This past week much has been said and written about President Obama’s plan for Medicare, under Obamacare, and, Paul Ryan’s (R. Wi.) plan for Medicare outlined in his proposed budget. Rather than demagogue one or the other (I suspect we’ve all had enough of that at the moment), I thought I’d describe both plans, and let you decide.
Mr. Ryan’s plan (for anyone who becomes eligible for Medicare in 2021 or later), would create insurance exchanges where private insurers would offer coverage to seniors. The plans would operate much like today’s Medicare Advantage…seniors pick the plan they like, with the doctors they like, etc., and Medicare would provide “premium support” to the company of the senior’s choosing. The plans would not be able to exclude pre-existing conditions, and they would be guaranteed renewable. The initial payment from Medicare (which would increase annually) would be $15,000, and, higher, if need be, to help lower-income seniors.
Mr. Obama’s plan to lower Medicare costs is to create a 15 member Independent Payment Advisory Board. This board will be charged with the task of controlling Medicare spending. The members will be appointed by the President, confirmed by the Senate, but, after that, the Board will not be subject to Congressional review. All Medicare decisions will be made by this Board.
If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 sages sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before…
(Ok, that last sentence may have been a bit “argumentative”, so, just ignore it when making your decision.)
Which plan do you think will provide the best care?
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So Ryan-care will have a voucher system. Why $15,000 instead of $50,000? Who is so wise to make that decision, or is the $15,000 a number to make other numbers come out "right'?
Here is what we do know. In 2009 Medicare paid an average $11,743 per Medicare recipient. And, although currently Medicare Part A (hospital) is "free", recipients on Medicare must pay for Medicare Part B (doctors) and Medicare Part D (drugs) via a deduction from their Social Security benefits. Those annual payments can well exceed $3000.
So, it seems to me that $15,000 will more than cover it, and, if it doesn't "big" insurance is on the hook, not the taxpayers.
Gee! It sounds like someone (the inimitable Ryan) actually put some thought into this!
And his plan minimizes the decision making by government goons on some panel filled with political supporters. Good for him!
I'm all for freedom of choice on this one. And if congress allows insurance sales to take place across state lines, we could see a real competitive market open up for medicare recipients under Ryan's plan. That's good for the recipients as well as the free market.
With Obama's plan, we all know the "Independent Payment Advisory Board" won't be independent. That's destined to become a political tool — much like the Supreme Court has become.
Dear SOS, a few weeks ago you wrote about a relative of yours who "does not fall in the average" category as defined by a group of doctors. On the issue of vouchers above, you are basing the adequacy of the $15,000 voucher on average costs. We both know that there is no average sick person. As for the "big" insurance being on the hook, dream on…..
SOS, I usually like and look forward to your posts, but this is hardly an unbiased analysis. "Big" insurance is on the hook? and we are to assume they're just going to swallow all of these costs? come on now.
And the average ($11,743)you use is wildly skewed by the fact that so much more than that is spent on end of life care. Some studies propose that 30% of all medicare costs are spent on end of life (last year) care (http://www.thirteen.org/bid/sb-howmuch.html). Ryan has done his homework, and his proposal is serious and worth discussing, but it is quite likely that a voucher system will not help to reign in costs. If a private insurer is going to be "on the hook" and they know that every senior starts shopping with a voucher (of whatever amount) in his pocket, might that insurer figure the voucher as a given, and just mark up the policy (out of pocket costs) from there?
Costs will continue to rise unless Congress forces insurance co. to sell across state lines, pass torte reform and stop ridiculous mandates. However, Paul Ryan did what he could with Medicare and our system as it exists. The above need to be handled separately so it is in the light of day. Creating another 15 member advisory board is so ludicrous, it makes my stomach turn.
REAL reform is the only answer. I don't think it is coming from Washington though.
I’ll take door #1. Thanks SOS