Category: Seniors

Fee-For-Service Would Have Cost Less

In Bensonhurst, Brooklyn, at the new R&G Social Adult Day Care Center, known locally among elderly immigrants for luring clients with cash and grocery vouchers, most people there for lunch did not stay to eat. Instead, many walked briskly toward the subway carrying bags stuffed with takeout containers, and two elderly men rode away on bicycles with the free food.

Not a wheelchair or walker was in sight at these so-called social adult day care centers. Yet the cost of attendance was indirectly being paid by Medicaid, under Gov. Andrew M. Cuomo‘s sweeping redesign of $2 billion in spending on long-term care meant for the impaired elderly and those with disabilities.

Such centers have mushroomed, from storefronts and basements to a new development in the Bronx that recently figured in a corruption scandal. With little regulation and less oversight, they grew in two years from eight tiny programs for people with dementia to at least 192 businesses across the city.

Next time you hear someone say how we need to replace fee-for-service payment with bundled payments plus managed care, pull out this article from the NYT. Matt Yglesias comments.

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Apr 23, 2013 | 11 comments | by

Working Longer

An increase in the average retirement age from 64 to 68 would save about 20 percent in social security payments since the average number of years in retirement would be cut by about 20%. Similarly, an increase in retirement age to 70 would save about 25 percent in social security retirement benefits. Either change would also add significantly to revenue from social security taxes since workers would be employed for several additional years. Therefore, such increases in age of eligibility for social security benefits would go a long way toward solving the looming social security financial “crisis.”

More on this issue in The Becker-Posner Blog.

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Mar 14, 2013 | 11 comments | by

Ah, the Bureaucracy

Of the 1.1 billion claims submitted to Medicare in 2010 for hospitalizations, nursing home care, doctor’s visits, tests and physical therapy, 117 million were denied. Of those, only 2 percent were appealed.

More from Susan Jaffe from the Kaiser Health News.

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Dec 21, 2012 | 6 comments | by

Buying Off Seniors to Win an Election

In the 19th Century, it wasn’t unheard of for politicians to pay constituents for votes with cash payments, livestock and even whiskey. Although election-day gifts of pigs, chickens and whiskey have long since gone by the wayside, modern day political parties have other ways of buying votes — at least that’s what Republican Rep. Darrell Issa, is alleging. Issa, the chairman of the House Oversight and Government Reform Committee, is accusing the Department of Health and Human Services of using an $8 billion program that pays bonuses to Medicare Advantage plans to “buy” the election.

His office wants to investigate whether they bonus payments are designed to temporarily hide the detrimental effects of the Affordable Care Act from seniors until after the election. The ACA, the federal health care law signed into law by President Obama, is slated to cut about $716 billion from the Medicare program over the next decade. Of this, $156 billion is due to be cut from Medicare Advantage plans. Issa has threatened to subpoena the documents on the Medicare Advantage bonus program if the Department of Health and Human Services does not willingly turn them over.

More about this issue from Fox News.

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Oct 23, 2012 | 9 comments | by

ACA Effects on Seniors: Costs Exceed Benefits by 15 to 1

[A]ccording to the Congressional Budget Office, for every $500 the law spends on preventive services and prescription drugs, it cuts the rest of Medicare by $7,385. That’s a cut-to-spending ratio of nearly 15 to 1.

 

Sources: Avik Roy, CBO.

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Oct 04, 2012 | 9 comments | by

AARP Makes $2.8 Billion Off Of ObamaCare

Avik Roy explains:

Here’s how it works. AARP isn’t your every-day citizens’ advocacy group. The AARP is also one of the largest private health insurers in America. In 2011, the AARP generated $458 million in royalty fees from so-called “Medigap” plans, nearly twice the $266 million the lobby receives in membership dues.

Medigap plans are private insurance plans that seniors buy to cover the things that traditional, government-run Medicare doesn’t, like catastrophic coverage. Medigap plans also help seniors eliminate the co-pays and deductibles that are designed to restrain wasteful Medicare spending…ObamaCare’s cuts to Medicare Advantage will drive many seniors out of that program, and into traditional government-run Medicare, which will increase the number of people who need Medigap insurance.

Benefit to AARP: $1 billion over the next ten years. Plus there is another $1.8 billion subsidy because AARP’s insurance is exempted from the general health insurance reforms. Chris Jacobs explains:

  1. AARP’s lucrative Medigap insurance was exempted in ObamaCare from the ban on pre-existing conditions; medical loss ratio requirements; caps on insurance industry executive compensation; and the tax on all other health insurance plans.
  2. The Department of Health and Human Services…also exempted Medigap insurance from premium rate review — even though AARP, which carries the plan with the largest market share, earns greater profits the more seniors pay in premiums.
  3. At a conference hosted by America’s Health Insurance Plans in March 2010, HHS Secretary Sebelius encouraged the insurance industry to give up some of its profits, at a time when health insurance profit margins were about 2 percent. Yet neither Secretary Sebelius nor anyone else in the Administration ever criticized AARP for making a profit margin of nearly 5 percent on its Medigap insurance.
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Sep 24, 2012 | 11 comments | by

Has David Cutler Lost it?

Last Friday the liberal Center for American Progress released a paper co-authored by Harvard professor David Cutler that amounted to a partisan – and thoroughly un-principled – attack on conservative entitlement reform proposals. When it comes to premium support proposals [e.g., Paul Ryan's] in Medicare, the CAP paper alleged that traditional, government-run Medicare would be cheaper for senior citizens than a choice of private plans…

This position would be slightly less disingenuous had not both CAP and Cutler himself, in a paper Cutler co-authored earlier this month, taken the exact opposite position and put out similarly detailed projections about how much more seniors would pay — not because private plans would be less efficient than government-run Medicare, but because they would be more efficient.

Chris Jacobs.

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Aug 29, 2012 | 11 comments | by

Shouldn’t this Be the Goal of Financial Planning?

We find that a substantial fraction of persons die with virtually no financial assets — 46.1 percent with less than $10,000 — and many of these households also have no housing wealth and rely almost entirely on Social Security benefits for support. In addition this group is disproportionately in poor health. Based on a replacement rate comparison, many of these households may be deemed to have been well-prepared for retirement, in the sense that their income in their final years was not substantially lower than their income in their late 50s or early 60s.

So, did these people plan poorly? Or did they plan perfectly?

NBER study here.

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Aug 14, 2012 | 8 comments | by

Just How Progressive Are Elderly Entitlements?

Not as progressive as you might think. This is from Health Affairs via Sarah Kliff:

We know that education has a big impact on earnings and the ability to find employment. It also turns out to have a huge influence on how long Americans live: White men with less than a high school diploma had a life expectancy 12.9 years shorter than those with 16 or more years of education, according to new research in the journal Health Affairs. For women, the life expectancy gap stands at 10.4 years.

The Social Security payout formula is progressive. But less educated workers can expect to receive more than a decade’s worth of fewer benefits. Ditto for Medicare. See our previous post here.

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Aug 13, 2012 | 8 comments | by

Hi Ho, Hi Ho, It’s Off to…

For a given level of mortality, we find employment rates of older men vary substantially through time and across countries. At each mortality rate in 2007, if men in France worked as much as men in the United States, they would work 4.6 years more over ages 55 to 69 than they actually did. Comparing the work and mortality of American men in 2007 to the base year of 1977, the same calculation yields 3.7 years more work. These findings suggest a large increase in the health capacity to work, as measured by mortality. The relationship between cross-country mortality and changes in work over time at older ages is weak, suggesting the take-up of this extra capacity to work has varied. However, the dispersion in employment given mortality is strongly influenced by the retirement incentives inherent in public pension programs.

Source: NBER Working Paper.

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Jul 17, 2012 | 4 comments | by
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