theabcsofmedicare

When Will the Left Stop Lying... about "Medicare for All"

When will the left stop lying... about "Medicare for all?"

This far left California Congressperson supposedly¹ said:

“Medicare is far, far more efficient than private insurance companies. Using the tax system to collect money for healthcare delivery is extremely efficient. No profits. No commissions. No advertising.”

Is this Congressperson really so clueless?
Forgetting the fact that even the Obama administration’s leading Medicare bureaucrat stated that Medicare is twice as INeffecient as commercial insurance (all insurance companies are private), is he or she not aware of the huge profits and commissions involved in United States Medicare. Is the Congressperson so out of touch with real Americans that he or she has never seen an ad for Medicare from AARP?  

United States Medicare is run lock, stock and barrel by the insurance industry. That includes all four Public Parts of Medicare (A, B, C and D) and all the numerous private supplementary options that almost everyone not on Part C or Medicaid use because Parts A, B and D of Medicare provide such poor financial protection.

And Medicare is only about 20% funded by payroll taxes. More than half of Medicare beneficiary healthcare spending is funded by the Medicare beneficiary out of pocket (and that’s not counting what he or she paid in payroll taxes for 50 years). Most of that out of pocket spending is to buy supplemental insurance from insurance companies like AARP (understanding that around 85% of the money ends up with doctors and hospitals)

This dominance of United States Medicare was baked into the Original 1965 Medicare law -- Sections 1816 for Part A and 1842 for Part B if you want to read it -- and LBJ could not have passed Original 1965 Medicare without the buy in of the insurers. No civil servants are involved in United States Medicare other than to issue contracts to insurers and to theoretically make sure the insurers (and a group of non-insurance-company sponsors of Part C) follow the contract.

At least the public Part C Medicare health plan program, passed in 1997, took away some of the insurers' power because most Part C plans are run by integrated health delivery systems and non-profit charities, eliminating the middlemen to some extent. But even Part C is dominated in terms of number of subscribers by two for-profit insurers and AARP, which although a non-profit, uses a for-profit insurer. And my integrated health delivery system decided it did not want to be in the insurance business and spun out its claims handling department into a separate insurance company, which at least is a non profit charity.

¹I say supposedly because left wing journalists have a habit of putting words in people's mouths.

When Will The Left Stop Lying... about Tens of Thousands of Deaths Per Year?

When will the left stop lying...

... about lack of health insurance causing "Tens of Thousands of Deaths" among Americans under age 65 per year?

Happily there are relatively few (compared to the U.S. population of over 300,000,000) deaths related to any cause among Americans under age 65 per year¹:

• about 150,000 among those under 45 in 2015 (only 25-45 shown in visual)
• about 500,000 among those between 45-65

Deducting accidents, homicides, and let's call them "lifestyle-choice deaths," the number is well less than 500,000 for everyone under 65. Also happily, as percent of overall population, the number is down dramatically since 1980, when the population was 100,000,000 less (33%) than it was in 2015.

To claim that 10%, 15%, or more of these relatively few but unfortunate early passings have anything to do with insurance is just an unbelievable example of how far the left will go in terms of deception, corruption, deceit and outright ugliness.

¹United States Department of Health and Human Services, 2016 Chartbook

 

 

Leftist Advisory Board Economists Seem to Have Flunked Economics 101

Wow, this Advisory Board article is full of total non sequiturs in addition to the usual liberal nonsense about Medicare. The Advisory Board is a left wing crony capitalism group that supposedly does economics research. If this article is any indication, its economists flunked Economics 101.

The article begins:

“Although Medicare Advantage (MA) was created as a way to reduce federal spending, the federal government generally pays MA insurers more than the plans actually pay for patient care.”

Those two statements are unrelated. The “although” is total nonsense. It

1. could be true that the public Part C Medicare health plan program reduces federal spending and
2. also true that the federal government pays Part C plan sponsors (only a minority of Part C plan sponsors are insurers) more than the sponsors pay providers.

In fact the first statement is undeniably true according to years and years of Annual Medicare Trustee reports (see table directly above--the 2016 numbers are now out and the right hand percentage continues to run under 100%).

And, separately, while there have certainly been some public Part C plan sponsors that paid out more than they took in, such sponsors don’t last long.

There are at least another half dozen outright errors or silly sentences similar to the first in this short article.

Lefty Health Affairs Ties Itself in Knots over Failed Obamacare, Original Medicare

A very revealing article is currently appearing on Health Affairs. This article is a devastating indictment – by three second-string leftists — of both the left’s failing 5-year-old healthcare financing program for the poor and the left’s failing 50-year-old Original Medicare program (which was — at least initially — for seniors). This article also features the most tortured circular lefty logic I have ever seen.

Follow these leftists’ proposal in detail.

• 1. Our healthcare financing program for the poor, particularly for the working poor, is failing. So let’s give the working poor access to our failing healthcare financing program for seniors instead.
• 2. But… Our healthcare financing program for seniors – Original Medicare – actually provides fewer benefits and worse financial protection than our healthcare financing program for the poor.
• 3. So… “(Original) Medicare… plans would have to provide the essential benefits of (our healthcare financing program for the poor) and meet other requirements…, so the benefit packages—perhaps at the gold and silver levels—(of this new proposed Medicare for the poor) would need to be different from the (benefits) Medicare offers to seniors… (today).”
• In other words, we realize that today the left’s Original Medicare program is basically a Tin Plan on the current law’s Bronze-Platinum scale. The left’s Original Medicare is terrible insurance, with lifetime and per-incident limits on benefits, no catastrophic coverage, no out of pocket spend limit, and many other problems (lack of drug coverage, which is mentioned, is the least of the left’s Original Medicare’s problems). Original lefty Medicare is so bad that 98% of the people who use Original Medicare have to buy two, three or more mostly private insurance policies to actually be… you know… insured.
• 4. So… Instead let’s give the poor the Republican’s 20-year-old Medicare program, Medicare Advantage (see Note), and ruin it too. Oh by the way, the current Bronze-Platinum program of healthcare financing program for the poor, which has failed, is pretty much a copy of the Republican’s Medicare program, which is successful because it is designed for seniors.
• 5. So… Return to Point 1.

NOTE: The term Medicare Advantage is a government artifact and most beneficiaries of a public Part C Medicare health plan, of which Medicare Advantage is only one of multiple types, would not see the term Medicare Advantage on a card, promotional document or other policy document they are ever likely to look at. However the words “Medicare Advantage” do appear (or should) in the fine print of the 300-page Evidence of Coverage document, if their Part C plan is a Medicare Advantage plan

New York Times Continues Decades-Long Attack on Medicare Choice for Seniors

On August 7, the New York Times continued its decades-long attack on the idea that seniors should have a choice in the kind of Medicare they use: fee for service or capitated fee. The article was titled deceitfully "Medicare Advantage Spends Less on Care, So Why Is It Costing So Much?" The New York Times was deceitful because the article was based on this report, which basically said the opposite of what the Times reported: The Times deceitfully glommed onto the questionable claim circled in red concerning 30% overhead while making no mention of all the report's meaningful data underlined in blue that came before it. The third paragraph of the Times deceit begins:

"The study released in January, found that the revenue Medicare Advantage plans received in 2010 exceeded the amount they paid out for medical care by a hefty 30 percent. At more than $2,000 per enrollee per year, that probably topped $20 billion dollars, nearly all from federal payments, not enrollee premiums....."

Apparently the author of this blog and the New York Times is assuming you will not follow the link to the report, which actually says on page 1 (splitting up the two different thoughts in the underlined section above):

"… average spending per enrollee-month in TM was…$771 paid... by the Medicare program (per service)… The MA plans in the HCCI data received on average $767 per enrollee-month…”

So the Medicare Trustees (what the blogger calls "federal payments") paid $50 less per year on people on Medicare Advantage than people on traditional Medicare. The report, if you follow the link, also explains that people on traditional Medicare pay over $1200 more per year out of their own pocket (see Note 1) than people on a public Part C health plan, as explained in this further edit of the convoluted academic wording:

"We calculate that MA spending per enrollee-month totaled $642, of which $590 was paid by MA insurers and the rest by enrollees out-of-pocket. In contrast, average spending per enrollee-month in TM was $911, of which $771 was paid directly by the Medicare program to providers."

The report at the link also explains that the claim of a 30% overhead is highly speculative. But naturally that is what this opponent of senior choice glommed onto. The biggest reason that the 30% claim is likely wrong is that it does not account for the benefits in public Part C health plans such as eyeglass discounts or an annual physical exam that are not covered at all by traditional Medicare and that therefore are not tracked in the almost-10-year-old HCCI data concerning Medicare Advantage.

The reason for the Times' deceit is that the Democratic Party viciously attacked the Part C health plan program and the poor people like myself who use these plans (see Note 2) from the formal creation of the program in 1997 (and even before 1997 when what became Part C was in demonstration status) until 2014. The Democratic Party stopped its attacks on we seniors in 2014 given Part C's popularity but the venom the Party spewed for 30 years continues on. And people like the author of this New York Times article and the New York Times in general has apparently not gotten the word that the Party line has changed.

NOTE 1: This $1200 difference only applies on average as if no one bought expensive private Medicare supplemental insurance. In fact, people on traditional Medicare typically buy expensive private AARP-like supplemental insurance which costs over $2000 more per year than Part C plans on average

NOTE 2: Public Part C health plans, of which Medicare Advantage is one type, are not for everyone. The most important factor in Medicare choice is what insurance does your favorite provider accept. Most providers do not accept a public Part C health plan, a program mostly benefiting poor seniors. A secondary concern for rich seniors that live in different parts of the United States at different times during the year is that Part C plans are geographically based (there is an exception to that rule for rich seniors in Minnesota that can afford to live in different parts of the United States at different times during the year.

Three Leftists Sort of Say Public Medicare Advantage More Efficient than Traditional Medicare

Three left-wing entrepreneurs -- who have "invested" in a 2015 start-up that wants to take advantage of the Obama administration's "big data" initiatives -- have found that public Part C Medicare Advantage plans are more "efficient" than traditional Medicare. Whether efficiency is even a good way to measure health insurance is debatable but the lefties conclude (see Note)

"... our results suggest that there are large efficiencies from ensuring that at least some managed care option is available to (Medicare) enrollees (in all counties)."

After reaching that conclusion however they never answer the question in the title of their research (see image): "Is Medicare Advantage More Efficient than Traditional Medicare?" The three leftists are long time critics of what they call -- incorrectly -- private Medicare. So it is interesting that they have reached these conclusions and actually published them. Maybe it's something to do with becoming capitalists.

Still there are only a few reasons to choose a public Part C Medicare health plan (not all public Part C plans use the brand Medicare Advantage and many are not even based on the Medicare Advantage part of the Part C program) and its efficiency is not one of them. The reasons are:

• My preferred/favorite/nearest provider or providers accept a public Part C health plan I can join
• I am not risk averse and I do not want the almost total financial protection of private Medigap insurance (but I understand that Medigap is almost always much more expensive upfront and out of pocket ongoing than a Part C plan)
• I understand all the rules of health maintenance organizations (HMOs) and like networks (usually you have been in one for 30-40 years and have no problems with the HMO approach)

The plurality of people on Medicare get a private group retiree plan from a former employer (but increasingly these group retiree plans are also HMOs or HMO-like). Part C is the second most popular choice. Private Medigap plans are the third most likely choice. About 10% or so of Medicare beneficiaries are on Medicaid and have no need for a private retiree or Medigap plan or public Part C plan.

Note: The quote is from a summary of the entrepreneurs' article published in a free National Bureau of Economic Research newsletter; the actual research is behind a pay wall.

Why Charles Shumer Is Like Abraham in Genesis When It Comes to Medicare

I have been bothered by some statistics in an article by Sam Wood on philly.com concerning how many people did not sign up for Part B when first eligible and therefore pay a penalty on top of their Part B premium once they do sign up. Wood dug up the number from the Congressional Research Service. It was 750,000 in 2015 and this group is paying on average a 29% penalty meaning they on average sign up 2-3 years later than they should have.

That 750,000 equals a little more than 1% of the people on Medicare. So 1% of people in any group do dumb things, you say; end of subject. But the 750,000 actually represents 20%-50% of the people who could potentially be affected by the penalty because most of us have to sign up for Part B in order to get our supplement. Even if we did not know the rule, we would find out about it long before we would have to pay a penalty.

So who falls through that crack since almost everyone on Medicare is effectively forced to get a supplement. The answer -- apparently -- is that most of the 750,000 take the risk of paying a Part B penalty somewhere in the future on purpose:

• Around 1% of all the people on Medicare are also on VA and have no need for B in general.. but they will pay later if they change their mind – About 10,000 of the people in the VA system on Medicare pass on Part B
• Another 1% of the people on Medicare live outside the U.S. and have no need for Part B in general (in fact, all of Medicare itself  is no good to them outside the U.S. period unless they travel back and forth)… but they will pay later if they change their mind and want to leave the Riviera and come home – about 10,000 make this decision
• Around 40% of us on Medicare have private group retiree insurance as a supplement (instead of public Part C or private Medigap) and although most of those in this cohort are required to have Part B by former employers (e.g., the state of Massachusetts), Federal retirees and some others are not. So many in this cohort often intentionally forgo Part B knowing that some day for some reason they may have to pay a penalty; that decision is not accidental, particularly among those in the Federal Employee Health Plan system – about 200,000 intentionally take the risk
• Some people on Medicare do not join B when they should because they are high income (but not working or not working for a company that provides employer insurance) and would need to pay a very large surtax to get Part B. But then as their income comes down as planned by a financial manager (maybe after 3 years), paying the standard Part B premium plus a 30% penalty average for the rest of their lives makes more financial sense than paying the huge standard Part B premium and surtax for three years – maybe 50,000 (these people are typically much older than 65 when first eligible so "rest of their lives" is not an actuarially big number)
• Around 5% of the people on Medicare (but this number is decreasing rapidly as the cohort dies off) never joined Medicare Part B because of the initial rules of their group (typically local governments) but later the  group retirement plan decided to pay the penalty for them because that is a better deal for the group's finances than carrying the retirees with the younger people in the group – also maybe 50,000 or so but could be higher
• Around 10% of us in total (5,500,500) have Medicaid and whether or not we do not have Part B accidentally or intentionally is irrelevant because we do not pay the penalty – maybe there are 200,000 of us in this group
• Some people ARE dumb when it comes to financial management and do not make good decisions  – so maybe of the 750,000 of us paying the Part B penalty, 200,000 of us ARE dumb

That means the percent that accidentally do not sign up for Part B when they should is more like one third of one percent of all the people on Medicare, not 1%.

OK, what does this have to do with Charles Shumer, Abraham, and Genesis? Shumer wants to pass a law that says everyone will get mailed a letter when they are 64 years and 6 months old reminding them to think about this issue even though 99.7% of us already do. Then they will get another letter three months closer to their birthday. This letter is going to get lost in the 2000 other letters we all get as we approach Medicare age.

But it's like when Abraham argued with God about saving Sodom and Gomorrah. Abraham asked God if He (or She) would save the cities if there were just 50 righteous people in them; God said "yes," He (or She) would save the cities for the sake of the 50. What about 40, Abraham dared to say? God replied, OK, even for 40. Abraham kept lowering the bar and in the end God said even if there were only 10 righteous people in Sodom and Gomorrah, He (or She) would save the other umpteen thousands of wicked inhabitants for the sake of the 10 (see Note). 

Shumer's law requiring that all of 100% us be sent a notice is not going to change the fact that 0.3% of us do dumb things. But what the hell (sorry, God).

NOTE: In the end, God decided there was only one righteous person in Sodom and Gomorrah. He (or She) gave that guy a heads up to leave and then wiped the places out.

Which Political Party Created the Medicare "Premium Support" Idea?

"Medicare costs are rising faster than projected revenues. Action to close the emerging deficit is inescapable. We propose converting Medicare from a “service reimbursement” system to a “premium support” system (underline added by blogger). These changes would resemble many that are now reshaping private employer-based insurance. Our reform would encompass not just the “public” Medicare program but also the “real” Medicare, which includes the supplemental plans to which most Medicare beneficiaries have access. Approved plans would have to offer stipulated services. We review numerous technical issues in moving to a new system that cannot be solved quickly and that preclude quick budget savings."

Which blood-sucking insurance companies wrote this article in the lefty Health Affairs magazine that began with the words in the paragraph directly above? Which hateful Republicans want to change "Medicare as we know it" to premium support?

These Democrats did, 20 years ago. Aaron was and is (in his dotage I assume) with the far left wing Brookings lobbying group. Reischauer was with Brookings then, later with the even further left Urban Institute and was most recently President Obama's Democratic-Party public representative to the Medicare Trustees. Both had previously been staffers to Kennedy and like Democratic Congresspeople.

Medicare Part C Spending Per Person Drops to 20th Century Levels

The original 1995 (proposal)-1997  (passage) intent was that public Part C Medicare health plan spending per person would be 5% less than spending on Medicare fee for service (FFS) beneficiaries. That's when Part C was supposed to be just HMOs and that was how HMOs worked in the real world, not controlled by dumb Congresspeople trying to buy votes. And that was the case for Part C of Medicare in its first few years up until around 2005. 

Source: June 2016 Medicare Trustees Report, Tables II.B.1 and IV.C.1 and equivalent tables in previous year reports

Now it's back to the future (see illustration). For the last few years -- since the passage of the Patient Protection and Affordable Care Act (PPACA) -- spending per public Part C Medicare beneficiary has dropped below 100% again, down to 96% in 2015.

In between, nutty Congresspeople added PPOs that brought the percentage up to about 100%, and added special deals for Democratic-leaning unions bringing it up to 103%, and added a crazy FFS plan that got paid like it was an HMO, bringing the difference up to 107% in 2007. All bad ideas. All the Congressional side deal except the PPO idea have been slowly ended (slowly, to be fair to the beneficiaries) or are on the way out and will be ended over the next few years. Now public Part C Medicare health plan program is working as originally intended by the Democrats who thought up the idea.

(Oh, in case you believed President Obama when he said Part C beneficiaries cost 15% more than FFS beneficiaries, he lied to you. In case you believed him when he said Part C was private, he lied to you. In case you believed him when he said Part C was a Republican idea, he lied to you. In case you believed him when he said his mother had been kicked off her health care insurance because she had cancer, he lied to you.)

Looney Left Medicare Lie No. 41: No, You Don't Give Up Medicare If You Choose Medicare Advantage

As we close in on another annual election period for Medicare Parts C and D (begins October 15, 2016), watch out for Looney Left Lie 41 (see Note). It's one of the left's favorite attacks on public Part C health plans (the most popular of which is called Medicare Advantage by the 2003 Medicare Modernization Act) and especially on people who choose Part C. The left claims you leave Medicare if you choose Part C.

That is a lie. 100% -- everyone -- on a public Part C health plan is on Medicare. As the illustration from the Medicare and You booklet shows, Part C simply "combines Parts A and B (and usually Part D)." You are 100% on Medicare exactly as is everyone also on Medicaid and exactly as is everyone also on a private Medigap plan and exactly as is everyone also on private group retiree insurance. In fact you cannot buy either a private Medigap supplement or a public Part C Medicare Advantage health plan unless you first sign up for and keep current both Parts A and B of Medicare. And almost everyone that does not get retiree health insurance from a former employer or union or who is not on Medicaid buys either a public Part C or private Medigap supplement because Parts A and B of Medicare are so bad.

The left hates seniors who choose Part C for being independent and making good choices. I have saved about $25,000 in my first five years on Medicare by choosing public Part C health plan. The left hates such seniors for saving money and not putting all their money into their private insurance plans while suffering with their one-size-fits-all crappy Federal program.

But remember Part C is not for everyone (see other postings on this blog).

NOTE: The Looney Left Lie Numbering system imprecise