Surprisingly, for the third time in recent weeks I find myself agreeing with the Washington Post (WaPo) Wonkblog when it comes to possible Medicare Reform proposals. I guess that’s because WaPo says it’s agreeing with the New York Times' so-called conservative, David Brooks.
But WaPo is only agreeing half heartedly that the 20-year-old bi-partisan Aaaron/Clinton/Dominici/Heritage/Reischauer/Rivlin/Ryan/Wyden premium-support approach to Medicare Reform has merit. The one big problem I have with WaPo’s thought process is..
...in this sentence:
"Medicare’s great advantage is it’s a huge and powerful purchaser. That’s allowed it to negotiate very low rates on health services — an equivalent Medicare plan in the private sector costs about 20 percent more..."
Unfortunately the rest of the WaPo Wonk's logic – which argues for cutting Medicare Parts A, B and C by over $700 billion while simultaneously using competitive bidding -- depends on the above sentence.
What can WaPo possibly be thinking on two fronts?
- 1. On what basis can it think Medicare cost 20% more in the private sector?
- No one in the private sector would ever design healthcare insurance as bad as Medicare but the closest "private" policies to Medicare are the no-premium C plans that rebate Part B premiums. Such plans are effectively providing Medicare Parts A and B (Original Medicare to the bureaucrats, traditional Medicare to the academics, “Medicare as we know it” to the Democrats) but are better than Parts A and B because they
- In other words “private” plans are TODAY delivering Original Medicare for the same price as or less than Medicare Administrative Contractor (MAC)-delivered Original Medicare. (This was verified by the Cutler et al JAMA research published in August 2012, which said private insurers using a poor version of competitive bidding were delivering Original Medicare in almost every county in the country for 15% less than the MACs -- which of coruse are also “private” insurance companies -- delivered it. Who knows how much better insurers would do with real competitive bidding?)
- 2. What negotiated low rates is WaPo thinking of? What negotiation took place when? Is it:
- The dictated Sustainable Growth Rate cut to doctor fees that has been used only once in 15 years?
- The $400 billion cuts to A and B dictated in the Patient Protection and Affordable Care Act (PPACA) in 2010 and that are as likely to be unimplemented or waived as everything else in PPACA has been?
-- Dennis Byron
