Cutting Through The Medicare Charade
In his Wall Street Journal op-ed today, House Budget Committee Chairman Paul Ryan (R-Wis.) said the Republican budget plan is focused on “saving Medicare.”
Of course, in this context, this is intended to strip the word “save” of all meaning. Even the Wall Street Journal yesterday noted that the GOP proposal “would essentially end Medicare,” which happens to be true.
Medicare is very easy to understand — it’s a popular system of socialized, single-payer health care for seniors. Beneficiaries love it, and the system works pretty well. The House Republican scheme for Medicare is a little more complicated, but still pretty straightforward — the GOP intends to privatize it. The resulting system would, ironically, look quite a bit like the Affordable Care Act, with seniors entering exchanges, where they would take a subsidy to purchase private insurance.
So, what’s the problem? Republicans intend to rig the game, scrapping the existing system and ending the guarantee of set benefits, while at the same giving beneficiaries a voucher that wouldn’t keep up with costs.
This isn’t “saving Medicare”; it’s ending Medicare and screwing over seniors.
Josh Marshall had a good piece on this yesterday, calling the plan “Medicare Phase-out legislation.”
The Ryan plan is to get rid of Medicare and in place of it give seniors a voucher to buy health care insurance from private insurers. Now, what if you can’t buy as much as insurance or as much care as you need? Well, start saving now or just too bad.
Now, by any reasonable standard, that’s getting rid of Medicare. Abolishing Medicare. Phasing it out. Whatever you want to call it. Medicare is this single payer program that guarantees seniors health care, as noted above. Ryan’s plan pushes seniors into the private markets and give them a voucher. That’s called getting rid of the program. There’s simply no ifs or caveats about. That’s not cuts or slowing of the growth. That’s abolishing the whole program. Saying anything else is a lie.
Yep.
I’d just add that some folks may have forgotten why Medicare was created in the first place. The nature of the human body is that ailments are more common as we get older, and profit-seeking insurance companies weren’t keen on covering those who cost so much more to cover. On average, folks who’ve lived more than six decades often have pre-existing conditions, and we know all too well what insurers think of those with pre-existing conditions.
Seniors relied on this system for many years, but it didn’t work. We created Medicare because relying on private insurers didn’t work.
And now Republicans want to roll back the clock.
By: Steve Benen, Washington Monthly, Political Animal, April 5, 2011
Cutting Medicaid Means Cutting Care For The Poor, Sick And Elderly
The part of Paul Ryan’s budget that’s going to get the most attention is his proposal to privatize and voucherize Medicare. But the part that worries me the most is his effort to slash Medicaid, with no real theory as to how to make up the cuts.
Ryan’s op-ed introducing his budget lists Medicaid under “welfare reform,” reflecting the widespread belief that Medicaid is a program for the poor. That belief is wrong, or at least incomplete. A full two-thirds of Medicaid’s spending goes to seniors and people with disabilities — even though seniors and the disabled are only a quarter of Medicaid’s members. Sharply cutting Medicaid means sharply cutting their benefits, as that’s where the bulk of Medicaid’s money goes. This is not just about the free health care given to some hypothetical class of undeserving and unemployed Medicaid queens.
But perhaps cutting it wouldn’t be so bad if there were a lot of waste in Medicaid. But there isn’t. Medicaid is cheap. Arguably too cheap. Its reimbursements are so low many doctors won’t accept Medicaid patients. Its costs grew less quickly than those of private insurance over the past decade, and at this point, a Medicaid plan is about 20 percent cheaper than an equivalent private-insurance plan. As it happens, I don’t think Medicaid is a great program, and I’d be perfectly happy to see it moved onto the exchanges once health-care reform is up and running. But the reason that’s unlikely to happen isn’t ideology. It’s money. Giving Medicaid members private insurance would cost many billions of dollars.
That’s why it’s well understood that converting Medicaid into block grants means cutting people off from using it, or limiting what they can use it for. You can see CBO director Doug Elmendorf say exactly the same thing here. There’s just not another way to cut costs in the program. You can, of course, work to cut costs outside of the program, either by helping people avoid becoming disabled or making it cheaper to treat patients once they become disabled or sick, but those sorts of health-system reforms are beyond the ambitions of Ryan’s budget.
To get around some of this, Ryan’s op-ed talks about state flexibility, with the implication being that states have some secret Medicaid policies they’ve been dying to try but that the federal government simply hasn’t let them attempt. But the truth is there’s been a tremendous amount of experimentation in Medicaid over recent decades. Indiana converted its Medicaid program into health savings accounts. Tennessee based its program around managed care. Massachusetts folded its Medicaid money into Mitt Romney’s health-care reforms. Oregon tried to rank treatments by value. Some of these reforms have worked well and some haven’t worked at all, but none have solved the basic problem that covering the sick and disabled costs money, and you can’t get around that by trying to redesign their insurance packages. For that reason, block-granting Medicaid ultimately means cutting health-care coverage to the poor, the elderly and the disabled, even as it doesn’t actually address the factors driving costs throughout the health-care system.
By: Ezra Klein, The Washington Post, April 5, 2011
When Lies Don’t Work, Try “Bait And Switch”: What Paul Ryan’s Budget Actually Does
Paul Ryan’s plan for Medicare and Paul Ryan’s plan for Medicaid rely on the same bait-and-switch: They use a reform to disguise a cut.
In Medicare’s case, the reform is privatization. The current Medicare program would be dissolved and the next generation of seniors would choose from Medicare-certified private plans on an exchange. But that wouldn’t save money. In fact, it would cost money. As the Congressional Budget Office has said (pdf), since Medicare is cheaper than private insurance, beneficiaries will see “higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.”
In Medicaid’s case, the reform is block-granting. Right now, the federal government shares Medicaid costs with the states. That means their payments increase or decrease with Medicaid’s actual rate of spending. Under a block grant system, that’d stop. They’d simply give states a lump sum at the beginning of the year and that’d have to suffice. And if a recession hits and more people need Medicaid or a nasty flu descends and lots of disabled beneficiaries end up in the hospital with pneumonia? Too bad.
In both cases, what saves money is not the reform. It’s the cut. For Medicare, the cut is that the government wouldn’t cover the full cost of the private Medicare plans, and the portion they would cover is set to shrink as time goes on. In Medicaid, the block grants are set to increase more slowly than health-care costs, which is to say, the federal government will shoulder a smaller share of the costs than it currently does. The question for both plans is the same: What happens to beneficiaries?
Remember how the Affordable Care Act was really, really, really long? There was a reason for that. It was full of delivery-system reforms meant to make the health-care system cheaper and more efficient — things like bundling payments for illnesses and reducing reimbursements to hospitals with high rates of infection and creating a center tasked with seeding cost-control experiments throughout Medicare and encouraging the formation of Accountable Care Organizations. The hope is that those reforms will cut costs, which will make the rest of the bill’s cuts possible (more on that here). Republicans, notably, have been skeptical that these reforms will work, and have argued that the cuts won’t stick because beneficiaries will revolt.
To my knowledge, Ryan’s budget doesn’t attempt to reform the medical-care sector. It just has cuts. The hope is that those cuts will force consumers to be smarter shoppers and doctors to be more economical and states to be more innovative. But all that’s been tried, and it hasn’t been enough. That’s why the Affordable Care Act had to go so much further, digging deep into the delivery system, and why Republicans had at least a plausible case that some of its cuts wouldn’t stick. But now the GOP needs to apply the same skepticism to their own programs: Cuts aren’t enough, and if they somehow manage to distract people from the cuts by repeating the words “block grants” and “flexibility” and “premium support” over and over again, they’ll simply end up seeing their cuts ignored when it becomes clear that they’ll mean leaving the old and the poor without health care. What Ryan has here isn’t so much a plan to control spending as a plan to cut spending, whatever the consequences.
By: Ezra Klein, The Washington Post, April 4, 2011
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