Truely Bipartisan Health Care Reform

Unlike Obamacare, the Wyden-Ryan plan is truely a bipartisan effort, that does not dump any grandma's off a cliff. From Senator Wyden's website:

Bipartisan Health Options

U.S. Senator Ron Wyden (D-OR) and U.S. Representative Paul Ryan (R-WI) introduced a new proposal that represents a major advance in the effort to build a more secure future for the millions of seniors who rely on Medicare.

The new report from Sen. Wyden and Rep. Ryan, titled “Guaranteed Choices to Strengthen Medicare and Health Security for All: Bipartisan Options for the Future,” outlines a detailed proposal to offer expanded health care choices for older Americans while preserving a traditional Medicare plan as an option. The report also proposes to give Americans under 65 more power and freedom to purchase insurance products they can carry with them into retirement.

[...]

Why do you say Wyden-Ryan won’t “end Medicare as we know it?”  Won’t allowing seniors to choose private health plans be a major change?

First of all, the hallmark of Medicare is not its structure but its guarantee that every American will have high quality health benefits as they get older.  And, as has been mentioned before, “Medicare as we know it” will end in 2022 if nothing is done to change its current course.  Wyden-Ryan takes action to ensure the Guarantee is preserved.

Contrary to what many believe, every Medicare beneficiary does not currently get their Medicare from the government-administered Medicare insurance plan.  Many seniors are already getting their Medicare from private health insurance plans.  In Oregon, for example, 56 percent of seniors currently get all or some of their health coverage from a private plan. (15 percent of Oregon seniors purchase private Medigap policies to supplement their traditional Medicare, while 41 percent of Oregon's Medicare beneficiaries are enrolled in private health insurance plans through Medicare Advantage.)Wyden-Ryan would allow seniors to continue to choose between the traditional government-administrated Medicare option and privately administered plans.  But instead of maintaining separate programs, Wyden would make those private plans more robust and accountable by forcing them to – for the first time – compete directly with traditional Medicare.

Every private plan that participates in the program would be required to offer health benefits that are AT LEAST as comprehensive as those offered by traditional Medicare and premium support payments would be pegged to the actual cost of health care in a given area, determined by an annual competitive bidding process.  Therefore, every senior – whether they get their health insurance from a private plan or the government – will be guaranteed to have the high quality health benefits that has long been Medicare’s promise.

How will Wyden-Ryan ensure that private insurance companies don’t take advantage of seniors?

All participating private plans will be required to offer benefits that are at least as comprehensive as traditional Medicare, with such standards enforced by the Centers for Medicare and Medicaid Services.  Any plan that is found taking advantage of seniors or providing inadequate care will be kicked out of the system. Cherry picking healthier seniors will be made unprofitable by robust risk-adjustment, and the Medicare Exchange where plans will seek to offer coverage to seniors, will be policed by the federal government.

It is worth noting that the Medigap law Senator Wyden authored to regulate the private market for Medicare’s supplemental insurance market has been protecting seniors from unscrupulous insurance practices for more than two decades.

How will Wyden-Ryan guarantee that health care will be affordable for all seniors? Isn’t it just a voucher?

A voucher suggests giving seniors a fixed amount of money indexed by a set rate of growth that may/may not have anything to do with the actual growth of health insurance costs.  Vouchers would not guarantee that seniors could afford health coverage.  (This is what the last year’s House Republican Budget did.)

Wyden-Ryan does not give seniors vouchers.  Instead Wyden-Ryan would guarantee that seniors can afford their health insurance premiums by giving seniors premium support payments, the amount of which will be determined by the actual cost of insurance premiums each year.

It would do this through a competitive bidding process in which private insurance plans, wanting to cover Medicare beneficiaries, would submit their benefit packages and the amount they will charge in premiums for the upcoming year.  The amount seniors receive in premium support will be determined by either the cost of traditional Medicare premiums or the second cheapest private plan available on the exchange (whichever is cheaper.)  This process will take place each year, so if health care costs – and therefore insurance premiums -- grow dramatically from one year to the next, so will the premiums support payments that seniors get to pay for them – thus ensuring that every senior can afford their health insurance premiums.

And again, every private plan in the Medicare exchange will be required to offer benefits that are at least as comprehensive as those offered by traditional Medicare. [...]

It's not a "Radical Plan to Kill Medicare". It actually builds on the Medicare options that already exist, in a way that will both control costs and offer more choices. And it's a plan we can actually afford!

It's definitely worth reading the whole thing. It's pretty much the same Medicare plan that Paul Ryan is advocating on his website.

In an interview for Human Events, Ryan explains the history of bipartisan support for the reforms he's advocating.

   

Medicare's future, for those under age 55

People like me:

What no one is telling you about Medicare

[...] Cuts are inevitable. The real battle is over who bears the cost.

This spring the House passed a budget resolution designed by Paul Ryan (R-Wis.) that radically overhauls Medicare. The plan is unlikely to become law in its present form, but the ideas behind it will play a pivotal role in shaping Medicare reform.

Here's how the system would work: If you are younger than 55 today, your Medicare insurance would be replaced with a fixed voucher, or what Ryan calls "premium support," which you'd use to buy a private health insurance plan. In 2022 a typical 65-year-old would get about $8,000. Plans would have to take all comers, regardless of their health, and would charge the same price to people of the same age. Your premium support would go up as you got older or sicker. Low-income seniors would get extra cash.

You get skin in the game...

Premium support attempts to fight what economists call the moral hazard problem. If your insurance picks up a lot of your medical bills, you don't have much incentive to be a picky consumer. Your doctor prescribes, you comply. Even if there might be a cheaper way to get better results.

"Medicare has inherent in it inflationary pressures that push costs up very high, very rapidly," says Jim Capretta, a former George W. Bush administration budget official now at a think tank called the Ethics and Public Policy Center.

Ryan's approach would force you to make choices about what to do with your $8,000. You could pay a lot on top of that to get a generous plan or buy a cheap one that lets you see doctors within an HMO network and leaves you with a high deductible.

How much would that system reduce the cost of care? The answer is hotly contested. Some people would spend less but might also forgo care they really needed, says Juliette Cubanski, a Medicare policy analyst at the Kaiser Family Foundation.

Gail Wilensky, who ran the Medicare system during the George H.W. Bush administration, thinks a market dynamic will help a lot, but cautions that much spending is concentrated on the very sick, whose costs have blown past any reasonable deductible. "The serious spenders are always going to be using someone else's money," she says.

Shifting to private plans also has costs: Insurers have to charge enough to pay for administration and marketing while clearing a profit. The CBO, which concedes a lot of uncertainty about how vouchers would change the market, believes total costs would go up. It estimates that private plans will be so expensive that in 2022 a typical 65-year-old would spend twice as much to get the same benefits Medicare provides. That's an extra $6,240 to you.

...but a shrinking benefit.

The voucher is also a tool to cap government spending on health care. In 2022, once the feds send you $8,000, they're done paying for the year. "What we do in Medicare today is say, 'We're going to set in motion an open-ended entitlement, and the government's going to subsidize whatever it takes to provide that package,'" says Capretta. "The Ryan budget says, 'Why don't we build a budget that sets a level of taxation that we can afford, and here's the level of entitlement spending that will fit within that?'"

The idea of imposing a limit isn't inherently conservative or liberal. Most other rich countries, with their universal insurance, set a health care budget; the reform law signed by President Obama last year tries to cap spending too. But Ryan's cap is remarkably austere.

Social Security checks to rise 3.6%

The value of his voucher would grow at the level of inflation, which is almost always less than the growth of the economy. But no industrial country keeps health spending growth below GDP growth.

"It's implausible to think costs would inflate at that level," says Boston University health economist Austin Frakt. If so, then over time premium support would buy you less and less insurance -- and less and less care.

There are countless ways to moderate the severity of the Ryan plan. Wilensky suggests a cap that grows a little faster than GDP, for instance. What's most important about the proposal, though, is not the specific growth target; it's the philosophical stake in the ground planted about how much of the cost of paying for health care should be shared collectively, through taxes, and how much should be a responsibility for you, the individual, to bear. The Ryan plan says clearly: more on you. [...]

Hmmm. I do believe that costs have gotten so far out of control, because once the "government" is paying, instead of an individual, then nobody cares about the costs or questions what is being charged and why. But if it goes too far the other way, then people under 55 might be getting a lot less, even though they payed into Medicare the same as people over 55.

Is there a happy medium, a balance, somewhere? One will have to be found, because it sure can't continue like it is; unsustainable.

It's quite a long article. From PART 2:

Medicare: How much more will they cut?

For all the chatter about how politicians have to buckle down and get serious about reining in Medicare, you might have missed this development: Last year's health reform bill cut $500 billion out of two big Medicare programs over a decade, while increasing the number of high-income retirees who have to pay larger Part B premiums.

"It's as if that never happened," says Jonathan Oberlander, a professor of health policy at the University of North Carolina.

To be sure, health reform wasn't a let's-shrink-the-government project. The reason Democrats got their hands grimy and made cuts to the program was to help pay for a new health care entitlement, making it easier for Americans under 65 to buy their own insurance. Still, the new law shows that liberal lawmakers will slice into Medicare if needed, and offers a glimpse into how they'll try to do it.

The central idea behind the maze of cost-control provisions health reform establishes: Focus on trimming fat before reducing benefits. One approach is to reduce the power of providers to drive spending. When your doctor says you need this test or that surgery, you tend to take his word for it, even if you have hefty out-of-pocket costs. Hospitals, meanwhile, have consolidated in recent decades, giving them considerable price-setting power.

Results: There's substantial evidence that doctors at times over-treat, and you overpay for just about everything. "For a long hospital stay we pay $18,000, vs. $4,000 or $5,000 in Germany or Japan," says Gerard Anderson, director of the Center.

[...]

In coming months one idea you'll hear debated a lot is imposing a numerical cap on future government spending or revenue -- say, 21% of GDP or even 18%.

No matter what the specific numbers proposed are, growing health care costs are on a path to push the size of government well beyond those limits. If that happens, Medicare would go from long-term challenge to immediate crisis. Big changes would have to happen fast. Budget hawks ought to be specific about what those changes will be.

All you can know for sure now: This country, not just the government, but each of us as individuals -- is facing a monster of a doctor's bill, and there's no easy way to get around paying it.

Yikes.
     

Who adds passengers to a sinking boat?

The Democrat controlled US senate, apparently:

Senators Strike Health Deal

WASHINGTON -- Senior Senate Democrats reached tentative agreement Tuesday night to abandon the government-run insurance plan in their health-overhaul bill and to expand Medicare coverage to some people ages 55 to 64, clearing the most significant hurdle so far in getting a bill that can pass Congress.

[...]

Sen. John Barrasso (R., Wyo.) said expanding Medicare "is putting more people in a boat that's already sinking."

The American Medical Association said it opposes expanding Medicare because doctors face steep pay cuts under the program and many Medicare patients are struggling to find a doctor. Hospitals also said expanding Medicare and Medicaid is a bad idea.

"We want coverage -- in the worst way -- expanded, but both of these means are problematic for hospitals and physicians," said Chip Kahn, president of the Federation of American Hospitals, which lobbies on behalf of for-profit hospitals. "It's going to make it difficult to make it work."

After more than a week of debate on the Senate floor, Mr. Reid was working hard to unify his 60-member caucus, which includes 58 Democrats and two independents. A handful of moderate Democrats as well as Sen. Joseph Lieberman, the Connecticut independent, signaled concerns with the government-run plan, threatening to derail the broader bill. [...]

How can they even talk about expanding a failing program, without fixing the program first? Unless it's their intention to create even more chaos when Medicare fails. Are they deliberately creating an even larger crisis, so they can then claim "emergency" powers and push through something even worse?

     

Pelosi's Bill: "The worst piece of post-New Deal legislation ever introduced"

The Worst Bill Ever
Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.

Speaker Nancy Pelosi has reportedly told fellow Democrats that she's prepared to lose seats in 2010 if that's what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a "critical milestone," may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan "reform" and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be "universal coverage." The result will be destructive on every level—for the health-care system, for the country's fiscal condition, and ultimately for American freedom and prosperity. [...]

The rest of the article explains the how and why of it. It would be the end of health care as we've known it, and would necessarily create rationing and becomes unsustainable. Let's not go there.
     

The "Public Option"; what it really means

The Public Option Deception

[...] more than one critic has wondered aloud why Democrats don’t just give up on the public option – which is opposed by every Republican – in order to reach a more bipartisan outcome. What exactly is so important about the public option anyway? And why do Democrats in particular seem so wedded to the idea?

There is a simple answer to these questions, but it’s an answer you’ve likely not heard from any institution in the mainstream media. The truth is that the public plan is a carefully devised scheme, a sneaky strategy, to deceive American voters. It’s a political marketing ploy designed to move the nation to a single-payer system – like the one in Canada – over the next decade. The public option is the Trojan horse. On the outside it’s all about “choice and competition”, but once it has been dragged within the walls of American medicine it’s true nature will become evident. By that time, it’ll be too late.

You want proof? We’ve got plenty. [...]

And there is plenty of proof. But what good is it, if people don't hear about it?

The latest strategy the Dems are considering, to push it through, is to change the name, to Medicare for everyone, because "Medicare" is a familiar word that doesn't scare people. The Dems don't care what the name of their Trojan Horse is, as long as they can sneak it in.

     

Democrats to slash Medicare?

How is this going to make things better?

The 'kill granny' bill

AS the health-reform bills move through Congress, the prognosis for Medicare pa tients gets worse and worse.

The Senate Finance Committee bill (generally called the Baucus bill, after Chairman Max Baucus) robs the elderly to cover the uninsured -- like snatching purses from little old ladies. The House bills already cut future funding for Medicare by $500 billion over the next decade. The Baucus bill would slash a similar amount, just when 30 percent more people enter the program as baby boomers turn 65.

The Baucus bill also puts new limits on what doctors can do for patients in Medicare:

* A "race to the bottom" provision (p. 102 of the revised chairman's mark) would take effect each year for the next five years. The provision penalizes doctors who end up in the 90th percentile or above on the cost of what they use to treat their patients, compared with national averages. The intent is to force down the cost of care, year by year. Yet this blunt instrument can't determine which care is actually wasteful -- it will punish doctors for treating high cost patients with complex conditions. Inevitably, it will lower the quality of care.

* Even more devastating is the amendment Sen. Maria Cantwell (D-Wash.) got inserted into the bill (revised chairman's mark, pp. 102-3). It gives the Secretary of Health and Human Services the power to define quality, cost-effective care for each medical condition and penalize doctors who spend more on their patients.

The law establishing Medicare in 1965 barred the federal government from interfering in doctors' treatment decisions. Slowly, Medicare regulations have begun unraveling that protection. Now the Cantwell amendment finishes the job.

This is the most extreme change to Medicare ever. Dr. David McKalip, a Florida neurosurgeon and a board member of the Florida Medical Association, predicts: "The only doctors left in Medicare will be those willing to ration care and practice cookbook medicine." [...]

Is this the "Change we can believe in?".
     

Even in 2002 the Congressional Budget Office saw the unsustainable path we're following

And everyone in Washington knew. Maynard at TammyBruce.com had this recent post, about where the Congressional Budget Office said we are headed, even before the economic crisis kicked in:

Things to Come

[...] Take a look at this report from the Congressional Budget Office, "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075". This report was prepared in 2002, before the budget went to hell. So this is a projection from a better day. Take it as an optimistic projection. (Fox just issued a report noting that Social Security and Medicare would go broke several years sooner than previously expected, and that many trillions of dollars would be needed to close the gap. Again, this is independent of the recent spending binges.)

Here's the key chart, based on spending patterns and demographics as of the good old days of 2002:

Federal outlays as a percentage of GDP
Two notes: First, overall expenses are rising steadily and dramatically from approximately now until the end of the graph in 2075, where it's at 40% of GDP and rising.

Second, the cause of the rise is Social Security, Medicare, Medicaid, and interest on the rising debt. Demographics will catch up with us, pushing claims through the roof.

In other words, the Federal Government has long been on autopilot to transform itself into a machine whose major function is to seize wealth from party "A" and hand it over to party "B". (And, with respect to servicing the national debt, our government's fundamental job will be to suck money out of our children's pockets and pay it to China.) None of the rise has to do with defense or infrastructure maintenance or any of what we would regard as legitimate functions of government. In fact, real government functions will get crowded out by the mandatory giveaway programs.

This other chart is also important. It's the projected graph of Federal income and outgo. As you see, the anticipated expenses rise but the income does not. That's because the taxation levels were projected to be stable. So the deficit heads skywards.

Federal revenues versus outlays as a percentage of GDP

So we were heading for a big problem as of 2002. And everyone in Washington knew it.

Then along came George Bush and Barack Obama, evil twins that decided the Federal Government hadn't made enough commitments. So they both grew the government and made more big, unfunded promises and are spending even more money.

On the revenue side, George Bush cut taxes for everyone. And Barack Obama promised to cut taxes for 95% of the people.

In other words, with disaster looming on the horizon, our political leaders have aggressively chosen the course that will magnify the problem and cause it to strike sooner.

How can this be happening? Have we gone mad? Am I saying anything here that is either unimportant or less than obvious?

Will we change course?

So where does this all lead? Obviously to some sort of unpleasantness on a grand scale. [...]

Maynard reluctantly speculates about where all this might go, and what might be done about it. Or not. I've done speculation of my own about what sort of "unpleasantness" this could be leading to, such as the collapse of US currency, or a growing vulnerability due to increasing military weakness and poor technology decisions without safeguards.

I hate all that depressing stuff. On the whole, I prefer to cultivate a positive outlook, and work toward improvement. But to be balanced, you also have to be aware of dangerous pitfalls, so you can avoid them. Sometimes ringing the alarm bell is enough to keep the ship from hitting an iceberg. Forewarned is forearmed, for those who are paying attention.

I don't know what is going to happen, but it does seem obvious that we are going down a path that is unsustainable. Something, somewhere, sometime, has gotta give, it just can't continue on like this.


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Is Obama compounding Bush's mistakes?

Can the Dow Jones Industrial Average and Age Demographics foretell Economic Depression?