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Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?

During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.

According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.

While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”

In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.

Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.

This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.

Using this standard alone, Rep. Ryan would have a point.

Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.

However, there is a more important distinction between premium support plans and vouchers.

In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.

Not so with RyanCare.

Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.

This, by anyone’s definition, is a voucher program.

In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.

While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.

According to Aaron-

If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.

Via Washington Post

Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.

We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.

However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.

It is not the President who is demagoguing on this one – it is Paul Ryan.

 

By: Rick Ungar, The Policy Page, Forbes, June 5, 2011

June 6, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Consumers, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Ideology, Lawmakers, Medicare, Politics, President Obama, Public Health, Rep Paul Ryan, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Wealthy | , , , , , , , , , , , , , | Leave a comment

GOP And Media Alert: Vouchercare Is Not Medicare

What’s in a name? A lot, the National Republican Congressional Committee obviously believes. Last week, the committee sent a letter demanding that a TV station stop running an ad declaring that the House Republican budget plan would “end Medicare.” This, the letter insisted, was a false claim: the plan would simply install a “new, sustainable version of Medicare.”

But Comcast, the station’s owner, rejected the demand — and rightly so. For Republicans are indeed seeking to dismantle Medicare as we know it, replacing it with a much worse program.

I’m seeing many attempts to shout down anyone making this obvious point, and not just from Republican politicians. For some reason, many commentators seem to believe that accurately describing what the G.O.P. is actually proposing amounts to demagoguery. But there’s nothing demagogic about telling the truth.

Start with the claim that the G.O.P. plan simply reforms Medicare rather than ending it. I’ll just quote the blogger Duncan Black, who summarizes this as saying that “when we replace the Marines with a pizza, we’ll call the pizza the Marines.” The point is that you can name the new program Medicare, but it’s an entirely different program — call it Vouchercare — that would offer nothing like the coverage that the elderly now receive. (Republicans get huffy when you call their plan a voucher scheme, but that’s exactly what it is.)

Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.

And most seniors wouldn’t be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved. Based on the budget office estimates, the typical senior would end up paying around $6,000 more out of pocket in the plan’s first year of operation.

By the way, defenders of the G.O.P. plan often assert that it resembles other, less unpopular programs. For a while they claimed, falsely, that Vouchercare would be just like the coverage federal employees get. More recently, I’ve been seeing claims that Vouchercare would be just like the system created for Americans under 65 by last year’s health care reform — a fairly remarkable defense from a party that has denounced that reform as evil incarnate.

So let me make two points. First, Obamacare was very much a second-best plan, conditioned by perceived political realities. Most of the health reformers I know would have greatly preferred simply expanding Medicare to cover all Americans. Second, the Affordable Care Act is all about making health care, well, affordable, offering subsidies whose size is determined by the need to limit the share of their income that families spend on medical costs. Vouchercare, by contrast, would simply hand out vouchers of a fixed size, regardless of the actual cost of insurance. And these vouchers would be grossly inadequate.

But what about the claim that none of this matters, because Medicare as we know it is unsustainable? Nonsense.

Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on. And a number of reforms of that kind are, in fact, included in the Affordable Care Act. But with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.

Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their G.D.P. on health care. Since then, as United States health spending has soared to 16 percent of G.D.P., Canadian spending has risen much more modestly, to only 10.5 percent of G.D.P. And while Canadian health care isn’t perfect, it’s not bad.

Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.

So in voting for the House budget plan, Republicans voted to end Medicare. Saying that isn’t demagoguery, it’s just pointing out the truth.

By: Paul Krugman, Op-Ed Columnist, The New York Times, June 5, 2011

June 6, 2011 Posted by | Affordable Care Act, Budget, Conservatives, Consumers, Elections, GOP, Government, Health Care Costs, Health Reform, Ideologues, Ideology, Journalists, Lawmakers, Media, Medicare, Politics, Pundits, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Voters | , , , , , , , , , , , , , , , , , | Leave a comment

Health Reform in Massachusetts: Self-Serving For Mitt But Also True

Mitt Romney’s defense of the Massachusetts health care reforms was politically self-serving. It was also true.

Despite all of the bashing by conservative commentators and politicians — and the predictions of doom for national health care reform — the program he signed into law as governor has been a success. The real lesson from Massachusetts is that health care reform can work, and the national law should work as well or even better.

Like the federal reform law, Massachusetts’s plan required people to buy insurance and employers to offer it or pay a fee. It expanded Medicaid for the poor and set up insurance exchanges where people could buy individual policies, with subsidies for those with modest incomes.

Since reform was enacted, the state has achieved its goal of providing near-universal coverage: 98 percent of all residents were insured last year. That has come with minimal fiscal strain. The Massachusetts Taxpayers Foundation, a nonpartisan fiscal monitoring group, estimated that the reforms cost the state $350 million in fiscal year 2010, a little more than 1 percent of the state budget.

Other significant accomplishments:

The percentage of employers offering insurance has increased, probably because more workers are demanding coverage and businesses are required to offer it.

The state has used managed-care plans to hold down the costs of subsidies: per capita payments for low-income enrollees rose an average of 5 percent a year over the first four years, well below recent 7 percent annual increases in per capita health care spending in Massachusetts. The payments are unlikely to rise at all in the current year, in large part because of a competitive bidding process and pressure from the officials supervising it.

The average premiums paid by individuals who purchase unsubsidized insurance have dropped substantially, 20 percent to 40 percent by some estimates, mostly because reform has brought in younger and healthier people to offset the cost of covering the older and sicker.

Residents of Massachusetts have clearly chosen to tune out the national chatter and look at their own experience. Most polls show that the state reforms are strongly supported by the public, business leaders and doctors, often by 60 percent or more.

There are still real problems that need to be solved. Small businesses are complaining that their premiums are rising faster than before, although how much of that is because of the reform law is not clear.

Insuring more people was expected to reduce the use of emergency rooms for routine care but has not done so to any significant degree. There is no evidence to support critics’ claims that the addition of 400,000 people to the insurance rolls is the cause of long waits to see a doctor.

What reform has not done is slow the rise in health care costs. Massachusetts put off addressing that until it had achieved universal coverage. No one should minimize the challenge, but serious efforts are now being weighed.

Gov. Deval Patrick has submitted a bill to the Legislature that would enhance the state’s powers to reject premium increases, allow the state to limit what hospitals and other providers can be paid by insurers, and promote alternatives to costly fee-for-service medicine. The governor’s goal is to make efficient integrated care organizations the predominant health care provider by 2015.

The national reform law has provisions designed to reduce spending in Medicare and Medicaid and, through force of example, the rest of the health care system. Those efforts will barely get started by the time Massachusetts hopes to have transformed its entire system. Washington and other states will need to keep a close watch.

By: Editorial, The New York Times, May 20, 2011

May 22, 2011 Posted by | Affordable Care Act, Conservatives, Consumers, GOP, Governors, Health Care, Health Care Costs, Health Reform, Individual Mandate, Medicaid, Medicare, Mitt Romney, Politics, Public, Republicans, State Legislatures, States, Under Insured, Uninsured | , , , , | Leave a comment

The Truth About Waivers: Protecting Coverage For Millions Of Americans

Today, you might have seen news stories about waivers from certain provisions of the Affordable Care Act. There has been no shortage of confusion and deliberate obfuscation on this issue and we want to ensure you have the facts.

Under the Affordable Care Act, we have implemented new rules that phase out, by 2014, health insurance companies’ ability to slap restrictive annual dollar limits on the amount they will pay for your care.  But between now and 2014, we also want to make sure workers are able to maintain their existing insurance, because on their own they would likely be shut out of the individual market or face unaffordable options. To do that, the Affordable Care Act allows the Department of Health and Human Services to issue temporary waivers from the annual limit provision of the law if it would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage. So far, we have granted 1,372 of these waivers to employers, health plans, and others in all 50 states, covering less than 2 percent of the insurance market and protecting coverage for more than 3.1 million Americans. We have been completely transparent about this process, announcing the waiver process in a regulation last summer, publishing clear guidance on the application process on our website, and posting a list of waivers we have granted on our website.

These temporary waivers will not be available beginning in 2014 when annual limits are banned and all Americans will have affordable coverage options. And millions of Americans – including many small business owners – will be able to shop for affordable coverage in new competitive marketplaces.

Some have raised questions about waivers that were recently granted to companies in California. So there’s no confusion, here are the facts:

  • A company called Flex Plan Services is a third-party administrator that provides benefit administration services for employers in a number of states, including: California, Washington, Alaska, and Georgia. One type of plan they administer is known as a health reimbursement arrangements (HRA or employer contributions to a tax free account).  Many of the company’s clients are hotels, restaurants and home health agencies, all of whom employ low-wage workers.
  • On March 23, Flex Plan Services submitted 92 waiver requests on behalf of 45 employer clients. On April 4, 2011, HHS approved the request.
  • HHS applied the same standard to the application from Flex Plan Services that it uses when reviewing any application for a temporary waiver. Waivers are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage.
  • In addition, enrollees must be informed that their plan offers coverage with a restricted annual limit.
  • No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy.

The Affordable Care Act puts an end to many of the worst insurance company practices including refusing to sell a policy to a family because someone had cancer or a child has asthma; cancelling coverage when a patient files claims because of an unintentional mistake in their paperwork; and slapping annual or lifetime limits on how much care you can receive. When these rules are fully in place in 2014, our country will be much better off and the cost of coverage will be within reach for the millions of Americans who now live day to day without coverage, worrying about an injury or an illness that could plunge them into bankruptcy. To get from today’s broken system to tomorrow’s patient-centered system takes time and patience through a reasonable transition period. But, together, we will get there.

By: Richard Sorian, Asst. Sec for Public Affairs, HHS, The White House Blog, May 17, 2011

May 19, 2011 Posted by | Affordable Care Act, Businesses, Consumers, Government, Health Care, Health Reform, Middle Class, Politics, Public, Public Health, Small Businesses, States, Under Insured, Uninsured | , , , , , , , , , | Leave a comment

Insurance Companies: Guarding Health Is Not Their Business, But It Is Ours

If for one moment anyone has the notion that for-profit health insurance companies are in the business of guarding the health (or wealth) of policyholders, that notion ought to be quickly dismissed in favor of the truth.  For-profit health insurance giants guard profits.

I arrived outside the WellPoint annual shareholders meeting in a hotel in Indianapolis yesterday to be greeted by more guards (and some armed) than I have seen surrounding President Obama at times.  Apparently just the prospect of having some of the legal shareholders question the business practices and ethics of the WellPoint board and CEO Angela Braly was very scary for the company and its elite leaders.

Some of the shareholders have in recent years put forward a resolution supporting WellPoint’s return to its non-profit roots.  After last year’s meeting, the resolution earned 9.6 percent or 30,000,000 shareholder votes.  The current leadership doesn’t like that nor do they like the efforts of the shareholders who keep challenging them.

One shareholder asked Ms. Braly  at yesterday’s tightly controlled and guarded meeting, as a sort of speakers’ “shot clock” counted down her speaking time, “Tell me, Ms. Braly, could you please explain what you do that warrants a salary ($13.5 million annually) that is more than 375 public school teachers in Indiana earn?”  Braly’s answer was a classic.  No shot-clock running for the CEO as she explained that the board sets her compensation and it has to be competitive with the other comparable giants in the insurance industry.  It is a breathtaking demonstration of greed and hubris.

I wondered how we have allowed this country to amble onward to the point where 1,275 Americans who carry health insurance go bankrupt every single day (if the courts stayed open seven days a week) while an insurance company CEO like Angela Braly pockets $140,000 for her day’s salary.  Every day.

That’s quite a lot of money that doesn’t go to healthcare.  That’s quite a lot of money for one person to earn in one day.  That may be why such scary guards are needed outside WellPoint shareholder meetings – they wouldn’t want CEO Braly to have to mix it up with any of the policyholders or others who might question too directly what value the for-profit health insurance industry adds to the U.S. healthcare system.  I also wondered how much money those guards cost.  And the shot clocks to keep pesky questions to a minimum?  And how about the pro-Angela and pro-profit softball questions planted in the room?

WellPoint, like the other major insurance giants, can claim the best profits ever this year.  Times are good at the top.  Things are not so good for millions of Americans who want for decent healthcare within a system that provides a progressively financed, single standard of high quality care.  Medicare for all would be nice.  The American Health Security Act of 2011, S915/HR1200 as offered by Sen. Bernie Sanders, I-VT, and Rep. Jim McDermott, D-WA, provides a model for moving forward.  Public financing (yes, a single payer system) coupled with public and private delivery (not a single provider).  No insurance giants paying huge board compensations and CEO salaries.  No armed guards protecting the profit.

Outside the City Market in Indianapolis, in the rain and with no need for guards, the advocates of healthcare sanity gathered – and I was thrilled to be among the Hoosiers for a Commonsense Health Plan.  We affirmed our commitment to the work ahead and to one another.  We sang.  We are shareholders in a society that values more than profit – we value behaving justly and humanely, and we’d like a healthcare system that reflects that.

Forgive my repetition of the theme, but health insurance is not healthcare.  Health insurance is a financial product.  Health insurance is a financial product sold to protect health and wealth which may well do neither. Health insurance is a defective financial product for millions of people who made what we felt were responsible decisions about protecting ourselves and our families from financial or health disaster with health insurance products that have loopholes and flaws big enough to leave thousands dead every year and hundreds of thousands bankrupt.

I will never have the salary or earnings of insurance CEOs like WellPoint’s Angela Braly.  That’s OK by me because I’ll also, I hope, never need guards to keep those I have harmed and those I would harm from questioning me about why.  But, my life and the lives of my loved ones, my neighbors and my friends are surely as valuable in terms of access to healthcare in America in 2011.  The day will come.

By: Donna Smith, CommonDreams.org, May 18, 2011

May 18, 2011 Posted by | Affordable Care Act, Consumers, Health Care, Health Reform, Ideology, Insurance Companies, Politics, Public Health, Republicans, Single Payer, Under Insured, Uninsured, Wealthy | , , , , , , , , , | Leave a comment

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