The Incidental Economist is a respected left-wing blog that covers all kinds of health care and health care insurance issues with a few non-health-care-related progressive diversions thrown in. One of its participants, Dr. Aaron Caroll, also writes occasionally on CNN's web site. In an August 14, 2012 CNN post -- allegedly comparing and contrasting the Medicare status quo vs. RyanCare -- Dr. Carroll introduces Medicare near the beginning of the article by stating:
"That means the federal government decides each year what Medicare will cover. No matter what that costs, the government pays for most of it; individuals are responsible for the rest."
Carroll then never explains
- how relatively few healthcare services the Federal government "decides each year" to cover under Medicare and
- how little "most of it" is (and how much "the rest" of it is) in terms of actual costs to senior citizens in the United States versus what seniors pay.
He trivializes the over $8,000 for which individuals are responsible yearly on the average under Medicare.
Based on much reading, I think Carroll wins the award for the most intellectually-stretched-thin sentence ever written anywhere in the Medicare/RyanCare debate. (I need to find a better way to express something being stretched thin intellectually; I don't want to say it's intellectually dishonest but it's close.)
Doctor Carroll spends two sentences out of maybe over a thousand words blowing by the two central issues in the debate so he can rush over to the "Ryan sucks" stuff liberals love as fast as possible. I'll write about that in another post but as for describing the Medicare status quo and its current problems, Dr. Carroll fails to note that there are multiple Parts of Medicare. Most harmful to understanding Medicare, he fails to mention very significant information about the Parts -- A and B -- that matter to a comparison of the Medicare status quo with RyanCare. That's true no matter which flavor of RyanCare Dr. Carroll talks about later in his article (and to be fair to Dr. Carroll, Ryan has at least three versions floating around and Ryan has never been clear about which version he really wants us seniors to live and die under).
Voters need to understand (and Dr. Carroll never explains because it destroys his meme) that Medicare Parts A and B are terrible insurance products. Medicare Parts A and B are often called Original or Traditional Medicare or "Medicare as we know it." Part A is loosely thought of as hospital insurance and is "free" to anyone that paid enough in Medicare payroll taxes while working. Usually along with B, thought of loosely as doctor's insurance, and for which there is a $100 a month premium for most middle-income American seniors, these Parts of Medicare are almost always required as a pre-condition for a senior to then purchase meaningful private insurance from a former employer or union or on his or her own.
Parts A and B are like the ante in the poker game of senior health care insurance. But Parts A and B are so bad that the Centers for Medicare and Medicaid Services, the bureaucracy in charge of Medicare, strongly urges the purchase of private insurance in its annual mailings to seniors and has recruited, trained and certified (and annually re-certifies) over 25,000 volunteers to work in senior centers and like sites to help seniors with getting better coverage (as well as on other related issues such as billing, abuse, understanding choices, getting public assistance to pay fo rthe better coverage, etc.).
As a result:
- Over 80% of Medicare beneficiaries purchase private insurance on top of A and B.
- Another 14% are on Medicaid (there is a small overlap between these two groups).
- Only about 8% are on either or both Parts A and B only.
- Some of these are on VA (like almost everyone else, these vets get Part A "free" and without even signing up but they don't need need B or any other kind of private insurance IF willing to live with certain VA restrictions).
- Others in this small group are apparently very rich and don't care (there is some question where Mitt Romney stands among this group; since he's from Massachusetts, he has to have insurance).
- And some percentage have clearly fallen through the dragnet put out by senior centers that I mentioned above.
How come so few people depend on traditional Medicare?
Just as Dr. Carroll never explains the above facts he does not mention that the Federal government has decided that Medicare Parts A and B will not cover catastrophic medical expenses, the reason for which most people get insurance. President Obama's Patient Protection and Affordable Care Act (PPACA) of 2010 as amended highlights its outlawing of lifetime limits in health care insurance for non seniors. But the Federal government still allows lifetime limits in Medicare.
The Federal government has also decided Medicare will not cover annual physicals in Parts A and B, the key to the much promoted PPACA idea that an ounce of prevention is better than a pound of cure. The Federal government has also decided not to cover dental work, vision and hearing issues, or prescription medicines in "Medicare as we know it." Medicare also is of no use outside the United States, something you might think trivial if you live in Indiana but it is not a trivial issue if you live or are visiting in Niagara Falls, NY, Eastport, ME, Nogales, AZ, across from Vancouver in Washington State, etc.
But that's only the first part of the detail that Carroll neglects to mention in his brief dismissive -- possibly intentionally misleading -- sentence that I noted above ("That means the federal government decides each year what Medicare will cover. No matter what that costs, the government pays for most of it; individuals are responsible for the rest"). He also doesn't tell you that -- under traditional Medicare -- seniors pay up to $6000 a year in hospital costs if admitted. They pay 20% of hospital costs if only observed (possibly thousands of dollars more than if admitted) and then cannot go directly to a skilled nursing facility at Medicare's expense. They pay 20% of almost every other charge for interventional or preventive procedure provided outpatient at a hospital or in a doctor's office (remember: an annual physical is not covered at all).
But to Dr. Carroll, all of this important detail about the Medicare status quo, vital information need to compare the status quo with RyanCare or any other Medicare reform proposal, was worth 30 words out of more than a thousand. Readers should note that as a professor of pediatrics Carroll likely treats very few Medicare patients. Not that many doctors of any type know much about health care insurance but being a pediatrician is pretty much the worst place in Medicine to learn about Medicare.
-- Dennis Byron
UPDATE: About 12 hours after posting I lowered my estimate of how much seniors pay on average out of pocket (OOP) each year (versus how much Medicare pays). The estimate appears in a sentence after the first two bullets and the sentence is not really an integral part of my criticism of Dr. Carroll's CNN post, other than to put some meat on my statement that Medicare doesn't pay very much of a senior's health care costs. My original post said Medicare beneficiaries pay $10,000 a year OOP on average but -- to err on the side of conservatism (naturally) -- I lowered my estimate to $8,400 after re-reading Sections 2 and 5 of the June 2012 MedPAC Data Book. There is no question that the percentage is higher than 50%; the only questions are how much higher than 50% (I think it's about 66% and used that number in my first calculation but I used 60% in my new calculation) and what the average beneficiary spent in total in 2012 counting both what was paid by Medicare and what the beneficiary paid OOP. It's hard to answer the latter questions for 2012 because all the June 2012 Data Book data is from either 2008 or 2009. But I estimated $14,000 in my new calculation rather than the $15,000 I used in my first calculation versus $13,751 in 2009 (everyone says healthcare spending has slowed down). Furthermore, the $13,751 number is for non-institutionalized FFS Medicare beneficiaries and the total number for all beneficiaries is not available for 2009 but was around $11,000 in 2008. Anyway the point is that when Dr. Carrol says "Whatever it costs, Medicare pays for most of it," he's wrong. It doesn't.