The Puzzling War on the Elderly

There are a group of private health plans that are ostensibly doing everything President Obama says he wants to accomplish with health reform:

  • They provide subsidized coverage to low- and moderate-income people who could otherwise not afford it.
  • They control costs better than conventional insurance by eliminating unnecessary care.
  • They provide higher quality care.
  • They have no pre-existing condition limitations and some plans actually specialize in attracting and caring for patients with multiple illnesses.
  • They provide an annual choice of plans.
  • They even compete against a public plan.

So what does President Obama think about these plans? He wants to get rid of them, or at least cut them way back. So do many Democrats in Congress.

Stop, hey, what’s that sound
Everybody look what’s going down

Hostility Toward Medicare Advantage Plans. About one in every four seniors is enrolled in a Medicare Advantage (MA) Plan, a private alternative to conventional Medicare. These plans have primarily low- and moderate-income members — seniors who have too much income to qualify for Medicaid, but are generally too poor to be able to afford supplemental, medigap insurance. Without Medicare Advantage, these seniors would have only the skimpy benefits that Medicare provides — leaving them exposed to thousands of dollars in potential out-of-pocket costs. With Medicare Advantage, they have the kind of coverage comparable to what most nonseniors have.

An enormous amount of consternation exists over the fact that the government is paying MA plans about 13% more than what would have been spent under conventional Medicare. This is partly explained by the influence of members of Congress who represent rural areas and who want MA plans to be available to seniors who would not otherwise have access to them.

In any event, the “overpayments” in rural areas and some urban areas have resulted in extra benefits, including lower out-of-pocket payments and better coverage for drugs, preventive care, and chronic disease care. On the average, MA plans provide approximately $825 in added benefits annually compared to traditional Medicare.

However, these extra benefits vary radically, from one area to another. In places like Florida, where basic Medicare apparently substantially overpays for services, MA plans are able to provide substantial extras for Medicare’s average payment. In Minnesota, by contrast, Medicare payments to providers are less generous and MA plans provide fewer extra benefits.

On measures of quality and efficiency, how do MA plans stack up against conventional Medicare? Quite well. According to a study by AHIP (which represents MA insurers):

  • MA enrollees had 33% more doctor visits (presumably representing more primary care), yet experienced 18% fewer hospital days and 10% fewer hospital admissions.
  • More importantly, MA enrollees had 27% fewer emergency room visits, 13% fewer avoidable admissions and 42% fewer readmissions.

This is not to say that the MA programs could not be improved. Right now, almost all the enrollees are in HMOs. Very few have a Health Savings Account plan. And there is no practical way for the chronically ill to manage their own budgets, the way the Medicaid disabled can in the Cash and Counseling pilot programs.

Still, the puzzle in all this is the hostility of many Democrats toward a program that primarily benefits likely Democratic voters and their desire to take away these benefits in order to create new benefits (and undoubtedly more generous coverage) for nonseniors.

Overall Hostility Toward the Elderly. The antipathy health reformers are showing toward MA plans is part of an overall pattern. Clearly, the reformers intend to pay for increased health insurance coverage for nonseniors by taking resources away from seniors. Consider that:

  • The Obama Administration has pledged to cut $156 billion (over 10 years) out of Medicare.
  • It wants to cut an additional $177 billion in payments to MA plans.
  • Also, expansion of insurance coverage for nonseniors will almost certainly create access problems for the elderly.

On this last point, consider what happened in Massachusetts — the model for Obama Care. On paper, the number of uninsured were more than halved and many previously insured now have more generous coverage. But there was no increase in the supply of physicians. As a result, waiting times to see a new doctor in Boston are twice as long as they are in any other US city; and the number of people going to emergency rooms for nonemergency care is as high today as it was three years ago.

The problem for seniors is that they are in a plan that pays doctors about 30 percent below the market rate. So as demand increases and supply problems become more severe, the elderly will increasingly be pushed to the back of the waiting lines. Already, an increasing number of doctors are refusing to accept new Medicare patients. Expect that problem to get worse.

Special Interests Versus the Elderly. Even more bizarre is the fact that under the House’s reform bill, the cuts in MA payments would be greatest for some of the most efficient plans and smallest for some of the least efficient. For example, President Obama recently asked the White House Staff to read a New Yorker article, arguing that Medicare spending was very wasteful in McAllen, Texas, compared to El Paso. So what does the House bill do? It makes substantial cuts to El Paso MA plans and barely cuts the McAllen plans at all.

Go figure.

Comments (32)

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  1. Joe S. says:

    Very good post.

  2. Michael Kirsch, M.D. says:

    Agree, nice post. The seniors are getting wiser by the wk. They are realizing that they can only lose with Obamacare. At present, they can receive nearly unlimited medical care at very limited personal expense. It will be difficult to improve upon this, from their viewpoint. This will pose a potent political issue from the president when one of his most powerful and influential constituencies steps back from him on health care. Of course, for Obamacare dissenters, like me, this is a welcome development. http://www.MDWhistleblower.blogspot.com

  3. Juan O. says:

    Very informative. Apparently, when the President says you can keep the insurance you have — he doesn’t mean Medicare Advantage.

  4. Devon Herrick says:

    It is somewhat strange that AARP supports ObamaCare. If you were a powerful lobby for the one group that has: 1) high medical spending; and 2) a statutory entitlement to medical care, why would you advocate expanding the entitlement to other groups knowing the huge increase in spending would necessitate rationing care to your own constituents? Have the executives at AARP never read Garrett Hardin’s classic article, “The Tragedy of the Commons?”

  5. Uwe Reinhardt says:

    I think Obama should not burden the eldery with any cuts to Medicare butjust copy George W. Bush and his Congress in dealing with the elderly. G.W. Bush was a cool guy, in my book. I miss him.

    George W. Bush and his then Republican Congress together passed the Medicare Modernization Act in 2003, which provided substantial subsidies towards the purchase of prescription drugs by the elderly and also proviced them through Medicare Advantage with the added subsidies relative to traditional Medicare that John talks about. But they had top join a private plan to get that subsidy.

    The CMS actuaries now estimate that over the period from 2010 to 2019, the drug benefit of the MMA ’03 alone will cost Medicare (i.e., taxpayers) $1 trillion. Add to that the $177 extra paid the Medicare Advantage plans, and we are talking about $1.177 trillion.

    Did I say “taxpayers?” That is correct. But not current taxpayers. Instead our children and their children. Here’s how that goes.

    Did President Bush and his Congress raise the taxes of their contemporaries to pay for the new entitlement, so as not to increase the deficit and burden future generations? Nope.

    Did they cut federal health spending and Medicare or Medicaid to cover the cost of the new MMA ’03, so as not to burden future generations? Nope.

    They did the logical thing, learned from Ronald Reagan. They simply added the cost of the MMA ’03 to the federal deficit, as they also had added the cost of our two wars.

    And why not? In those days the Wall Street Journal editorial page told us deficits don’t matter.

    Of course, with the US national household savings rate near 0 at the time, the large federal deficits in those years could not be fully home-financed by having Americans buy the associated US Treaury bonds.

    Was that a problem? Nope. We simply sold the bonds to the Chinese, the Japanese, the sheiks and kings of the Middle East, and so on.

    The general idea was that the elderly’s grand children should have to pay for the new drug benefits enacted in 2003 and enjoyed by the elderly since 2006.

    If you ask me, I think that was all really cool.

    And I wish Obama would stop talking about not wanting to burden the deficit with the cost health reform and just add the cost — by coincidence also about $1 trillion over 2010-2019 — to our deficit, letting our grandchildren pay for that, too. Why worry about our grandchildren?

    Now, how could you have missed that cool angle, John? In this way, Obama would not have tohave a “war on the elderly.” On the contrary, he could fill the donut hole in the MMA ’03 with more federal money and just put it on the tab, as George Bush had done.

  6. Ron Trowbridge says:

    The Medicare stipend is 13% higher for Medicare Advantage plans than for regular Medicare. Can anyone tell me roughly what this 13% amounts to in terms of dollars per year averaged over the 50 states? I have an MA plan and it’s great. But why should my provider be able to get a 13% larger stipend than my neighbor’s who’s on regular Medicare? Goodman gives some good evidence for this disparity, showing how much it reduces medical costs elsewhere. But can we get stronger and more evidence for a stronger case in defense of the disparity?

    This year my MA premium costs increased. I take it these premiums will continue to rise with Obama’s Medicare-stipend reduction–to the point one day of MA termination? Am I wrong? Thanks for any figures. ronaldtrowbridge@gmail.com

  7. John J. McDermott III, M.D. says:

    In California these plans reimuburse physicians via capitation. This provides a strong incentive for physicians to ration care as they are paid the same amount per member per month whether they do any care (or surgery) or not.

    As a specialist surgeon who took care of patients with MA plans for several years I cannot tell you how many patients ended up on my doorstep who had very obvious conditions that had not been treated due to the perverse incentives under the capitated MA plans. Many of these patients had bounced around from doctor to doctor for years and were told nothing could be done about their problem.

    I would advise you to talk to specialists in California on the merits of MA plans. Ask how many of these doctors would willingly enroll one of their family members in such a plan.

    Obamacare is not the answer. But, please, you can do much better then MA plans as a counterexample.

  8. David Darrigan says:

    Your first few paragraphs were very general. So who are the private health plans offering that? It sounds like you are talking about co ops???

  9. Pam Villarreal says:

    With about 9 million seniors on Medicare Advantage plans (mainly low and moderate-income households), it’s a shame that the Obama Administration wants to cut these. These plans are so competitive that many of them are starting to offer dental coverage to differientate themselves. A recent study on seniors and credit card debt found that dental expenses are one of the main health care expenses on seniors’s credit cards. This plan to trim Medicare Advantage is most certainly a war on the poor.

  10. Paul Nachtwey says:

    Uwe, what point are you trying to make? that we have to raise taxes to support new entitlements? that deficit spending is bad? that you didn’t like bush or reagan before him? what you haven’t mentioned is that it is really uncool that 75% of government spending is wealth transfer, that we suffer under a confiscatory and uncompetitive tax system that stiffles risk taking and innovation, that drives resources out of the country, and destroys jobs that once were, and ensures other jobs yet made will never be. a vibrant economy with flourishing employment and rising standards of living benefits the most in the most important ways and should be our greatest aim. An unfair tax system is our greatest threat to achieving the most for all citizens. Take a moment to watch the old tape of Milton Friedman on Phil Donahue.

  11. John Seater says:

    Uwe,

    You know a lot about the economics of health and you favor extensive federal intervention in just about all corners of the health care market, so it would be useful if you would enlighten the rest of us about your reasons.

    It would be helpful if you would address some obvious questions. Specifically, just what market failures are corrected by Medicare and Medicaid? What market failures are corrected by the bill before the House of Representatives? What market failures are corrected by state governments preventing their competition of insurance companies across state lines? What market failures are corrected by local health boards run by existing local hospitals deciding whether or not (always not, in my experience) new entrants will be allowed to enter? Are all of the provisions in the House bill useful in correcting market failures? Most? Any?

    My understanding is that the main (only?) market failures in the health market are adverse selection and moral hazard. Mandating universal insurance fixes adverse selection, but one cost is an increase in moral hazard, in that nobody will have an incentive to discipline his own behavior under threat of losing coverage or paying higher premiums. Even leaving that aside, I have seen no cost/benefit analysis showing that there is a net social benefit in requiring people to buy insurance they otherwise would not buy. I therefore currently am in the dark about the economic justification for both existing and proposed federal interventions in the health care market.

    I support government action that corrects market failures and could be persuaded that some kind of government intervention in the health market would be proper. However, I also am inclined to believe that virtually everything about Medicare, Medicaid, and Obamacare have nothing to do with market failures but rather everything to do with abstract arguments that government somehow does a better job than the market and with very concrete political power grabs. I am open to reasonable argument, though, and you are one of the best-positioned people to offer such. I look forward to your reply.

  12. Joseph Mehan says:

    Why not just go back to paying your own bills–with your own money–before tax. That’s the way it was. If you really want to help all –opt for Health Savings plans, let Insurance companies cross State lines AND really want to help people with differing incomes (rather than Socialize them)have Insurance companies adhere to a income distribution in their States–charge a sliding scale on regular care with an catastrophe policy for Major items like cancer, transplants,etc. This cares for the lower income people–but protects them in major expenditures

    Obamacare is directed toward Socialism–a failure from the word GO-that is- unless you are part of the elite- then you exempt yourself from the legislation –as the Congress has already done.
    All the comments I have read 1) do not want to admit there are and always will be different income levels and 2)provide for this fact by a system –Health Care Advantage, Medicare, Medicaid that MAY (if done right–when has this been true?) Paying your own way is what people really want

  13. Uwe Reinhardt says:

    Paul Nachtwey asks what point I was trying to make with my earlier post.

    John was complaining that Obama’s attempt to finance part of the new entitlements that will emerge from health reform by trimming some spending off the existing Medicare is tantamount to making war on the elderly.

    My point was that perhaps Obama should copy George W. Bush and simply charge the cost of the new entitlements to future generations of US taxpayers via increased deficits, as Bush did with the MMA ’03.

    The other points raised by Paul are a different discussion entirely. I was merely responding to John’s column.

    Uwe

  14. John Goodman says:

    Uwe, I opposed the Medicare prescription drug bill. Jeanette opposed it. Our cat, Alexander, opposed it. All right thinking people opposed it.

    Yes. The Republicans were awful. Democrats would have been worse. Do you remember? House Democrats opposed the MMA because they wanted to spend twice as much money as the Republicans.

    Anyway, now that we are looking at an additional $9 trillion debt for our kids, hold on to your wallet.

  15. Uwe Reinhardt says:

    John Seater makes the important point that there are regulatory failures just as there are market failures. And “failure” here lies, like beauty and honor, in the eyes of the beholder.

    I think of the process of defining “failure” in thos context in two steps.

    First, specify clearly what social objectives are to be reached by a particular activity — e.g., health insurance or health care. Here alone opinions will differ vastly among Americans, which ipso facto implies that opinions will differ on what constitutes regulatory or market failure.

    Second, in terms of a particular social objective to be achieved, which approach — a free market approach or a regulatory approach — is more likely to reach or come closest to reaching that objective with the least sacrifice of real resources.

    There is a pretense in this country expressed by the mantra: “We all want the same thing in health care, but merely quibble about the means to get there.”

    I believe we do not at all want the reach the same end in health care, but we rarely discuss it openly. Instead, we argue purely about the means in a pointless debate.

    So before one could even answer John’s question, one would have to have a discussion on the end to be achieved by health policy.

    For example, I could agree that there is no case for mandating the purchase of health insurance upon the individual if hospitals were free to let patients die on their doorsteps unless patients have the means to pay the hospital the price it charges for a life-saving intervention.

    But if part of our social goal is that we should run a health system in which no American should be allowed to die for want of his or her ability to pay for a life-saving intervention, then a mandate upon the individual to have at least catastrophic health insurance makes sense to me. What we now have — freeloading — does not make sense to me at all.

    Uwe

  16. Robert Russell says:

    Bless you for what you are doing!

  17. hoads says:

    Yes, those who advocate for less regulation, more market oriented healthcare accept the fact that healthcare reform should not sacrifice quality, innovation and individualized healthcare for social equity in healthcare. The collectivists wish to impose constraints on those 3 attributes based upon their premise of healthcare as a “moral obligation”. This premise necessarily makes the individual subservient to the state and empowers the state to act on behalf (or more accurately, to the detriment) of the individual.

    What is missing from the “moral obligation” argument is that because our healthcare delivery system has been knee capped by onerous and haphazard government regulation, the unintended consequences of such has been the suppression of the type of administrative innovation and technological progress that would indeed inspire a healthcare delivery system that meets the needs of all. It is government intrusion that has created the current fragmented and inefficient healthcare system.

    The collectivists assess the current healthcare system and seek to impose regulation onto a system made partially dysfunctional by these same collectivists. They arrogantly proceed as if they have their thumb on all the information and data needed to procure a solution when in fact, they are doing nothing but heaping more dysfunction on top of dysfunction. Their goal of social equity in healthcare is not achievable so good intentions are accepted as good enough.

    Nothing is more personal than healthcare. Individuals do not share the same healthcare goals nor do they each have the same expectations of medical care. Believe it or not, there are some who are not worried that their personal habits and healthcare negligence will result in future hardship or an untimely death. There are others however, who strive to adhere to healthy habits, demand the best healthcare available and are willing to sacrifice in order to comply with a medical regiment. The difference between the two allows for freedom of choice and resulting consequences in healthcare since we cannot measure the costs and benefits of the individual healthcare decisions of either group.

    Collectivists are only looking at one side of the equation– the cost and consumption of medical care. The other side includes such human factors as inclination, motivation, determination in the pursuance and procurement of healthcare and these are not amenable to measurement in a way that can result in achieving a healthcare system where “social equity” is the primary goal.

  18. Timothy Browne says:

    John,

    So far I have heard plenty about a Government health care plan, but I have not heard anything about a “Health Care Voucher”. Food stamps are essentially a voucher for food to allow low income people to access food. One does not see government grocery stores in every town and hamlet. Why does Obama push a National Health Insurance Company operated by a massive bureaucracy when an infrastructure already exists in the private sector?? Conversely, why doesn’t the private sector suggest a voucher system as an alternative or ObamaCare??

  19. Mo says:

    Moral hazard and adverse selection are both the consequence of government intervention. The problem of adverse selection is that insurance is a bargain if you’re sick and an unnecessary expense if you’re healthy. But that can be solved by charging sick people a higher price.

    Insurance is supposed to be an arrangement for risk pooling. If you have extraordinarily high risks, and are going to cost the insurance company huge amounts of money there is no justification for their passing those costs on to other people. In a system where people are free to choose, an insurance company that tries to do that would go out of business.

    But insurance has been perverted. The free market of insurance didn’t fail. The welfare-state perversion of insurance is what’ failing. And that is driven by egalitarianism, the same thing which is destroying everything in its path.

  20. Mo says:

    Also

    There is no such thing as “market failure”. Markets are a precondition of a successful society; they are not a guarantee of it, nor do they guarantee the realization of any particular goal. Individuals fail in the pursuit of specific goals; markets do not.

    There IS such a thing as market *corruption*, however, which impairs the ability of markets to function. Health care is an example of a market badly corrupted by government interventions; education even more so.

  21. Chet of New Jersey says:

    Leave my health care alone. I am quite capable of making my own decisions, I don’t need the “holier than thou” Democratic Liberal Socialists, doing it for me. The 3 three billion dollar cash for clunkers program was supposed to last thru October,it lasted just over three weeks. What do you think will happen to Obamacares’ estimate of 1 trillion dollars over 10 years for his health care program?? Obama looks to NJ Gov. John Corzine as his economic example as what do do. NJ has raised every tax we have and introduced hundereds of others. Our deficit next year will be over 10 billion dollars. We are near bankruptcy. Obamacare will do the same for the country. LEAVE MY HEALTH CARE ALONE.

  22. John from Tucson says:

    Good post, John, regarding the front on Medicare Advantage. But there are other fronts in this ‘war on Medicare’ that are reflected in HR 3200. For example penalizing hospitals that admit Medicare patients at “excessive readmission rates,” eliminating “updates” to Medicare payment rates for home health care, including Medicare post-acute care among the squeezed “bundled services,” pilot studies of payment schemes that will discourage referrals to specialists – the list goes on and on. The CBO has evaluated all of these options in its excellent December, 2008 publication and for each option CBO has listed downsides – possible consequences that could hurt Public Health. The fact is we are doing a vast social experiment to the likely detriment of Medicare patients. It is hard to imagine a Republican President getting away with taking such risks without serious challenge. It is time we did the same for this Democratic President.

    Wake up folks – this is not theory or dogma – it’s flesh and blood.

  23. Quentin Ledford, Benefits Consultant says:

    I have heard the rhetoric that the new plan will be just like Medicare, but for everybody. In researching this matter, it is inconceivable that this can possibly be feasible in any way.

    Anyone that supports a single payer health system does not realize what they are backing. Anyone who chooses to believes either the news media or the government without researching the actual facts from all sides of the issues is setting themselves up to be proven both a patsies and fools of the powers that be!

    Currently we hear that the administration has been cutting ‘deals’ with Big Pharma, United Healthcare, and the AMA. In observing these ‘sell-out’ arrangements over the years, the one thing I am sure of is this…

    None of these ‘deals’ are pursued with ANY intent of pursuing the interests of the taxpaying citizenry of the U.S. It’s all about control and power.

    Medicare is currently 75% subsidized, and most people still need to obtain a Supplement to assure proper protection. Publicized abuses aside, Medicare does do some things right.

    Medicare has forced the insurance industry to provide simple, easy to understand options (at least until several years ago with the recent introduction with the PFFS, so-called ‘advantage’ programs which really is a re-intro of the Medicare HMO plus Choice programs). As I understand it, although the plans are subsidized through social security deductions and Medicare, any overruns in their claims costs is borne by the commercial insurance carriers.

    I do believe that most people generally hate insurance companies. Some of us even have reason to loath certain insurance companies. However, in considering the advantages and the disadvantages, the only system that could possibly be more reprehensible is a government run monopoly.

    Under the proposed legislation EVERYONE (Congress exempted of course!) will get the healthcare equivalent of a Yugo. However, for those folks that DO pay taxes, MANY will be forced to pay for the equivalent of a Lamborghini – BUT – they will still only be delivered a Yugo.

    (QUESTION: Was ANYBODY really happy driving a Yugo?)

    The government of these United States was established on the premise that its purpose, first and foremost, was to serve and protect the people.

    The primary problem with heath care financing issue is that for too many years, legislators have been intent of playing every party in this debate against one another in the name of their own agendas, campaign financing in particular. Catering to the pressures of lobbyists, of special interest groups, and of partisan demands has compelled most legislators to seek the protection and the power of their party. In the process, the interests and the welfare of the American people have been totally jettisoned.

    It is essential, when considering the issue of healthcare financing that all facets of the system be carefully considered. Each respective problem has its own issues. It would not be wise to ‘throw the baby out with the bathwater’ as the saying goes and simply destroy everything in hopes that something better could actually emerge as a result.

    It is imperative to preserve every virtue while diligently working to mitigate every fault. For this purpose, it would be wise to seek out counselors with knowledge, insight, and experience from all sectors of the system to work together for solutions. It is also wise to permit those of other systems to express their experiences and frustrations so as to avoid the problems of others. Often, one finds their own problems are blessings in comparison.

    One of the most reprehensible aspects of the abandonment by the government of citizenry interests is in its failure to protect the people.

    IN THE AREA OF HEALTHCARE FINANCING
    What Government has done???
    1. Government has permitted certain insurance companies to market plans which are deliberately designed to fatten the coffers of the ‘so-called’ insurer and to defraud the unsuspecting public. Such policies limit the liability of the insurers while place UNLIMITED liability on the insured. [Indeed when legislation has been presented that would at the very least force these companies to clearly DISCLOSE that their plans provide only LIMITED COVERAGE, the insurance carriers (most frequently companies like HealthMarkets) actually PAY the legislators NOT to vote on the legislation (as happened recently in California).]

    2. Created a complex framework of both Federal and State legislation (of which some is even contradictory) that is frequently designed to cater to special interest groups, lobbies, and political affiliates.

    3. Has created a system whereby citizens…
    a) Often have no idea what they are buying when they purchase health insurance.
    b) Increasingly pay more as they grow older.
    c) who, through no fault of their own, are suffering from unfortunate maladies which the insurers deem too costly to cover.

    4. Has created a system whereby the greatest beneficiaries are…
    a) The Pharmaceutical industry
    b) The Mega-Hospital conglomerates and the AMA (both of which are in collusion). For decades the AMA has restricted the number of persons permitted to enter Medical School in order to LIMIT the available SUPPLY of physicians so that service costs will continue to escalate.) In addition, these are colluding to force the private practicing doctor out of business (which is why doctors have seen their pay reduced year after year for the past 20 years) and into a model whereby every physician will become an EMPLOYEE of a mega-hospital conglomerate (talk about restricting a physicians ability to act in behalf of their patient). Just as insurance companies often try not to cover medical services and procedures to keep from paying claims, hospitals frequently try to cut back on staff and services in order to increase profit.)
    c) Unscrupulous (but not all) insurance carriers. Over the years I have had and fought through many claims, and I can say UNEQUIVOCABLY that not all insurance carriers are ethical. Although, it appears that most insurance companies will generally honor their contracts, we, the citizens frequently get kicked in their teeth by not knowing, or understanding what rights the law does give us and what rights the insurance contract takes from us. As an insurance buyer I have to trust my agent to guide me properly has I often have no idea what the insurance company covers, or how they cover it, nor of any limitations inherent in my coverage.

    5. Government has frequently enacted legislation that limits BOTH insurance industry competition AND consumer choice.

    6. Government has designed a system which ignores the primary premise of insurance, ‘the law of large numbers’. This mathematical law of risk management basically states that the larger the number of homogenous units the more predictable the incidence of loss. This is why older individuals pay through the nose even to obtain catastrophic coverage. Roughly half of all uninsured persons in this country are under age 35 and ARE insurable, they simply do not see a need to buy and PAY for something they’re not statistically very likely to need. For an equitable system to work, EVERYONE must participate. Under the proposed legislation this law will ALSO be violated and will force private insurance out of business. Since existing private plans will be ‘grandfathered’ and insurance companies will not be permitted to write any new policies, insurance carriers will be forced into a death spiral whereby they are longer collecting enough premiums to cover their plan losses. Rhetoric aside, under the proposed arrangement, the government is deliberately intent on shutting down the health insurance industry.

    What has Government NOT done???
    1. Government has not even discussed addressing the factors which ARE really driving up the cost of healthcare.

    2. Government has not considered ANYTHING that might make obtaining coverage easier for the consumer. People should be able to purchase their health insurance with the confidence of knowing WHAT they are buying. Insurers are famous for playing ‘shell games’ with their benefits so that people will purchase what they perceive will meet their needs, but in fact, that which is really designed to be most profitable for the insurance company.

    3. Government has not considered ANY mechanisms which would force all insurance companies to play on the same field under the same rules.

    Can the problems be addressed? Yes.

    Will they? Not likely.

    Unless the majority of the people unite and draft their OWN legislation in accord with common sense, sound reasoning, and devoid of special interests, and actually force their legislators (regardless of party affiliation) to implement it, it can’t possibly happen. The issues will be banned to proposed legislation purgatory along with the ‘Fair Tax’ and any other reasonable concept that would simplify our lives.

    I challenge the legislators to prove me wrong!

  24. Joe says:

    To Uwe Reinhart,

    I cannot possibly think of anything more selfish than your attitutde that we should simply place the burden for paying for your healthcare today on future generations that don’t even exist yet. Borrowing from the future to pay for today is wrong because it lowers the standard of living for those yet to come. Most of the problems that exist today are the result of us having to pay off the debts incurred by past generations. A huge portion of the budgets of governments at all levels goes toward the servicing of old debt. If this debt were eliminated, our taxes could be used for things we actually need or we could even get a tax cut. Warren Buffett said recently that we must stop all this borrowing and deficit spending before we become a banana republic.

  25. Nancy says:

    Joe, I don’t think Uwe intended for us to take his recommendation seriously. John needs to put the satire alert next to some of his comments.

  26. karen h. thompson says:

    posting from quentin ledford was fascinating to
    read and quite clear and to the point. i agree,
    getting any live body in the House or Senate to
    even acknowledge such a reasonable alternative
    would be a miracle, but we can wish, can’t we!!
    my grandchildren will pay for the wasteful lapses
    of the last several presidents for most of their
    adult lives and will probably never forget the
    mess left them by their parents/grandparents.

  27. [...] on the tremendous success of pilot programs in which the Medicaid homebound disabled are able to manage their own health care dollars (think: HSAs for the chronically ill). What about managed care? Here are the study’s principal [...]

  28. [...] previously reported on the relative performance of eight major MA plans vis-a-vis conventional Medicare. Now there is new data for all MA plans versus all standard Medicare in two states: California and [...]

  29. [...] Reformers have targeted these for “savings” to help fund expansions in coverage. At least one in five seniors, most of them with low or moderate income, chose to enroll in such a plan (Karl Rove, Wall St J 8/27/09 ; John Goodman, Health Alert 8/24/09). [...]

  30. Joe B says:

    It’s amazing how politicians spin the web of lies. As the article points out Medicare Advantage overfunding is primarily borne in rural markets, where we probably need to spend a little more so that plans will enter those markets. In urban areas such as Philadelphia, Aetna Medicare actually provides benefits and services that I understand are on par with the costs Medicare.

    It’s a shame what has already been done to MA and of course seniors enrolled in these plans. About 50% or more of these plans have been eliminated in rural areas for 2010. Our government thinks this is good for seniors? Go Figure.

  31. [...] reason to be hopeful. The cuts in Medicare Advantage subsidies, for example, appear to be based on special interest politics alone, not on any lofty [...]

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