“Privatization Of Medicare”: Jeb Bush Now Says He Wouldn’t ‘Phase Out’ Medicare. What He Would Do Is Just As Wrong
It had to happen sooner or later: a Republican presidential candidate says something suggesting he’d destroy Medicare, the Democrats jump all over him, and he backtracks, saying that’s not what he meant and in fact he only wants to strengthen it. This time it’s Jeb Bush, who said the other day that though we can keep Medicare around for the people who are currently on it, “we need to figure out a way to phase out this program for others and move to a new system that allows them to have something – because they’re not going to have anything.”
This is an old argument from Republicans, one they also use to justify attacks on Social Security: the program is doomed anyway, so we should go ahead and privatize it. The argument is completely wrong with regard to Social Security, and the truth about Medicare is that the program’s future is looking brighter and brighter — in no small part because of the Affordable Care Act. The argument Bush is making is ten years out of date.
Bush did try to walk back his statement a bit, saying the “phase out” part was taken out of context and he’s only talking about how we “reform our entitlement system.” Here’s his follow-up, which doesn’t change the essence of what he was arguing:
“It’s an actuarially unsound health care system,” said Bush, who said something must be done before the system burdens future generations with $50 billion of debt. “Social Security is an underfunded retirement system; people have put money into it, for sure.
“The people that are receiving these benefits, I don’t think that we should touch that; but your children and grandchildren are not going to get the benefit of this that they believe they’re going to get, or that you think they’re going to get, because the amount of money put in compared to the amount of money the system costs is wrong.”
Bush hasn’t yet released his plan to phase out/reform Medicare, but given these comments it seems likely he’ll embrace something like what Paul Ryan has been advocating for years. It involves changing Medicare from a guaranteed single-payer government insurance plan into a voucher plan, in which the government gives senior citizens a set amount of money with which they can go out and get private health insurance. It saves money by limiting the value of that voucher, so if it’s less than what coverage actually costs, well, tough luck. In that way, it eliminates the central promise of Medicare, which is that every American senior citizen will have health coverage.
We’ll await Jeb’s particulars, but I promise you that most of the GOP candidates will embrace some version of this plan, because that’s what the Republican consensus on Medicare is these days. And it’s always justified with the argument Jeb gives: because of skyrocketing costs the program is doomed, so privatization is the only way to make sure it’s there for your kids. But don’t worry, current seniors, we won’t touch your Medicare! Which is one of the ironies of their argument: the free market is supposed to make everything wonderful, but they fall all over themselves to promise senior citizens that they won’t disturb the big-government, socialist program that seniors love.
Now on to the cost question. As it happens, the Medicare Trustees just released their annual report on the future of the program. And as Kevin Drum noted, things are looking a lot sunnier than they were a few years ago:
Ten years ago, Medicare was a runaway freight train. Spending was projected to increase indefinitely, rising to 13 percent of GDP by 2080. This year, spending is projected to slow down around 2040, and reaches only 6 percent of GDP by 2090. Six percent! That’s half what we thought a mere decade ago. If that isn’t spectacular, I don’t know what is.
Those are projections for what’s going to happen decades from now, so things are doubtless going to change. But the presumption of the Republican argument is that Medicare is eventually going to eat the entire federal budget, and so we have no choice but to fundamentally alter it. And that’s just not true.
The other assumption they make is that the way to alter Medicare is simple: privatize it. But they’re wrong about this, too. Medicare is expensive, but that’s not because it’s an inefficient big-government program. In fact, Medicare is remarkably efficient, more so than private insurance. That’s because it benefits from economies of scale, and because it doesn’t have to spend money on things like marketing, underwriting, and big salaries for executives. The reason Medicare is expensive is that American health care is expensive, and it serves a lot of people. The retirement of the large Baby Boom generation is what’s producing its current funding challenges.
Let’s not forget that at the same time Republicans cry that Medicare is unaffordable and so must be dismantled, they fight any effort to actually lower costs in a rational way. For instance, they’re adamantly opposed to comparative effectiveness research, which involves looking at competing treatments and seeing which ones actually work better. That this isn’t something Medicare already takes into account sounds ridiculous, but it’s true. If there are two medications for a particular ailment that are equally effective, but one costs $100 a year and one costs $100,000 a year, wouldn’t it make sense for Medicare to 1) find that out, and 2) make coverage decisions accordingly? But Republicans have said no — Medicare should just pay for both, no matter what it costs.
Republicans also oppose the most significant effort to reduce Medicare costs in decades, something called the Affordable Care Act, which included all kinds of provisions meant to achieve this goal. Perhaps most critically, the law starts a move away from the fee-for-service model, in which doctors and hospitals make more money the more procedures they do, to a model where they get paid a single rate for treating a patient. Under the fee-for-service model, if your hospital screws up, you get an infection, and you have to get re-admitted, they make more money; the ACA actually punishes them for that, giving them a greater incentive to provide better and less expensive care.
But Republicans not only want to repeal the ACA, which means repealing all those kinds of payment provisions, they have nothing much to say about how, specifically, we might save money in Medicare. Their only answer is that if we privatize it, the magic of the market will produce savings. Of course, if that were true America would have the cheapest health care system in the advanced world, since ours is already more private than in any other similar country. And yet we don’t — ours is far and away the most expensive, and that’s precisely because the market has failed.
So to sum up, this is the Republican argument on Medicare: We absolutely can’t do anything in particular that would bring down the cost of Medicare, but the cost of Medicare is so outrageous that we have no choice but to privatize it.
When Jeb Bush and the other candidates talk about this subject, pay close attention to what they say. They’ll use the word “strengthen” a lot — we want to strengthen Medicare! They’ll tell seniors, who vote in great numbers, that they aren’t going to touch their precious Medicare. And they’ll ignore what we’ve learned in the last few years, talking as though things look just as bad as they did before the Affordable Care Act was passed and health care spending slowed. But the truth is that their solution is no solution at all.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, July 24, 2015
GOP Returns To ‘Death Panels’ Narrative In Desperate Effort To Change The Medicare Story
Republican Member of Congress, Phil Gingrey (GA), has decided that the moment has arrived to get back on offense in the debate for the future of Medicare.
At a press conference earlier this week, Gingrey returned to one of the GOP’s favorite ‘boogeymen’ in an effort to make us forget just how much we hate the Republican approach to reforming Medicare. He went after the fifteen-member panel of medical experts established by the Affordable Care Act who go by the name the Independent Payment Advisory Board (IPAB).
According to Gingrey-
“Democrats like to picture us as pushing grandmother over the cliff or throwing someone under the bus. In either one of those scenarios, at least the senior has a chance to survive.
But under this IPAB we described that the Democrats put in Obamacare, where a bunch of bureaucrats decide whether you get care, such as continuing on dialysis or cancer chemotherapy, I guarantee you when you withdraw that the patient is going to die. It’s rationing.” (Via Politico)
Wow…that does sound scary! In fact, it sounds an awful lot like a …..Death Panel.
Thank goodness that absolutely nothing Gingrey said at his press conference beyond “My name is Phil Gingrey” has even the slightest connection to the truth.
Like it or not, here are the facts –
In order to keep Medicare spending under control, the Affordable Care Act, aka “Obamacare”, established specific target growth rates for the government program that cares for our seniors.
To ensure that these targets are met, the reform law created the IPAB for the purpose of monitoring the growth of Medicare spending and to make recommendations to cut the same in those years where it looks like we are going to blow past the targets – and only in those years.
So, if the growth in Medicare costs is staying within the boundaries set by law, the IPAB has no authority to propose any changes whatsoever.
Why was it necessary to create this panel of experts?
Prior to creation of the IPAB, it was left to Congress to make decisions about who and what should be covered by Medicare.
While Congress has long had their own board of experts to rely on (“Medipac”), the profound influence of special interests combined with a general lack of understanding of the world of medicine – and the economics that rule that world – made it fairly obvious that Congress was not the best place to get the job done.
If you doubt this, simply look at how poorly Congress has managed the growth in Medicare costs to date. And before you blame this on whichever president you would like to put in the crosshairs, you should be very clear that it is, indeed, the job of Congress to make these decisions and manage this policy.
The IPAB was created to solve this problem.
As noted earlier, the board has no statutory impact whatsoever on Medicare payment rates and policy during the years when the spending targets are being met. Their powers only come into play in those years where Medicare actuarial reports suggest we are spending too much money per the restrictions established by Obamacare.
During those years when the board is required to come up with proposals to get spending under control, they will provide these proposals to the DHHS who must then implement them – unless Congress takes it upon itself to come up with their own proposals and pass them into law.
Thus, Congress retains the absolute ability and opportunity to effectuate its own program to bring Medicare costs back in line with the targets any time they wish. Maybe it was me, but I don’t recall Gingrey pointing out this little detail. And there is something else that Representative Gingrey forgot to mention during his tirade. There is an entire list of policy items contained in the ACA that are specifically prohibited to the IPAB.
And what would you imagine is at the top of that list?
The Board is legally barred from proposing anything that will ration health care, restrict benefits or modify the eligibility criteria for beneficiaries.
What’s more, until 2020, the IPAB may not come up with proposals that place the rates being charged by primary hospitals and hospice programs in their sights. This prohibition was the result of the ACA already putting the moves on these organizations when it comes to what the government pays them. Thus, it seemed fair to give them some breathing room for the next eight years or so.
As a result of these inconvenient truths, it is rather difficult to concoct the scenario where Gingrey and friends see this insidious opportunity for the board to ration our health care.
The only argument I can imagine is to suggest that the board could recommend reducing the sums paid to physicians who provide Medicare services to patients. Were this to occur, more physicians might decide to drop out of Medicare, creating a longer waiting period for patients needing to see a doctor.
Of course, even this is not rationing.
Further, the SGR issue is about to become a thing of the past as Congress moves toward reaching a permanent solution to the problem created by an outdated formula that puts physicians in a position of taking major pay cuts from Medicare each year.
Once the physician payment issue is resolved, it becomes hard to see where the IPAB is going to exercise this health rationing Gingrey so fervently fears.
What should disturb each and every American is not only that Gingrey is willing to flat out lie in order to feather his political nest, he is using that lie to pull our attention away from the true health care rationers in our system – the private insurance companies.
Think this is a liberal red herring designed to distract you from the evil government plan to kill grandma?
Ask your physician about the hoops he or she must jump through to gain insurance company approval to do the job you hire them to do. Ask them how much of their time and money is wasted arguing with health insurance company representatives whose sole job is to turn down a requested procedure so that they will not have to pay for the same. Take a look at some of your statements from your insurer and see where they’ve denied payment on any number of technicalities resulting from a contract you signed that you could not possibly understand.
This is the true rationing problem in the United States today.
Still, polls continue to show that many Americans are deeply displeased with Obamacare.
I continue to believe that this is the direct result of so many of us not understanding what the legislation does – and does not – do.
But there is one thing we should all be able to understand.
If the opponents of health care reform and the current approach to Medicare are continuously left to base their arguments solely on lies, should it not occur to us all that maybe the law is better than what we’ve been led believe?
If not, why the lies instead of criticism based on the truth?
By: Rick Ungar, The Policy Page, Forbes, June 24, 2011
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