“Promoting Untrue Choice”: Paul Ryan’s Health Care Proposal Would Shrink The Medicare Doctor Pool
The federal budget proposed by Representative Paul Ryan, the Republican vice-presidential nominee, extols the benefits of “promoting true choice” for Medicare beneficiaries.
In truth, though, the Ryan plan would substantially reduce choice for many people on Medicare — by cutting them off from their current doctors.
Doctors see Medicare patients, despite the relatively low payments they receive for doing so, partly because Medicare represents such a large share of the health-care market.
If a substantial number of beneficiaries moved out of Medicare and into private plans, as Ryan proposes, doctors would have much less incentive to see Medicare patients. And the elderly who want to remain in traditional Medicare would risk being stranded.
The evidence suggests that, in time, this problem could well affect a large share of Medicare beneficiaries. To put that evidence in context, though, it helps to first review the history of the Ryan plan.
The proposal has changed since it was presented in 2011. In the original version, traditional Medicare was eventually to be replaced in its entirety by private plans. The Congressional Budget Office found that this shift would raise health-care costs drastically because the private plans wouldn’t be large enough to enjoy Medicare’s leverage in negotiating prices with hospitals and other large providers. The savings that private plans could achieve because beneficiaries would share more of the costs, and therefore economize more, would be more than offset by that loss of leverage — and by the private plans’ higher overhead and need to turn a profit.
Ryan Revision
In response to the devastating CBO report, Ryan revised his proposal. Under Ryan 2.0, private plans would co-exist with traditional Medicare. (The CBO hasn’t fully evaluated the revised plan yet.)
Many supporters argue that the new plan can’t be as big a problem as the old one, since beneficiaries could always choose to remain in traditional Medicare. In health care, however, choice isn’t always innocuous — and can sometimes be harmful.
I have previously described two downsides to expanding private plans in Medicare. First, it would undercut Medicare’s ability to help move the payment system away from fee-for- service reimbursement and toward payments based on value, because no private plan is large enough to accomplish that shift by itself. Second, the mechanism for adjusting premiums to even out the health risks of individual beneficiaries is far from perfect, so plans can easily game the system, raising total costs. In effect, the plans would end up being overpaid.
The reduced choice of doctors for those who remain in traditional Medicare is a third adverse consequence of moving beneficiaries out of the program.
Currently, Medicare beneficiaries almost universally enjoy excellent access to doctors. And the great majority of beneficiaries never have to wait long for a routine appointment, the Medicare Payment Advisory Commission has found. Roughly 90 percent of doctors accept new Medicare patients.
Doctors provide this access even though they are reimbursed by Medicare at rates that are only about 80 percent of commercial rates — partly because Medicare is such a large share of the market. Which brings us to the concern about the Ryan plan.
Medicare Doctors
How important is Medicare’s market share in influencing physician participation? The evidence is limited, but the best study to date suggests it is significant. In the 1990s, Peter Damiano, Elizabeth Momany, Jean Willard and Gerald Jogerst, all associated with the University of Iowa, surveyed Iowa physicians and examined variation among counties. They found that for each percentage-point increase in the share of Medicare beneficiaries in a county’s population, doctors were 16 percent more likely to accept patients on Medicare. The only other study I know of on this topic, an unpublished analysis by Matthew Eisenberg of Carnegie Mellon University, also found an effect from Medicare’s market share, albeit one that was substantially smaller than the one Damiano and his colleagues found.
About 10 percent of the U.S. population is now enrolled in traditional Medicare, and an additional 5 percent has private Medicare plans. Let’s assume, for the sake of argument, that the Ryan plan would cause another 5 percent of the population to shift, and to be conservative let’s cut in half the Damiano estimate of the impact from that reduction in Medicare’s market share. Then the chance that a doctor is willing to see traditional Medicare patients would be expected to decline by a whopping 40 percent. The share of doctors accepting Medicare would fall from about 90 percent to 54 percent.
To be even more conservative, let’s average the reduced Damiano estimate (already been cut in half and applied only to today’s market share rather than the higher one that will exist in the future when more people are on Medicare) with the Eisenberg estimate. Still, about 20 percent of doctors would be expected to stop accepting Medicare patients.
Supporters of the Ryan approach might argue that fewer people would shift into the private plans, so the impact would not be that great. After all, the existing Medicare program already offers Medicare Advantage plans, so perhaps anyone who wants private insurance already has it. But then, what is the point of Ryan’s Medicare reform?
Another defense might be that the government could simply raise doctor-reimbursement rates to encourage providers to continue treating a shrinking population of traditional Medicare patients. And that’s true. However, Ryan has not included the extra cost in his budget.
So, which is it, Mr. Ryan? Will your plan cause Medicare beneficiaries to lose access to their doctors, or are your budget numbers too rosy because you haven’t counted the extra payments needed to keep doctors in the program?
By: Peter Orszag, Council on Foreign Policy, Business Insider, September 24, 2012
“Running Out The Clock On Medicare”: Romney’s Constant “Delaying Counter-Attacks” That He Knows Won’t Survive Serious Scrutiny
Given what we know about the cynicism of the Romney campaign, it’s entirely possible its strategy for dealing with attacks on the Ryan Budget’s effect on Medicare will be to raise constant counter-attacks that don’t survive a moment’s serious scrutiny, but succeed each other quickly until Election Day arrives and the clock runs out.
The Big Bertha rolled out about the time Paul Ryan was selected as Mitt’s running-mate, based on one of the Big Lies of the 2010 campaign, was that Obama and congressional Democrats had “raided” $716 billion in Medicare funds to pay for its socialist efforts to give undeserving poor and sick people health insurance. When it was pointed out that the same “cuts” (actually negotiated reductions in provider reimbursements plus a paring back of the “bonus” subsidies for private Medicare Advantage plans) were included in Paul Ryan’s own budget plan, Romney quickly said he’d restore the money if elected.
Now that promise is drawing scrutiny, as noted by the New York Times‘ Jackie Calmes:
While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.
For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Mr. Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”
Marilyn Moon, vice president and director of the health program at the American Institutes for Research, calculated that restoring the $716 billion in Medicare savings would increase premiums and co-payments for beneficiaries by $342 a year on average over the next decade; in 2022, the average increase would be $577.
Worse yet, the only thing worse than the suggestion that Obama wants to “raid” Medicare to help “those people” is the idea that Romney wants to boost out-of-pocket expenses for seniors to provide a windfall to providers, a specter congressional Democrats are already raising:
“The bottom line,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee, which Mr. Ryan leads, “is that Romney is proposing to take more money from seniors in higher premiums and co-pays and hand it over to private insurance companies and other providers in the Medicare system.”
I don’t know exactly how the Romney campaign will get itself out of this latest box on Medicare, but I’m sure it will come up with something confusing enough to take time to rebut, and then turn its attention back to the evil plans of the incumbent to bring back the unconditional dole and in general let those people run riot at your expense, middle-class America!
Got that? Vote Romney and there’s more money for you! Vote Obama, and it’s less money for you, more money for those people!
Add in some selectively broadcast messages about stern father Mitt Romney not wanting dirty girls to have sex and get away with it, and that’s the heart of the GOP message this year, sad to say.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, August 22, 2012
“Mitt’s Non-Power Power Point”: Romney’s Whiteboard Presentation Proves “Wonk” Is a Meaningless Word
Mitt Romney and Paul Ryan have been celebrated as a team that might not be the most charismatic, but who are details-oriented number-crunchers who care deeply about policy—i.e., wonks. The w-word is a favorite faux-self-deprecating term of Washington people who are pretty sure they’re pretty smart. With Romney’s choice of Ryan, “wonk” is everywhere.
When The Wall Street Journal editorialized in favor of Ryan, they dismissed worries that he’s “too young, too wonky, too, you know, serious.” After his pick, he was described as “Jack Kemp wonky,” “a policy wonk,” “the Republican wonk star,” “a fit 42-year-old policy wonk,” and “the best of a policy wonk.” Ryan was a perfect match with Romney because “two wonks bonded during the Wisconsin primary,” a Republican strategist told National Journal. Romney and Ryan played up this idea in their first interview as a team with CBS’s Bob Scheiffer. Romney said, “This is a man who’s also very analytical. He’s a policy guy. People know him as a policy guy. That’s one of the reasons he has such respect on both sides of the aisle. I’m a policy guy, believe it or not. I love policy.” That “believe it or not” suggests there might be some doubt. You’d be right to have it after watching his whiteboard presentation on Medicare Thursday.
Romney has a reputation for loving data, as expressed through his love of PowerPoint. The PowerPoint presentation and the whiteboard are supposed to signal smart data-driven analysis. But the whole point is to actually show the data. Romney did not do that today, as you can see in this video posted by Politico’s Alexander Burns. Romney divided up a whiteboard into two columns and two rows, showing how current seniors and the next generation of seniors would be affected under his and President Obama’s proposals. He did this because Democrats are attacking him for Ryan’s old plan to turn Medicare into a voucher program and his new plan to make the vouchers an option. Democrats have also screamed bloody murder over Romney’s attacks that Obama will cut $716 billion from Medicare, when Ryan’s plan keeps those cuts, and the cuts affect how much providers are paid, not what health services old folks receive. But Romney’s counter-counter-counter attack did not address those attacks. Instead, he reiterated his claim about the $716 billion. As for the next generation of seniors? Under Obama, Romney wrote “bankrupt.” Under Romney, Romney wrote “solvent.” Well, that explains everything.
Just because a campaign’s talking points were written on a thing used to show details doesn’t mean actual details were shown. The Romney campaign has been careful to avoid getting too deep into the details of the candidate’s economic proposals, because they want to make the election a referrendum on President Obama. But refusing to dip into the details is not the sign of a wonk, it’s the opposite. This was most apparent when Fox News’ Brit Hume pressed Ryan on when his plan would balance the budget. Ryan tried to get out of answering by saying he didn’t want to “get wonky on you” before admitting he didn’t know, because the numbers have not been crunched.
Hume: “I get that. What about balance?”
Ryan: “I don’t know exactly what the balance is. I don’t want to get wonky on you, but we haven’t run the numbers on that specific plan. The plan we offer in the House balances the budget. I’d put a contrast. President Obama, never once, ever, has offered a plan to ever balance the budget. The United States Senate, they haven’t even balanced, they haven’t passed a budget in three years.”
Hume: “I understand that. But your own budget, that you —
Ryan: “You are talking about the House budget?”
Hume: “I’m talking about the House budget. Your budget will be a political issue in this campaign.”
Ryan: “The House budget doesn’t balance until the 2030s under the current measurement of the CBO (Congressional Budget Office) baseline.”
By: Elspeth Reeve, The Atlantic, August 16, 2012
“A Suspension Of Intellectual Honesty”: Mitt Romney And Paul Ryan’s Medicare Hypocrisy
On the matter of Medicare, Mitt Romney’s campaign seems to have adopted the approach that the best defense is a good offense. And while it should come as no surprise that their attacks require a degree of shamelessness and a suspension of intellectual honesty, the scope of it is breathtaking.
When the former Massachusetts governor tapped House Budget Committee Chairman Paul Ryan as his running mate, he immediately took ownership of Ryan’s biggest liability, that he proposed to replace Medicare, the Great Society-era program which guaranteed health coverage for senior citizens, with a voucher-based program of the same name. The vouchers would cover a diminishing portion of seniors’ healthcare costs and they’d be on the hook for the balance. The fundamental promise of Medicare would be gone.
Understandably, this proposal is unpopular, especially among senior citizens (though he exempts current Medicare beneficiaries from his proposal). So how has the Romney campaign elected to deal with this political problem? Going on offense, of course.
Obama, Romney and the GOP has started charging, “robbed” Medicare to pay for his health reform program. It’s true that Obamacare cut Medicare reimbursements (not benefits). That would be a clean political hit attack but for one small problem the Romney-Ryan team has: Ryan’s budget keeps those $700 billion in cuts. Oh, and Romney has endorsed Ryan’s budget.
If that sounds confusing, here it is more simply: Romney and Ryan are condemning Obama for Medicare cuts that they both endorse. Like I said, it’s pretty breathtaking.
But wait, there’s more.
As The New Republic’s Jonathan Cohn writes:
The most significant difference between the two sides, at least for the short- to medium-term, is how they handle the savings these cuts generate. Obamacare puts the money back into the pockets of people who need help with their medical bills. A portion of the money is earmarked for children and non-elderly Americans, who, starting in 2014, will become eligible for Medicaid or receive tax credits to offset the cost of private insurance. A smaller, but still significant, portion of the money is for seniors. It helps them pay for prescription drugs, by filling the “donut hole” in Medicare Part D coverage. It also eliminates out-of-pocket costs for annual wellness visits, some cancer screenings, and other preventative services.
Ryan’s budget—which, again, Romney has repeatedly embraced and said he would sign—actually takes those new benefits away. The Part D donut hole would open back up. Access to free preventative care would vanish. And where would Ryan and Romney put the money instead? They say it’s for deficit reduction. I’d say it’s really for their big new tax cuts, which disproportionately benefit the wealthy.
If nothing else, the Romney-Ryan campaign has an impressive level of chutzpah.
BY” Robert Schlesinger, Washington Whispers, U. S. News and World Report, August 13, 2012
“Romney’s Cliff Notes Version Of The Ryan Plan”: Your Guide To “Ending Medicare As We Know It”
It’ll be the next argument in the campaign, so it’s a good time to brush up.
Yesterday, President Obama went to Florida and told seniors that Mitt Romney wants to end Medicare as we know it, and it appears that this argument (and some related ones) will be a central feature of the Obama campaign’s message in the coming days. It’s entirely possible, as Jonathan Chait has suggested, that all the Obama campaign’s attacks on Romney’s finances and record at Bain Capital are the first stage of a two-stage strategy that culminates with an attack on the Ryan budget. Since we’ll be talking about this a lot soon, I thought it might be worthwhile to refresh our memories on what this is all about, particularly with regard to Medicare, and how it relates to the current campaign.
First: Is it fair to tar Mitt Romney with the Ryan plan? No question. While Romney’s own policy proposals are quite a bit more vague than the Ryan plan is, they follow the same contours, and when Romney is asked about the Ryan plan he never hesitates to praise it. When asked about it last month, Romney’s chief strategist Eric Fehrstrom said of his boss, “He’s for the Ryan plan.” Or in Romney’s own words, “I’m very supportive of the Ryan budget plan. It’s a bold and exciting effort on his part and on the part of the Republicans and it’s very much consistent with what I put out earlier.” Enough said.
Next: Does the Ryan plan actually “end Medicare as we know it”? This is the phrase that Democrats have used in the past to describe it, and that Obama will continue to use. Republicans claim the phrase is unfair and demagogic. But while it would be inaccurate to simply say the Ryan plan “ends Medicare,” because if the plan were enacted there would still be a program going by the name of “Medicare,” it is fair to say that Medicare would be a drastically different program, and some of the critical things that make it so successful would no longer exist.
Today’s Medicare is an insurance program. If you’re a senior, you go to your doctor, and your doctor gets paid by Medicare. It is a single-payer program that covers every senior, and though it doesn’t pay for every conceivable procedure, because of Medicare’s universality there are essentially no uninsured seniors in America, no seniors who are subject to the tender mercies of the notoriously unmerciful insurance companies, no seniors who need to worry about their pre-existing conditions or their lifetime limits or any of the other ways those companies find to screw their customers, and almost no seniors who find it impossible to pay their insurance premiums (seniors do contribute premiums to Medicare, but they are quite modest).
The Ryan plan in its initial incarnation eliminated Medicare as an insurance program, and replaced it with “premium support.” There’s an argument about whether premium support can be described accurately as a “voucher,” but that’s nothing more than a silly disagreement about semantics; premium support in practice is no different from any voucher. Under this plan, seniors would have to get their insurance from private companies, and the government would pay part of the cost. If those private premiums go up, then seniors will have to pay more out of their own pockets; indeed, this is a feature, not a bug, of the Ryan plan. The whole point is to limit government spending on Medicare by limiting how much seniors get in their vouchers/premium support.
And those limits could be vicious. The Ryan plan caps the growth of Medicare at GDP growth plus 0.5 percent. If health costs rise faster than that, seniors will have to pick up more and more of the tab. That means that if the Ryan plan were enacted, there would likely be many seniors who couldn’t afford private premiums and would have no health coverage. This feature of the plan eliminates one of the fundamental pillars of Medicare: that it is an entitlement, meaning that if you qualify, you’re entitled to the benefit. If this year’s costs are higher than we’d like, we can make changes to the program for next year, but nobody goes without coverage. Under the Ryan plan, that would no longer be true.
But here’s an important thing to keep in mind: After Ryan released the first version of his plan in 2011 and caught a whole bunch of flak for basically destroying Medicare, he came back with a revised plan earlier this year that has one critical difference: it allows seniors, if they so choose, to stay on traditional Medicare. Mitt Romney’s Medicare plan does the same thing (Romney’s plan, such as it is, is basically a Cliff Notes version of the Ryan plan). In other words, under political pressure they embraced a public option. But since the plan still caps overall spending at GDP+.05, seniors would likely have to pay more and more out of their own pockets, likely thousands of dollars.
At this point, it’s good to remind ourselves that Medicare does a far better job of controlling costs than private insurance does, partly because of the negotiating power it has and partly because it spends just a fraction of what private companies do on overhead (around 98 percent of Medicare’s costs go to paying for care, while private companies often spend 20 percent or more of their costs on administration, marketing, underwriting, and so on). Yet Republican philosophy tells us that no matter what the facts say, this is just impossible. A government program can’t possibly be cheaper and more efficient (and deliver service that its customers love, by the way) than a private sector alternative. So if we introduce private competition, then costs will of course come down.
But there isn’t much reason to believe they will, which means seniors will be left holding the bag, and most importantly, lose the security they have now. Anyhow, to return to the question we started with: Is it fair for the Obama campaign to charge that Mitt Romney wants to end Medicare as we know it? If you define “Medicare as we know it” as an insurance program that provides affordable, efficient, and most importantly secure health coverage for every American senior, then the answer is clearly yes.
By: Paul Waldman, Contributing Editor, The American Prospect, July 20, 2012
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