This Morning on MTP, David Axelrod mentioned that there are "Progressive Solutions" out there to the "Medicare Problem." But then he refused to elaborate, within the 15-second timeslot that referee Gregory had just granted him.
Well ... that got me thinking ...
What are the Progressive Solutions to the "Medicare Problem"?
First off what IS the "Medicare Problem"?
by Chris Fleming, healthaffairs.org -- June 12, 2012
New estimates released today from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) project that aggregate health care spending in the United States will grow at an average annual rate of 5.7 percent for 2011 through 2021, or 0.9 percentage point faster than the expected growth in the gross domestic product (GDP). The health care share of GDP by 2021 is projected to rise to 19.6 percent, from its 2010 level of 17.9 percent.
The major effects of the Affordable Care Act on overall spending levels are expected to be felt most acutely in 2014. The coverage expansions associated with the Affordable Care Act for Medicaid and private health insurance are expected to increase the growth rate for health spending to 7.4 percent in 2014, with notable increases in spending on physician services and prescription drugs by the newly insured. Throughout the latter half of the projection period, incomes are expected to be higher, and a large number of baby boomers are anticipated to be receiving coverage under Medicare. Among others, these factors are expected to drive health spending up around 2 percentage points faster than overall economic growth by 2020, consistent with trends in the United States for about the past thirty years.
A measly "2 percentage points faster than overall economic growth"
-- that's some problem.
There must be an extra 2% in spare change, that they can "shake out of the couch cushions" somewhere.
Is raising the Eligibility Age for Medicare participants, a good way to bring that 2% rate down, in order to bring down the cost of effective care?
by Rick Ungar, Contributor, forbes.com -- 12/03/2012
As the GOP pursues its 'War on Entitlements' as a part of the fiscal cliff ballet, the notion of raising the age for entering Medicare has been gaining steam as a focal point of reform for the financially stressed government health care system.
According to the Congressional Budget Office, immediately increasing the Medicare age to 67 would save about 5% in the annual Medicare budget -- not an insignificant amount of money. Such a move would also have a positive impact on general tax revenues as more 65 and 66 year olds would remain in the work force in the effort to protect their company-provided healthcare benefits or, if they are self-employed, continue earning enough money to pay for their private health insurance premiums for an additional two years.
But then comes the bad news:
With any significant savings to a large government program, there is always a counter-balancing cost to someone. In this case, the cost of saving Medicare that annual 5 percent would reverberate throughout the entire healthcare system in such as way as to negatively impact on virtually everyone with a health insurance policy.
Why? [...] -- we are removing the healthiest people from the Medicare insurance equation.
It seems like "raising the Eligibility Age for Medicare" is more a gimmick -- an accounting trick -- than a solution.
What are people supposed to do for those extra 2 years, those without private insurance, those with taxing physical jobs -- just get extra-ill?
Perhaps we should figure out what are the real drivers of that 2% care-cost growth rates are first, before we try to "fix the problem" ...
Medicare -- ourfuture.org
Medicare proves the success of progressive health care policy. Before Medicare, approximately half of America’s seniors lacked health insurance; today, virtually everyone over age 65 is covered by Medicare. [Kaiser Family Foundation] Because Medicare is a health-care-for-all plan for the elderly, it allows the government to pool risk and lower costs. [...]
Conservatives are wrong about the challenges facing Medicare. Conservatives argue that rising enrollment in Medicare is driving up costs. However, the Congressional Budget Office has reported that “the aging of the population…accounts for only a modest fraction of the growth” in Medicare costs. The main factor is the growth of health care costs -- the extent to which the increase in health care costs has exceeded the growth of the economy.
Conservative attempts to privatize Medicare have been disastrous. President Bush’s Medicare prescription drug plan forced seniors to deal with hundreds of private insurers and prohibited the government from negotiating lower drug prices. The plan’s “doughnut hole” saddled 3.4 million Medicare beneficiaries with high drug costs. [ Kaiser Family Foundation] [...]
"The main factor is the growth of health care costs" and one of the main cost factors there is "prohibition against the government from negotiating lower drug prices"
ie. Pharmaceutical profit margins are still being protected.
SO, an out of control driver for profit -- non-negotiable drug prices -- just might a contributing factor to the outsized growth in the cost of Health Care. It's not like we can "shop around" for the best price, when we are ill, and in urgent need of care.
Certainly there must be some 2% pocket change lying around in those cushions?
Aaah, what other "corporate interests" are making a quick-buck on our unavoidable old-age conditions?
Well I remember some hot debates, on how Health Insurers typically
plot plan to increase their profit margin, often at the expense and/or disregard of our own individual health outcomes.
A big part of the Affordable Care Act was designed to deal with and cap that discrepancy.
by Jason Shafrin, thehealthcareblog.com
[...] The ACA imposes a minimum medical loss ratio (MLR) on all insurers. The MLR is the amount of money spent on covered person medical care divided by the total revenue received through premiums. [...]
The ACA requires health insurers in the individual and small group market to spend 80 percent of their premiums (after subtracting taxes and regulatory fees) on medical costs. The corresponding figure for large groups is 85 percent. [...]
Even though the MLR is a national law, it may not apply in your state.
Why? Because many States are petitioning for a waiver. HHS is currently reviewing applications from six states: Florida, Kansas, Michigan, Texas, Oklahoma and North Carolina.
SO, another out of control driver for profit -- Insurance Providers -- just might a contributing factor to the outsized growth in the cost of Health Care. It's not like we can "shop around" for the best price, when we are ill, and in urgent need of care.
There might be 2% cost-benefit reward ratio -- just waiting to be implemented around that MLR ratio, eh?
Insurers improve your outcomes -- and earn a 2% MLR bonus. Fail to deliver, then lose it.
Of course many Progressives would argue: Why in a humane world, should there even be a 15% PROFIT MARGIN, on anything as basic and universal as providing caring for human illness.
June, 1991 General Accounting Office
“If the US were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs [10 percent of health spending] would be more than enough to offset the expense of universal coverage” (“Canadian Health Insurance: Lessons for the United States,” 90 pgs, ref no: T-HRD-91-90.December, 1993 Congressional Budget Office
S491 (Senator Paul Wellstone’s single payer bill) would raise national health expenditures above baseline by 4.8 percent in the first year after implementation. However, in subsequent years, improved cost containment and the slower growth in spending associated with the new system would reduce the gap between expenditures in the new system and the baseline. By year five (and in subsequent years) the new system would cost less than baseline. (“S.491, American Health Security Act of 1993”)March/April 2012
Gerald Friedman, Professor of economics, University of Massachusetts-Amherst
“While providing superior health care,” the Expanded and Improved Medicare for All Act (HR 676), “would save as much as $570 billion now wasted on administrative overhead and monopoly profits. A single payer system would also make health-care financing dramatically more progressive by replacing fixed, income-invariant health-care expenditures with progressive taxes.”
Friedman estimated that, in 2013, single payer would save $215 billion on administrative costs to providers, $23 billion on government administration, and $153 billion on private health insurance administration. It would also save $178 billion on drugs, medical equipment, and hospital care by reducing their market power, for a total of $570 billion. Of that, single payer would spend $110 billion extending coverage to all, $142 billion on eliminating co-pays and increasing utilization, especially home health care and dental, and $74 billion to raise Medicaid payment rates to providers, for a net savings of $244 billion.
Why don't we charge people a 15% surcharge to eat? Well the "supermarket concept" with its intense competition, tends to shake out those excesses.
Perhaps the ACA's soon-to-be implemented version of the "supermarket concept" -- health insurance exchanges -- perhaps it will deliver the same market efficiencies in the long run. Perhaps not.
It would seem a lot more likely IF, one of the choices on the menu, were a Public Option -- you know, give us the option to choose Health Care, which has only a 2-3% profit/administrative margin built into its fees.
A NON-PROFIT CHOICE THAT WE STILL DO NOT HAVE.
If Americans had that choice, that 2% spare change problem could be "solved" in no time.
15% - 3% equals 12% of "found money" that could be plowed back in to the public wellness system, to reduce the price of cost-effective quality care.
Heck they might even be able to LOWER the "Eligibility Age for Medicare" if we had a cost-effective, non-profit-driven choice like that. A choice that forgoes the Corporate Middlemen ... see ya, wouldn't want to be ya!
A choice that focuses on outcomes -- NOT incomes. Our outcomes, not their incomes.
Kind of hard to fit all that into a 15-second sound bite, on the agenda-setting Sunday Shows, I guess. Assuming at least some of this was what David Axelrod was thinking.