By MERRILL GOOZNER
Everyone agrees that controlling health care costs is the key to bringing long-term federal budget deficits under control. Government spending on Medicare for seniors and Medicaid for the poor has grown nearly twice as fast as the rest of the economy for decades and is by far the largest component of future projected deficits.
But government funded health care programs aren’t unique in that regard. Employer-based coverage for the working population, which is provided through private insurance companies, has grown just as fast. The problem in a nutshell is the cost of health care, not its funding source.
That’s why it’s important to consider how the two separate sides of our health care system – public plans and private plans – will interact should the Medicare privatization plan that Rep. Paul Ryan, R-Wis., touted on Fox News Sunday become law. The House Budget Committee chairman’s alternative budget would turn Medicare over to private insurers for anyone who retired after 2021. Future retirees would receive a capped payment to buy insurance (he called it “premium support,” not a voucher). Medicaid would be turned into a capped block grant – which translates as a fixed sum awarded to states.
Capping expenditures is central to cost-control in the Ryan plan, which is essentially the same plan that he co-authored with former Congressional Budget Office director Alice Rivlin during the fiscal commission deliberations. The plan limits the annual growth in the amount earmarked for either premium support or block grants to one percentage point more than gross domestic product (call it GDP+1).
That’s about half of the actual health care cost outlays in most years. According to Congressional Budget Office projections released in January, federal spending on Medicare and Medicaid is expected to nearly double to $1.6 trillion by 2021, about a 7 percent annual increase. If the primary goal is holding down taxes and spending, capping that rise at GDP+1 provides the upside. With a wave of the legislative wand, government spending on health care for the old and poor would be reduced to more manageable proportions – between 3.5 and 4.5 percent a year depending on how fast the economy grows. Taxpayers could rejoice.
But just because the government slowed its spending doesn’t mean that old people and the poor wouldn’t have the same health care bills they had before. Health care for these vulnerable populations absent some other force in the marketplace would continue growing at rates significantly faster than the Ryan plan’s GDP+1 formula, just as it has for decades.
Who would pick up the costs that once were picked up by the government? Under the existing system, doctors and hospitals already complain bitterly about the insufficient fees that Medicare pays for the services they provide seniors. Whenever Congress gets close to actually cutting physician pay, which is mandated by prior cost control laws, they immediately restore the cuts out of fear thousands of doctors will carry out their threats to stop seeing Medicare patients.
One option for physicians and hospitals under a capped Medicare premium support system would be to step up what they have always done when faced with inadequate Medicare reimbursement. They could shift even more costs to private, non-Medicare payers, that is, employers and their covered employees. For working stiffs and their bosses, higher taxes would be replaced by higher insurance premiums.
Another option would be for insurers to begin making skimpier plans available to seniors, who would have to make up the additional costs out of their own pockets. Co-pays would rise. Deductibles would rise. Fewer services would be covered.
Isn’t it possible that making seniors have “more skin in the game” through higher out-of-pocket expenses will succeed in cutting out wasteful spending and keep premiums within the capped limits? That’s what a group of conservative think tank experts argued in a letter to Congressional leaders on Friday. Premium support “is a new way of structuring the financing of Medicare benefits that gives beneficiaries more control over their health choices and spending,” they wrote. “This premium support arrangement would reverse the incentives now in Medicare that promote wasteful spending.
What this ignores is an extensive body of research that shows raising out-of-pocket expenses has consistently failed to hold down costs. Moreover, when people do self-ration care based on price, they are just as likely to eliminate vital and cost-effective health and preventive services as they are to jettison waste. Most citizens, especially the frail elderly and the under-educated poor, are ill-prepared to sort out the wheat from chaff in modern high-technology medicine.
There is one way to avoid these negative outcomes. The government could set minimum standards for the insurance plans sold to seniors and the poor and set up exchanges, perhaps in the states, to enforce those standards. It could also guarantee that the premium support was adequate for poorer seniors (about half live solely on Social Security) to purchase those plans.
There’s a precedent for this approach. Republicans call it “Obamacare.” Democrats call it health care reform, which also included an Independent Payment Advisory Board that every year after 2015 is going to recommend to Congress cuts in Medicare anytime expenditures go over GDP+1. Republicans want to repeal this measure, along with the rest of the bill.
Turning Medicare and Medicaid over to the insurance industry selling exchange-regulated policies would require one more law change in order to achieve the savings promised by Ryan-Rivlin. It would require the government directly regulate the prices charged by insurers so they never grew faster than GDP+1. While Democrats were willing to put that on the table for Medicare (subject to a Congressional vote, of course), no one has been willing to suggest price controls on the private sector.
Princeton University health economist Uwe Reinhardt, who sits on the boards of device-maker Boston Scientific and Amerigroup, a managed care provider, argued in his February critique of the Ryan-Rivlin plan that the most likely outcome of turning Medicare into a defined contribution plan from its current defined benefits would be an ever-widening gap between the level of government support and what constitutes good health care in our society. That would lead to “a multi-tiered health system with a highly financially constrained, bare-bones system for tax-financed health insurance, a broad but varied set of tiers for privately insured patients and a boutique tier for Americans able to afford that style of care.”
Ryan suggested his plan would avoid this fate by means testing the premium support handouts. “Wealthy seniors” would get less, while poorer and sicker seniors would get more. Yet he acknowledged that a premium support system would shift more costs onto seniors as a group.
And it was that element that drew immediate fire from his counterpart on the Budget Committee, ranking member Rep. Chris Van Hollen, D-Md., who was more than willing to send a surge of current down the third rail of American politics. The Ryan plan, he said, would “end the current health care guarantees for seniors on Medicare, and deny health care coverage to tens of millions of Americans. That’s not courageous, it’s wrong.”
Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, “The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs ” (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. You can read more pieces by Merrill at GoozNews, where this post first appeared.
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Insurance should be just that. Our premiums should pay for the cost of our medical care and whatever portion is unused in a given year should be banked and available for use in future years. In years when an individual’s healthcare costs exceeds their premium contribution, the insurance company could adjust that individual’s premium (using a formula to cap the percentage of increase while also making the individual accountable for some increased premium for a set time period). We would have to provide some form of subsidy for those unable to pay the premiums, just as we do today. This would encourage us to use our healthcare dollars wisely while allowing us to build a health savings account to help us through years when we have greater healthcare needs. Insurance companies could remain viable as businesses, but not as profit centers or investment vehicles. Although the benefits of this program would not immediately reduce our healthcare costs, it would solve the problem for our children who would have the opportunity to build a healhtcare bank over their lifetime. Those who remained healthy in their youth and young adult lives and who chose to use their healthcare dollars wisely would have their own medicare bank for retirement, reducing their dependence on medicare and medicaid.
A novel idea – we pay our annual premium and bank the unused portion for future needs.
One benefit of getting governemnt out of healthcare and not going with the minimum benefit plan or required base plan is allowing the market to create solutions. All sorts of good and bad ideas come out of the self funded employer market. Good ideas succeed and bad ones die. Same with insurance companies. When you have a government mandated benefit plan and government selected payors there is no innovation or need for improvement, or even baseline decency for that matter. If Washington says you are the only payor for a region who cares if your service sucks you can’t be fired.
A healthy private system could solve many of these problems if allowed to.
Waste and abuse are not at all the whole problem, and not the biggest part either. We have a very large and complex set of problems.
I agree that vouchers for a fixed benefit won’t solve much, and I think they will move too much power into the hands of insurance companies (since the government will only be dealing with them and not with individual providers or their groups).
We need to start looking at this as an ecosystem. You cannot simply redesign it and expect to know the outcomes. I think we need to do some sensible things, restrain our urge to try to fix everything all at once, and see what happens.
Some sensible things: allow prices to fluctuate, and see if wasteful spending drops or increases (I think the waste will drop, but I don’t know if the total spending will rise or fall, since some prices need to rise, such as primary care); increase age of eligibility for Medicare to 75 (incrementally, maybe by 1 year of age per year); institute means-testing, since a wealthy elderly person does not need all of his/her care paid for by the government.
“This premium support arrangement would reverse the incentives now in Medicare that promote wasteful spending.
What this ignores is an extensive body of research that shows raising out-of-pocket expenses has consistently failed to hold down costs.”
Merrill, this is an extremely flawed argument. Your comparing the affect of OOP spending on private insured in a system with a fraction of the fraud and abuse that is present in Medicare to the Medicare system. If Private insurance had a 10% fraud rate and even higher waste rate those would surly drop without any effect on needed care. Just moving from Medicare’s pay and chase to any sensible fraud protection would save 5-10% day one. You don’t have private insureds rushing out to buy scooters they don’t need. Non delivered home health supplies are not a problem in the private market. There is also extensive real world evidence increased OOP does lead to better decision making, look at $4 generic list for example. The shift away from ER to UC when the ER co-pay is increased is another example. Just slapping a higher deductible on a policy doesn’t work but there is plenty of steerage that is successful with increased OOP. Why do you assume carriers would ignore the successful methods of increasing OOP to achieve better results and go with the less successful?
“Rep. Chris Van Hollen, D-Md., who was more than willing to send a surge of current down the third rail of American politics. The Ryan plan, he said, would “end the current health care guarantees for seniors on Medicare, and deny health care coverage to tens of millions of Americans. That’s not courageous, it’s wrong.”
What guarantee? Medicare is bankrupt and 40 trillion in the whole. I am 36 and there is zero probability Medicare will be there for me the way it is today. Just like Social Security is a broken promise and everyone knows it. We can continue lying to future generations and pretend the money is there or we can admit changes need to be made and prevent the problem from getting worse. Just extrapolate the numbers, at current healthcare inflation you cannot tax or borrow enough money to pay current Medicare benefits 25 years from now let alone 50 years.
“His are for a fixed dollar amount, mine are for a fixed benefit amount.”
Margalit then what have you done to control spending? The whole purpose of the plan is to control spending. The problem we have now is waste and abuse and no suggestions to actually fix that.
“Third, roughly 30% of all healthcare costs are paid out of pocket in Switzerland vs. about 12%-13% here.”
This right here is 90% of the problem. As out % OOP has declined cost has taken off. Any suggestion of increasing OOP you are murdering old people. Why are the swiss not killers for allowing their population to suffer under the burden of 30% OOP spending?
I don’t know for certain but I’m pretty sure it’s 8% of pretax income. I know that’s the criteria the U.S. will use to determine who is eligible for a subsidy starting in 2014.
Looks like a lot of money, but 8% isn’t so bad. Is it 8% of income before taxes or 8% of net income?
Margalit –
A little further research on the Swiss health insurance system shows that the insurers are, in fact, not allowed to make profits on the basic plan but can sell supplemental plans for what the market will bear. However, since estimating medical claims costs a year in advance is far from a precise science, it’s not clear if there is a government backstop or some other mechanism that protects the insurers from losses or lets them raise premiums as much as necessary the next year to rebuild their capital reserves to ensure solvency and claims paying ability.
For 2010, average monthly health insurance premiums per person in Switzerland were as follows in Swiss Francs (CHF):
Age 26 and older: 351.05
Age 19-25: 293.85
Age 0-18: 84.03
Deductibles can range from a minimum of 300 CHF to a maximum of 2,500 CHF. Each individual can make that deductible vs. premium tradeoff for themselves. There is also coinsurance of 10% up to 700 CHF (7,000 CHF of health expenses for which 10% coinsurance is charged). People are expected to spend at least 8% of income toward the cost of health insurance before subsidies kick in. Between 30%-40% of the population qualifies for a subsidy. There are no government run public insurance plans, even for the elderly.
“There’s lots of talk about paying for “quality” not “quantity,” but the implementation so far has been frighteningly incompetent. It’s a nice theory, like a wish in a bottle thrown out to sea.”
…. and peace on earth.
I don’t know what paying for quality means, and I think those who say they do, are not being completely honest.
Certainly, there are metrics for measuring processes, but they all assume an ideal, standard patient and disease. I don’t think medicine is like making cars for Toyota, and I don’t think manufacturing theories apply to services provided to living creatures which were apparently created with very loosely defined specifications.
However, certain things can and should be measured, particularly in hospitals, and since most health care money is spent in hospitals, this is where we need to concentrate efforts. I have no idea why everybody is fixating on the nickels and dimes (relatively speaking) going to office physicians.
“There’s lots of talk about paying for “quality” not “quantity,” but the implementation so far has been frighteningly incompetent. ”
__
Extremely difficult to operationalize, is it not, given the relatively loose cause-effect coupling in much of health care. Dr. Urbach is treating Mr. Jones day-to-day (usually via iterative SOAPe episodes), not an aggregate statistical distribution of Joneses.
A vexing problem, to be sure.
“If the government sets the price they will pay, and the scope of benefits that are paid for, don’t you think it will put pressure on providers to make do with whatever cash is available?” How does this square with improving quality? Simply setting prices in our system does not work, as has been proven by our experience with Medicare and Medicaid. There’s lots of talk about paying for “quality” not “quantity,” but the implementation so far has been frighteningly incompetent. It’s a nice theory, like a wish in a bottle thrown out to sea.
Thanks for this. I do understand that the vouchers would flow from government to patient to insurance company, then be exchanged by insurance company for money from the government. What that does is remove the doctor/billing office from direct transaction with the government. That already is the case with HMO style Medicare plans. Those plans only work for physicians in large groups who can share risk. The health plans can take the risk instead of the doctors, but then that returns us to the faceless insurance automaton refusing to cover care. The problem is that a patient with a basic plan is entitled to standard of care from providers of all kinds, regardless of whether that care is reimbursed. That care (taking account of large groups of patients) is always in excess of what a basic plan will pay for. It doesn’t solve anything. It just gives more money and power to middlemen at the insurance company. Government pretends that it can regulate how much out of each dollar insurance companies spend on care, but it doesn’t work. I don’t think vouchers solve anything. If we rebuilt american health care to resemble the Swiss health system, maybe that would work, but I don’t see it happening with our politicians, and just instituting vouchers does not do it.
I agree with your final assessment, but I would add this: nobody understands what they are doing with health care. Nobody is willing to look at what we really need and what it will cost. Nobody can predict accurately what an overhaul will do to patients and the economy. The government has proven itself able to bankrupt anybody and its solutions are potentially disastrous. They don’t just drop the ball, they ignore it and go their merry way fighting over votes and producing soundbites for the ignorant masses.
Barry, as far as I know, and I may be wrong, the Swiss insurers cannot make profit from the standard plan. They can only profit from the extra services the sell, and people buy more insurance enough to keep those insurers happy, I presume.
I don’t have a problem with an anti-trust exemption, and the ACOs are already moving in that direction anyway, as long as the process is heavily regulated by government (State or Federal).
Peter, fixed dollar amount vouchers are a cruel joke. Fixed benefits vouchers, where the dollar amount the government pays insurers fluctuates yearly, are a good step forward to universal care, in my opinion. If the government sets the price they will pay, and the scope of benefits that are paid for, don’t you think it will put pressure on providers to make do with whatever cash is available?
Yes, PCPs are generally underpaid by Medicare, but both specialists and hospitals should be doing rather well with Medicare fees. Perhaps that needs to change to a more equitable system as many are advocating for even now.
Medicaid should just go away, and its beneficiaries should be absorbed by Medicare.
Tell me how fixed vouchers pay for yearly increasing medical costs? Medicare patients are now having trouble finding PCPs at the Medicare rate and I can’t think Medicaid is any better. Hospitals also complain about the Medicare/Medicaid rate now. Tell me what a voucher purchased policy covers with deductibles and co-pays. There’s nothing to stop providers from extra billing though up front fees for these voucher plans which do not address costs but only address government payments. You’ll quickly get even a larger stratification of treatment tiers and inaccessibility for those unable to pay extra. If you think vouchers will solve this then why hasn’t Medicare/Medicaid rates for people on low fixed incomes brought prices down? You’re all delusional!
Margalit –
Regarding the Swiss healthcare system, insurers, just like the non-profit insurers here, are not really non-profit. They’re low profit. They need to make an adequate margin to cover their medical claims costs plus administrative costs plus maintain an adequate capital reserves to ensure that they remain sufficiently solvent to pay claims on a timely basis. What they don’t have are shareholders. As the executives of non-profit hospitals like to say, “No margin, no mission.”
There are at least three important differences between the U.S. and the Swiss healthcare systems. First, insurers in each canton negotiate with providers as a group so they all pay the same rate for a given procedure in a given canton. Overall costs and insurance premiums differ materially across cantons for the same set of benefits. Second, a significant percentage of hospital operating expenses are paid by general tax revenue which reduces the prices hospitals need to charge to cover their costs. For U.S. insurers to do that, they would need an anti-trust exemption. The current exemption only applies to claims data sharing, not price setting or negotiating with providers. Third, roughly 30% of all healthcare costs are paid out of pocket in Switzerland vs. about 12%-13% here. While I said before that the Swiss system is probably the closest cultural fit for the U.S., it’s an extremely expensive country to live in. If the Swiss paid U.S. prices per procedure, they would probably spend as much or more than we do as a percentage of GDP on healthcare.
The voucher is for the insurer. You as a physician would not see any vouchers. You continue to get paid by the insurer at whatever rate you can negotiate. Unlike Medicare, there is no fixed rate. Of course, you can always opt out of contracting with insurers and accept cash only, The patient will then submit your bill to the insurer and get reimbursed at the rate the insurer agrees to pay. I suspect physicians who contract with payers will have more business than cash only physicians, but perhaps cash practices will have larger profit margins.
If you choose to contract with an insurer, you of course cannot balance bill, since you contractually agreed to accept the insurer’s rate. Considering that there is a need to lower health care expenditures, I would assume that the voucher value to the insurer will not be sufficient to maintain ever increasing billing rates by highly paid specialists and hospitals. However, if insurers come to realize that more and better primary care can indeed reduce overall costs, it is possible that your rates will increase. It is also possible that some form of government intervention will occur to prop up primary care.
This is all fictional of course, because nobody really and truly wants to solve health care problems. It’s just a bunch of corrupt and powerful people jockeying for more power. They just say whatever needs to be said to get votes during an election, and they do whatever needs to be done to get money in between elections. Neither physicians, nor patients matter very much.
I am now half way through Mr. Ryan’s (or the Heritage Foundation) proposal and it is sickening in its total lack of integrity, its highly politicized arguments and general assumption that we are all pretty dumb.
So the patient comes in with a voucher, or with a voucher-purchased plan, which says it’s worth the basic preventive package. I pay my rent, electricity, supplies, staff, etc for that visit with the money that that voucher/plan pays. Currently, that basic plan, via Medicare, pays less than overhead. You say it’s a voucher for a benefit. It still has to translate into dollars. I can’t pay my landlord in vouchers. If I can’t pay my bills by taking care of a patient, then I have only two choices: pay those bills with money from somewhere else, or refuse to take care of the patient. It doesn’t matter who is refusing to pay, or what excuse they give, or what law forbids me to bill over a fixed amount. It adds up to the same bad system.
Kim, check out the Swiss system. It works rather well with all the limitations I mentioned.
Margalit — You really don’t want the vouchers to be every voucher covers the full price for any insurer offering the standard plan. It needs to be based on the cost of the lowest cost plan(s), so insureds pay more for more expensive plans. There’s where the competition to hold costs comes in.
I also think it is very naive to say no profit allowed on the guaranteed issue plans — why again would carriers be in this market? Profit motive should, again, drive cost control. The add-ons are not enough profit potential to offset the risk of losses the guaranteed issue plans pose.
As Barry says, though, the devil is in the details — we can’t have very, very small network plans setting the premium bar; there need to be some basic access tests within geographic region.
Dr. Urbach, the vouchers I have in mind, differ significantly than those Mr. Ryan has in mind. His are for a fixed dollar amount, mine are for a fixed benefit amount. So this is not like the school vouchers, Bobby.
Insurers will be mandated to offer this guaranteed benefits package for whatever price they can negotiate with the government. There will be no profit allowed on this guaranteed issue plan. Insurers can compete and profit from add-ons, as much as they like. We can have a national debate on what the actuarial value of the guaranteed package should be, Barry, and I think we will end up with something in the middle.
We can try it on Medicare and if it works well, we can raise taxes and roll it out to all citizens.
Sounds familiar?
Margalit –
I think the notion of a premium support payment (voucher) being sufficient to fully cover the cost of a low cost, reasonably comprehensive plan is reasonable. The devil, of course, is in the details. I would envision the low cost plan looking something like a narrow network HMO product which fully covers cost-effective preventive care with no co-pay. There could also be a narrow network PPO product as well with a fairly high deductible that would also be covered in full. Maybe these would be comparable to the so-called Bronze plans, which will have an actuarial rating of about 60, that are likely to be sold through the exchanges starting in 2014. The Silver plans are rated at 70, Gold at 80 and Platinum at 90. If I recall correctly from reading, standard Medicare is rated between 55 and 60. Beyond that, people are free to buy up with their own (after tax) dollars. Risk adjustment payments could be shifted among insurers by the exchanges based on the average risk score of the insured population that each winds up with.
Remember when “school vouchers” were the GOP touted education reform panacea? $2,500? Yeah, that’d really have done wonders. My son was in a private Catholic high school at the time — a bargain at about $7 grand a year (late 90’s).
Given that new, accredited schools just don’t instantly pop up like mushrooms on every corner, absent tuition regulation of schools accepting voucher money (oh-NO!), free-market supply & demand 101 says you just raise prices and suck in the voucher money. One more variant of corporate welfare.
How are Medicare vouchers gonna be much different?
How is it that vouchers solve the problems in health care, in any way? Aren’t they just another way to cost shift? The voucher is a promise by somebody, in this case the government, to pay the person who receives the voucher from the beneficiary. The government already does that, badly. I don’t see that vouchers would make any salutary difference. Can someone open my eyes?
You want to go the voucher route? So be it. Define an equitable plan, something like the federal employee plan, mandate that 1 voucher is equal 1 plan (maybe risk adjusted) and require that all private insurers offer the standard plan and accept all comers with vouchers into that plan. Anything extra that seniors wish to purchase on the private market is not regulated.
Not quite a completely free market, but all the business goes to private companies.How is that for a start?
Increase eligibility age for Medicare by one year of age per year, up to some number like 75. Allow balance billing. Stop pretending that rationing is evil and not already in existence. Most of all, stop pretending that anyone in the world can predict those unintended consequences of tinkering with health care. Stop pretending that overhauling a system will have predictable outcomes. Use some practical intelligence. Change a little at a time and wait for the consequences to show themselves. Then you’ll have some rational basis for the next change.
Merrill – where is this body of research that shows that increasing out-of-pocket spending hasn’t slowed costs or, if it has, it has come at the cost of vital, cost-effective, and preventive services? There are a number of payor-supported studies with the opposite conclusions; granted, many readers of the blog will immediately dismiss them as payor propaganda, but I think many large employers would disagree.
My main concerns about the proposal are that the market has to be there for these vouchers — and that is what they are — in terms of open enrollment & availability for all types of seniors, and that the level of the vouchers be based on some realistic basis (like lowest cost plan in the Exchange area). Otherwise we will devolve to pre-Medicare days with lots of uncovered seniors.
“Private insurance I guess can be considered a “Ponzi” scheme as it relies on new money (from premium payers) to pay off old investors (patients) in an 80/20 ratio.”
Peter – No it isn’t. Commercial health insurance premiums collected in a particular year are generally sufficient to cover medical claims plus administrative costs incurred in that year, usually with a profit left over. To the extent that medical claims exceed expectations in a given year, there is a pool of capital to cover the overrun. Affordability is a different issue. If premiums need to increase to cover growth in medical claims costs incurred by an insured population, some members of the population may no longer be able to afford the premium.
Medicare is different. Part A is financed by a dedicated payroll tax, currently 1.45% of all wages, paid by the employee and a similar percentage matched by the employer which pays for hospital costs incurred by the over 65 population, along with some disabled people and people receiving dialysis regardless of age. 75% of Parts B and D are covered by general tax revenue. There is no pool of capital to cover cost overruns except special purpose bonds in the Medicare Trust Fund which can only be converted to cash by selling new regular Treasury bonds, notes or bills to public investors both foreign and domestic. That’s closer to a Ponzi scheme. Under your definition, every healthcare system in the world, including those financed wholly by tax revenue, is a Ponzi scheme because costs are rising faster than the growth of GDP, albeit from a lower base than in the U.S.
It theory, I am not opposed to moving to a voucher-based system but Ryan’s plan essentially calls for no sacrifices for Boomers (ages 55 and up) and just largely socks it to everyone else. What I don’t understand is why so much attention is being paid to this now given it is largely the same stuff warm-overed from 6 months ago.
What is more glaring is the overall gaping holes in Ryan’s assumptions in his overall budget forecast (e.g., 2% unemployment, rapid fall to 4% unemployment by 2015, magic reduction in discretionary spending without specifics, assumption that radically reducing/eliminating all kinds of taxes would result in dramtically more revenue, etc) which range from ‘hard-to-believe’ to ‘bat-shit’ crazy. Its in the same utter category of crap that Obama’s budget projections were earlier this year.
Basically both sides want to keep their pet causes without basic tenets of reality – income taxes need to rise, defense spending needs to come down, and we need entitlement reform mainly on healthcare that doesn’t essentially just massively shift risk to individuals.
I have little faith in the American system at this point to reform itself. I fear that it will take a massive economic or other calamity to force the hand of real reform.
Private insurance I guess can be considered a “ponzi” scheme as it relies on new money (from premium payers) to pay off old investors (patients) in an 80/20 ratio.
“A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.”
Sounds like all U.S. health care doesn’t it.
That should read “the alternative to withdrawal from “
The alternative from the govt healthcare ponzi schemes will end up looking a lot like Medicaid For All. And this regime IS French – ala Louis XV, “Apre moi le deluge.””
“You would not know an ounce of whether private sector healthcare would work or not.”
Can you explain then why health costs have not been contained in the 2/3 of workers getting private health insurance through their work? And why those plans are tax free benefits that help workers pay for co-pays and deductibles? Would the private sector offer seniors more for less or the same for less or less for less?
“go back to france. seniors already stumble around with Medicare and the likes”
Guess you’ll have to expand on that statement.
Never been to France, but I hear Paris is beautiful in the spring.
Care to elaborate on the “upsides” of this plan for the relevant populations it affects, not for those already on the up side of things?
She’d get better medical care there at lower cost.
If these changes happen, where seniors have to pay more, it will decrease their life span more because they will skip doses of medicine, not refill prescriptions or worse yet, just not go to the doctor. I know many people who are still working because they can’t afford their medicine. My thought is, what would Peter Orszag (peterorszagonline.com) do? Would he vote for this? How would he change it?
Margalit: go back to france.
seniors already stumble around with Medicare and the likes.
your no more than an ideological acolyte.
Vouchers. Nothing more, nothing less. A bunch of octogenarians, disabled people and ESRD patients fumbling around with government vouchers worth 80 to 85 percent of face value, because shareholders and executives must be paid first, shopping for insurance plans on a market free to rob them of their last dime. Problem solved.
How can you argue with a created false-choice, straw man argument.
Here was the gist of the article: “Single payer will solve many of these problems as government can control many of these payment and health systems (think annual cost increases, insurance, etc). A private system does nothing to solve any potential problems, it would destroy healthcare, endanger seniors with cost burden, and really never have a chance.”
Oh really. how about we try it, and fix it along the way. Because what you are proposing is ludicrous, that somehow government can fix healthcare along the way.
I wish people like you would own up to the fact that you do not really understand private sector well, and that you simply see government as the way to handle big industries, like airlines, healthcare, etc.
You would not know an ounce of whether private sector healthcare would work or not. Your mind simply can not go there mentally to understand the true benefits/risks.
one acronym. NHS. despite what “progressives” like you say, it has been an utter failure.
Single payor system of healthcare is a big a canard as anything outside of carbon tax, which is no more than a middle class tax hike that i bet you adore also.
Idealogy trumps reality (everytime with people like you).
How about you put together a synopsis where private sector works. Where markets force prices, where government adds light regulations to grease the wheels, where companies stop making so much on technologies, where people DO make better decisions.
not possible right. i know, i have heard it many times from people like you.
group thinkers. thats all.It’s not popular to offer private sector solutions for healthcare in your circle. You would be looked at like a crazy, like a heretic.
That is really all this amounts to. One big scheme, like a ponzi scheme, where the so-called “experts” perpetuate all these counter-arguments and ideas to protect their single payor idealogy.
Why dont you write an article about the significant upside Ryan’s plan offers.
Exactly, not in your DNA. your blood is already curdling.
enough said.
Link to CBO analysis here.
http://www.cbo.gov/ftpdocs/121xx/doc12128/04-05-Ryan_Letter.pdf
Of note, by 2030 seniors would be paying 68% of their insurance premium. Since this is a health care blog, I wont even mention that this budget assumes that the category of “other mandatory” and discretionary spending will drop from 12% of GDP to 3 1/2% w/o saying how that would be accomplished.
But, back to health care, Ryan is recommending means testing for Medicare, insurance exchanges, risk adjustment and guaranteed issue. It will be entertaining to watch right wing pundits discuss this.
Steve