A very misleading Harvard University research paper about the Wyden-Ryan Medicare reform proposal -- or at least the authors' false idea of what Wyden-Ryan says -- appeared in the Journal of the American Medical Association (JAMA) last week. From the get-go, you know the Harvards are not interested in intellectual honesty because they reverse the proponents' names -- calling the reform proposal Ryan-Wyden -- instead of Wyden-Ryan as Senator Wyden and Congressman Ryan named it. The JAMA article is gated. The Incidental Economist (TIE) offers sort of an abstract here.
The major misleading Harvard "finding" that bloggers such as TIE (and Think Progress, etc., etc.) are emphasizing is that Medicare Part A/B1 beneficiaries would have to pay "$64 additional a month" for Parts A/B under Wyden-Ryan as compared to current law. I don't believe any of the Harvard numbers -- including the claimed $64 increase for Gramma -- are meaningful honest research2.
In addition it looks like the $64 a month "scare the hell out of Gramma" claim is incorrect. The Harvard research's supposed 2009 numbers and 2009 actuals follow:
If the Harvard numbers were actionable research (and I emphasize that they are not), Gramma would have to pay $32 less a month under Wyden-Ryan not "$64 additional" as the Harvards claim. That is, Gramma would pay only $64.53 in theory instead of the $96.40 monthly premium she actually paid for Parts A and B in 2009 (see chart).
But that's the least of this research's dishonesty. The Harvard research in JAMA is totally focused on Medicare Parts A/B and Medicare Part C3. Even though Part C goes away if Wyden-Ryan or something like it is passed, the academics spend the whole article (and Ben and Jerry's or some other lefty sucker's grant money) comparing the two plans' three-year-old prices. That’s the extent of the deep Harvard thinking in this poorly veiled piece of Obama re-election propaganda.
Oh by the way, Medicare Parts A/B with their lack of catastrophic coverage and high co-pays also go away under Wyden-Ryan, replaced by a new, better Wyden-Ryan form of Medicare. But there's not a hint of that very important part of Wyden-Ryan in this purported deep thinking analysis from the Harvards. Similar deceptions go on line after line. It is incomprehensible that such propaganda would be published by a respected journal.
And that's not all. The real issue and most important analytical failure in the Harvard research is what is not researched. The Harvards did not consider in their analysis the non-Part-C-like fee for service (FFS) policies that would presumably also compete on the new Wyden-Ryan exchange4, policies mimicking in some way the cocktail of features that the overwhelming majority of seniors get today from the current A/B/Medigap-A-to-N/standalone-D menu or the even more generous policies that employers offer/would offer their retirees. A/B/Medigap-A-to-N/standalone-D policies (aggregating all their variations) are more than twice as popular as Medicare-Part-C options today and yet don't merit a mention by the Harvards. Such A/B/Medigap-A-to-N/standalone-D plans will likely become even more popular by 2022, when Wyden-Ryan goes into effect, because Wyden-Ryan does not give any plans special rebates as Part C receives today and through 2018 under PPACA.
Oh by the way, the Harvards didn't tell you that Wyden-Ryan doesn't start until 2022 either. What intellectually corrupt research.
-- Dennis Byron
1 My comments are based on the assumption that by the term "traditional Medicare" the men of Harvard meant Medicare Parts A and B. Like most Democratic politicans they use the term "traditional Medicare" when they mean the terrible insurance known as Parts A and B, always evoking Truman and Johnson (neither of whom ever used Medicare of course) passing Medicare cards back and forth. Most Medicare beneficiaries on the other hand talk about Medicare as a combination of their A and B (the ante to get into the game because that's the law) plus their private retiree or Medigap insurance and/or their government Part C or VA or Medicaid insurance.
2 I don't believe the Harvard analysis' numbers at all because there's no way that terrible insurance such as old pre-Wyden-Ryan Medicare Parts A/B can cost more than the insurance it would theoretically be competing against. (But -- if so -- well that's the whole idea. "Traditional Medicare" gets better or it goes away.) The problem is that in their rush to help Obama's election campaign the Harvards used old data (when newer differently slanted data is available) and didn't factor in that the mechanics of the current Medicare Part C benchmark/bid/rebate process would no longer apply. So the Harvards are comparing a Part C bid developed in mid 2008 against an artificially derived benchmark written in late 2007 and comparing them to actual numbers not known until 2011. The Wyden-Ryan proposal simply does not work that way.
3 Medicare Part C is the very popular program the Harvards hate because George Bush revamped it a few years ago and it has more than doubled in popularity among us seniors since that revision. That probably -- all by itself -- is why the Democrats want to crap all over Gramma. Maybe I'm wrong. Maybe they aren't doing it to support Obama.
4 It is unclear from the Wyden-Ryan white paper whether Wyden-Ryan would eliminate separate supplements in lieu of single policies such as I suppose above in this post or whether Wyden-Ryan would still make seniors roll their own supplemental insurance on top of the “New Wyden Medicare Parts A/B.” But even if a senior still has to buy his or her supplemental coverage a la carte, it is a political certainly that that type of coverage will still be available. On the other hand Wyden-Ryan is explicit that Medicare Part C and its benchmark/bid/rebate mechanics would be eliminated. That is, the whole data structure underlying the Harvard analysis is meaningless.