ryan came along with a compromise—I will suggest an elegant political compromise.

First, they both agreed the current system is unsustainable—perhaps Ron Wyden’s real sin in an election-year when the party-line is that Medicare as we know it can be preserved and Republicans need to be defeated because they will kill it as we know it.

Then they found a way to craft a plan that took key elements from both the Democrat’s defined benefit and the Republicans defined contribution philosophy. For the details, see my post, Paul Ryan and Ron Wyden Blow the Medicare Reform Debate Wide Open!

At a time most Americans are upset that Republicans and Democrats can’t find a way to solve the big problems we face, Wyden and Ryan did just that on Medicare—they found a way to preserve the defined benefit baseline Medicare entitlement Democrats are insisting on while giving Republicans the consumer-centered defined contribution approach they want.

It was really elegant policy. But also inconvenient policy because Democrats had already decided they were going to make this election about their preserving Medicare while charging Republicans want to kill it.

So, with Ryan now the apparent Republican Vice Presidential nominee, the imperative to target Ryan’s approach to Medicare reform becomes all the better target and with him Wyden. Because if Wyden is right then the Democrats are wrong—or worse not telling the truth about Medicare.

That may be a necessary political strategy for Democrats during this election season, but my money is still on Wyden.

After November comes January.

My bet is that there are likely only two outcomes come January:

  1. Romney wins the White House and with it the Republicans capture the Senate and hold the House. In this case, the Wyden-Ryan Medicare reform proposal will be on top of the new administration’s agenda and Ron Wyden will be in the catbird seat. Republicans saw what happened to Democrats when they passed health care reform without a single Republican supporter. Republicans will be willing to round a lot of edges to keep Wyden on board and perhaps get a couple more Democrats.
  2. Obama wins but the Republicans take the Senate and keep the House. While a Republican victory in the Senate isn’t a certainty, the odds look a lot better than not. Now, either Republicans and Democrats compromise on the key issues or the political gridlock, and financial uncertainty that accompanies it, continues doing lots of damage to the economy. How will both sides eventually compromise over the key Medicare issue? There is only one path to Medicare compromise on the table—Wyden-Ryan.

Ron Wyden’s solo effort to actually find common ground and fix things now puts him in a very lonely and uncomfortable spot—until about the first Wednesday in November.

Maybe actually trying to be bipartisan and telling the truth will have a payoff after all.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

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68 Comments on "The Coming Battle for Medicare"


Guest

Lance Moore?WR, , Groin

Guest

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Guest
Jan 14, 2013

Good points, and I look forward to your book.

However, Medicare is only underfunded if the current benefits package never changes.

The Ten Commandments did not mandate that Medicare pay for every hospital visit, or that Part B even exist.

I do not want the government to cancel Plan B, but it could and then what would be underfunded?

Our defense budget is also underfunded by trillions if we assume we must have over 100 foreign bases.

We could have no foreign bases next month if we wanted to. Now that might hurt innocent nations, just as slicing off parts of Medicare would hurt innocent seniors.

But these deficits are not a force of nature!

bob hertz

Guest
Henry Markant
Jan 14, 2013

An actual decrease in life expectancy due to obesity in the developed world could be the shock the public needs to become concerned about health habits. In order to stave off an imminent crisis, “universal” programs will have to be paid for by substantial new taxes, increased federal debt or individual health insurance savings accounts that will emphasize preventive medicine financed by nontaxable deductions from gross income—or a combination thereof. The only alternative is to slash benefits. According to its board of trustees, Medicare will be insolvent before 2019 since its so-called “Trust Fund” is already used to compensate for monthly shortfalls.

Before 2017, Medicare payments will amount to 15 percent of GDP and require 24 percent of all federal income taxes if changes are not made in 2012. The situation is clearly unsustainable. Of the federal budget 84 percent is non-discretionary, consisting of the following: Defense, 23 percent; Social Security, 20 percent; Medicare & Medicaid, 19 percent; interest on the national debt, 5 percent (and going up substantially); plus “other mandatory,” 17 percent. These figures do not include TARP (Troubled Asset Relief Program) bailouts, Quantitative Easing, or emergency funds for foreign aid or natural disasters. There is absolutely no hope of paying our national (and state) debts. This charade of solvency of the “Ponzi Scheme” cannot end well.

If we were to spend 15 percent of GDP today, that would take 95 percent of federal revenues that are already at 19.5 percent of GDP. In addition, Medicare is $29.9 trillion (plus) underfunded; how much more depends on the cost of the Medicare drug benefit. A Heritage Foundation report estimates the unfunded liabilities for the three parts of Social Security will be $10.4 trillion, Medicare $61.6 trillion, and the new Medicare drug benefit will add $16.6 trillion—or $88.6 trillion total. Without a new universal health care plan somehow fully paid for, current Congressional Budget Office estimates are that the US budget deficit just for Medicare will be 82 percent of GDP by 2019—truly unrealistic!

You can buy this book now on any of the following websites:

Strategic Book Publishing Rights Agency: http://sbpra.com/HenryMarkant/

Amazon Books: http://www.amazon.com/Coming-Crises-Their-Solutions-ebook/dp/B00A2WZ4CK/ref=sr_1_1?s=books&ie=UTF8&qid=1357573018&sr=1-1&keywords=coming+crisis+henry+markant

Barnes and Noble Books: http://www.barnesandnoble.com/w/coming-crises-and-their-solutions-henry-markant/1113749628?ean=2940015922875

Guest
Aug 21, 2012

I used to live in Hyde Park in Chicago. That area is filled with limousine liberals, who say that they are advocates for the poor, but want nothing to do with the poor people who live next to them.

Guest
DeterminedMD
Aug 20, 2012

Wow, just got home and read this at a site who, full disclaimer here about the link is a radio commentator who hates PPACA as much if not more than me, and is the story revealing, again to me mostly, of how much a hypocrite and projector of his poor judgment, even if moreso by wife Michelle, Mr Obama really is at the end of the day:

http://www.americanthinker.com/printpage/?url=http://www.americanthinker.com/articles/../2012/08/romney_really_needs_to_fight_back.html

Well, you read it and decide for yourselves.

Cheers.

Guest
DeterminedMD
Aug 20, 2012

Oh, and by the way, probably a minute point to the Medicare argument as a whole, but what of the minority sized population on Medicare as disability patients, who could be on Medicare supports for 3 or more decades depending on what disability gained them access in the first place? And the fact that more people are getting disability determinations of late, coincidence on Obama’s stay in office (?), so what do we do should this population become a sizeable faction for the country?

Sorry, I do not subscribe to this ridiculous adage that health care “is a right”, but care should never be refused for casual and selfish reasons either. You never really hear responsible health care advocates who say that everyone should get the full level of care irregardless of cost, because, hey, responsible people don’t say stupid things like that! There has to be boundaries, limits, time to say stop or no more! It is almost always people who have the least to lose and the least to personally offer in the health care system who advocate for this infinite expectation with care.

And too many idiots listen to them and believe it!

Guest
DeterminedMD
Aug 20, 2012

And by the way, to the above discussion about altruism, where’s the altruistic nature of our elderly population in saying without much hesitation that they have had a hopefully fair share of opportunity to get to the age they are now ,and at least for organ transplants make a spontaneous, realistic choice to not take an organ that someone else might make last a sizeable longer period of time then what someone over 70 could do?

Again, using a term or a stat to just favor one side of an argument is not so strong and indefensible, when the other side could use it as rebuttal, hmm? There is no black-white line in this debate, but you let Republocrats run the debate, you’ll end up saying what you denied 5 minutes earlier.

Face it, Medicare was not created for a population that is now seeing a sizeable percentage live past 75 years old. Who is going to argue this point is false!?

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DeterminedMD
Aug 20, 2012

To debate Medicare as is and see no real limits to extended care that only prolongs life, and does not really improve quality of life, is an empty argument and only self serving to a population over 60 that isn’t accepting the boundaries of life.

Everything involved in health care is finite, costs included. The proponents are already fully accepting of what will be IPAB as it stands, oh, but as long as they do not mess with the proponent group and their cronies.

Anyone who thinks this IPAB is benign and beneficial to society, how does that sand taste in your mouth? I know you haven’t seen light since March 2010!

Guest
Peter1
Aug 20, 2012

“To debate Medicare as is and see no real limits to extended care that only prolongs life, and does not really improve quality of life, is an empty argument and only self serving to a population over 60 that isn’t accepting the boundaries of life.”

Empty argument!? Empty how – you mean no patient involvement? Who are you going to delegate to make those decisions FOR THE PATIENT? Is this part of the GOP “Patient Centered” health care?

Determined, were you part of the “DEATH PANELS” crowd? And who would you like to make your decision for YOU?

Guest
DeterminedMD
Aug 20, 2012

It is amazing what people infer from one’s writings, and just making shallow, false allegations will attempt to just shut one up for having the unmitigated gall to not walk goose step in line with the Democrat “PPACA is supreme” mentality some just spew here!

Uhh, reality call, not supporting PPACA does not make one a Republican hack, as I have clearly called out that failed party as well for their repeated shortcomings. No, we here in the middle find both extreme sides of the aisle nauseating and pathetically limited in trying to help this country out of problems. If we had a viable third party candidate, we would actually see unity from the Republocrats and see their vile attack dogs unite on said third party candidate. Can’t upset that false premise of choice for voters, eh!?

And really, who here who is not a partisan hack does not see IPAB become a potential death panel-type process, not ordering deaths as these Democrat blind loyalists want to falsely proclaim the process would be, no, just setting choice with a financial price tag that will exclude those who don’t have the finances. You all really think PPACA will make for a one system process for health care? Wow, anyone who proclaims that makes the Wizard of Oz character a true god!

No, we will still see at least a 2 tiered system, and guess who NEVER will stand in line with us, your politicians, big business leaders, and others who have fleeced and manipulated the public out of funds in their greedy zeal to keep the addiction of money flowing in their proverbial veins. That’s why Nancy didn’t want her cronies to read the bill, because truth is not part of the process that the Democrats forced on the country. Just like the Republicans did in forcing the ongoing wars in Afghanistan and Iraq on us 10 years ago.

So, put your blind faith in callous, selfish and soulless politicians, and now watch them spin the Medicare debate where it will not really go, into the laps of voters, because politicians do not want you to realize that there is not enough money to keep all your mommies, daddies, grandparents, Aunts and Uncles, and anyone else over 70 you hold so near and dear to live another 10 or more years,that death is not an option for Americans to consider.

And any physician who can’t look you in the eye and tell you that he/she cannot cheat death, that human beings were NOT meant to live past 70 or so without much heartache and pain is not only culpable for this tragedy being forced on this country, they are co-conspirators.

How’s that for a retort rant? The hypocrisy from both Presidential candidates alone could choke a room of 1000 thinking people and not even be phased when it runs out to find the next room when done. Threads like this are not about debate at the end of their runs, just who can shout down and win applause from their partisan brethren, who would then sell you out for getting up the ladder tomorrow.

Now that is politics!

Guest
Peter1
Aug 20, 2012

“How’s that for a retort rant?”

Yes, just a useless rant. You can either write to express an opinion or you can’t put logical thought into plain english then claim others interpreted it wrong.

Guest
DeterminedMD
Aug 20, 2012

Almost as useless as you alleging I am a Republican hack and advocating for death panels. This is a heated debate even outside the partisan jockeying, because it is about limits in care. Threads like this amount to nothing just spouting statistics and academic drivel that just wants status quo to be maintained.

Take care of a patient for a couple of months and get back to me!

No one seems to attack my occasional comment about realistic limits to our lifespan being about 70-75 with a realistic quality of life thereafter. While that is good because there really is no argument against it, it does strike me as odd that no one wants to extrapolate from it.

Personally, I hope this Medicare debate burns both Obama and Romney, and puts the current older population right in the crosshairs of the rest of the population that needs the reality check!

Guest
Aug 20, 2012

Hanson’s position is that all societies have altruism. Sometimes the altruism is restrictred to one’s own tribe or race or religion, but altruism is ever present.

I think you were hinting that some of our Republican social darwinists have no altruism. Hanson would disagree. They are in fact altruistic to other Republicans.

Guest
Aug 20, 2012

To Determined MD — you may want to read a libertarian economist named Robin Hanson on health care.

His position is that health care is a ‘signal’ of our altruism. People and countries support health care as a way to show others that we care about them. In Hanson’s view, this emotion is stronger than economics or rational policy.

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DeterminedMD
Aug 20, 2012

Altruism with a blind eye to boundaries like cost and efficacy of treatment does not serve dispenser nor receiver of services well, much less the whole community that is invested in the process too.

I think people use terms a bit too liberally at times to try to paint opinions like mine are insensitive or impolite. Yet, docs like me are the ones front and center who have to explain where things lead, the bean counters and political hacks who just tell us how it “should be” never jump in to substitute and make it easier, neither for physician nor patient. And that is why people like me are so outraged we have politicians and accountants try to tell us what the future will be when they can’t even be attentive or honest what the damn present is like now!

Again, don’t quote us what the AMA or AARP have to say, they do not represent the majority of people who could belong to these groups. You know why we don’t hear about polling from doctors in general or seniors over 70 as a whole? Because either the pollsters are deterred by the powers behind the scenes to not get the truth, or, the respondents are too afraid to speak the truth or just hang up or walk away when propositioned to participate in a poll. Frankly, I don’t blame them for either response.

God knows no one really wants to hear the truth these days, and god also knows polls are only as good as who is getting the data anyway!!!

Hey, if Medicare is so great, why don’t you poll general private practice physicians and ask them if they take new Medicare patients, and how much administrative time they have to pay for in using that program if they do participate? Do you really want to publicize those numbers?!

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Pat S
Aug 20, 2012

“Hey, if Medicare is so great, why don’t you poll general private practice physicians and ask them if they take new Medicare patients”

Done! :http://content.healthaffairs.org/content/31/8/1673.abstract

Turns out that more physicians will accept new Medicare patients than will accept new private insurance patients.

This, by the way, is a real scientific survey, not a web or fax survey by a physicians recruiting firm with a voluntary response rate of less than 5%.

As to the admin time, my experience as a private practice physician has demonstrated that the overhead expenses of dealing with Medicare are not just lower, but much lower, than private insurance. In fact, our billing agent calculates that billing private insurance costs her seven times as much as billing Medicare, and results in much slower payment times.

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DeterminedMD
Aug 20, 2012

Yeah, until you have an audit for accusations of fraud for using the wrong CPT codes. Ask those same physicians about that issue looming over everyone’s heads. And maybe I am living in a place that is exempt from this poll’s results, but I do not hear even 50% of colleagues in my region taking new patients at least, that going on for the past couple of years now. So who do you believe? Me, I believe what people tell me to my face that are in the middle of the pit, battling for survival not only for themselves, but their patients too.

Oh, yeah, maybe ask patients looking for new providers that same question, how many calls did you have to make before finding a provider who not only would take Medicare, but see you in a timely fashion. Did the poll ask that too?

And by the way, to Pat S your link that I could access was about Medicaid, so unless you mislinked the article and could give us an access password to read the whole thing, ahh, I don’t see your rebuttal so directly.

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Pat S
Aug 20, 2012

READ THE WHOLE ABSTRACT, NOT JUST THE TITLE. The article title is about Medicaid, but the article, as the abstract makes entirely clear, reports a survey that included physicians’ willingness to accept new patients with Medicaid, Medicare, and private insurance. The results show that while 17% of doctors would refuse new Medicare patients, 18% would refuse new private insurance patients.

To spell out the math, 83% of physicians indicated they would accept new Medicare patients.

Guest
Aug 20, 2012

Of course one must subscribe to the idea that altruism is a virtue in order to appreciate ideas like that.

Guest
DeterminedMD
Aug 19, 2012

And by the way, it is nothing less than disingenuous in this alleged argument the young owe the old in being mandated to have health insurance. No one younger than 55 is out there pushing this failed premise. To the general readership, you think it is bad now, wait ’till more than 25% of boomers are older than 65, then entitlement cries will make jet take offs sound like bedroom white noise machines!

Guest
DeterminedMD
Aug 19, 2012

Why are morality considerations irrelevant, oh, I get it, because it may bring some clarity to the issue. Why are we considering prolonging the lives of people who have lived a reasonable period of time? Because the needs of the few outweigh the needs of the many.

That certainly is the mantra of the Republican party, and Democrats just blur it with the superficialness of claiming concerns for the downtrodden, but, their party elders mirror the mentality of Republican well off brethren and try to avoid being caught saying “screw the poor, they work for us!”

You can’t really be arguing containing Medicare costs and include organ transplants, dialysis indefinitely, and full court ICU stays for people with end stage chronic illness.

If you do, disingenuous at least, clueless most likely, or just partisan to whatever special interests trump realities of cultures with 300 million or more citizens. Numbers don’t lie in the end if used responsibly!

Guest
Aug 19, 2012

Just forgetting about any morality considerations, let’s look at the economics.

An 83 year old who gets a transplant of any kind is out of the work force.

He will never pay any payroll taxes again. He will pay income taxes if his income is over about 40K a year, given current deductions for seniors.

It is not an accident that socialist countries used to deny transplants or, for that matter, dialiysis, to persons over age 65. This was true in Poland and a number of other nations.

Tbere is certainly nothing wrong with younger workers chipping in payroll taxes to make life longer and better for older persons.

What is starting to grind in America is that these younger workers have what in Yiddish is called ” bupkes” for their own health insurance. (i.e. nothing.)

Guest
Aug 18, 2012

There is a lot of good information in these posts, but personallyI am going a little nuts on measuring the quality of national health care by mortality rates

I know that journalists have to use something to measure health care, so this is not a personal diatribe in any way.

But let me be blunt.

A child with a hole in his heart might live 15 extra years if he gets into the Mayo Clinic.

At the end of this period. the health care plan which covers his family might be charging $2,000 a month.to all orhr employees.

Or else his parents have declared bankruptcy.

Are we ahead from this gain in mortality?

I have my doubts. Heroic medicine is overrated, in my view.

In the USA , a 94 year old like Gerald Ford could be scheduled for bypass surgery. He died before the scheduled operation.

This could legitimately have helped Mr Ford, an outstanding person in many ways, to live to age 98.

Big deal, in my view.

:Longer mortality costs society money. David Cutler says otherwise but I
question his assumptions.

For me, I would measure national health system based on how many families are deeoly in debt from health care.

Canada, Britain, Germany and France win hands down on this scale.

I could not care less about mortality rates.

I may not be right — comments are welcome!

Bob Hertz, The Health Care Crusade

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DeterminedMD
Aug 19, 2012

I agree with the above. While quality of life is individual specific, there has to be boundaries at least with those over 65.

Really, organ transplants for 70 year olds like Cheney!? My only hope is the immunosuppressant meds do the damage they often do even in healthier younger patients. And this is not just a political swipe, look at liver transplants for addicts. But, people can’t handle the truth, eh?

Guest
Aug 19, 2012

At least one well-known investment guru might take issue with the age 65 cutoff. He was older than that when he got a hew heart and is still going strong at 83.
http://www.cnbc.com/id/48635888

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DeterminedMD
Aug 19, 2012

Ok, but who would have been next on line for that heart who was younger, that could have contributed as much if not more, watched his/her children grow up, that could spread the word of appreciation better?

Let’s face it, people getting major organ transplants don’t deserve it, they pay for it, and let’s face it even more brutally candid, don’t understand their time is done. Is this the face of Medicare come the next decade: oh, so an organ failed, we’ll just put someone else’s in you to live another 3-5 years and have more chronic problems to cost the system even more to keep a greedy life present longer?

Gimme a break!