Aging Solutions is apolitical but we also like to keep an eye on things that may affect the well-being of our clients, potential clients, and their families. Since the events of Nov. 8, 2016, many health policy experts worry that long-dormant plans to privatize Medicare may come back into vogue, now that the majority political party will control two of the three branches of our government on Jan. 20. In today’s New York Times, Robert Pear writes that
House Republicans say they will move forward on a years-old effort to shift Medicare away from its open-ended commitment to pay for medical services and toward a fixed government contribution for each beneficiary….For nearly six years, Speaker Paul D. Ryan has championed the new approach, denounced by Democrats as “voucherizing” Medicare. Representative Tom Price of Georgia, the House Budget Committee chairman and a leading candidate to be Mr. Trump’s secretary of health and human services, has also embraced the idea, known as premium support….
As [Ryan] envisions it, Medicare beneficiaries would buy health insurance from one of a number of competing plans. The traditional fee-for-service Medicare program would compete directly with plans offered by private insurers like Humana, UnitedHealth Group and Blue Cross Blue Shield.
The federal government would contribute the same basic amount toward coverage of each beneficiary in a region. Those who choose more costly options would generally have to pay higher premiums; those who choose plans that cost less than the federal contribution could receive rebates or extra benefits.
Supporters say this approach could save money by stimulating greater price competition among insurers, who would offer plans with lower premiums to attract customers.
Democrats say that premium support would privatize Medicare, replacing the current government guarantee with skimpy vouchers — “coupon care for seniors.” The fear is that the healthiest seniors would choose private insurance, lured by offers of free health club memberships and other wellness programs, leaving traditional Medicare with sicker, more expensive patients and higher premiums.
NYT columnist Paul Krugman, not a health-insurance expert but a Nobel laureate in economics just the same, sees a dark future if that happens:
It has been obvious for a long time that Medicare is actually more efficient than private insurance, mainly because it doesn’t spend large sums on overhead and marketing, and, of course, it needn’t make room for profits.
What’s not widely known is that the cost-saving measures included in the Affordable Care Act, a.k.a. Obamacare, have been remarkably successful in their efforts to “bend the curve” — to rein in the long-term rise in Medicare expenses. In fact, since 2010 Medicare outlays per beneficiary have risen only 1.4 percent a year, less than the inflation rate. This success is one main reason long-term budget projections have dramatically improved.
So why try to destroy this successful program, which is in important respects doing better than ever? The main answer, from the point of view of people like Mr. Ryan, is probably that Medicare is in the cross hairs precisely because of its success: It would be very helpful for opponents of government to do away with a program that clearly demonstrates the power of government to improve people’s lives.
Here at Aging Solutions, we can’t predict the future, but we have been around long enough to witness the last time that Congress tried messing with Medicare. In the late 1980s, Congress passed a modification to Medicare called “Catastrophic Care.”