Lib­er­als’ fear and loathing of pri­vate Medi­care plans

The Washington Times Daily - - POLITICS - Robert E. Mof­fit, PhD, is a se­nior fel­low in the Her­itage Foun­da­tion’s Cen­ter for Health Pol­icy Stud­ies.

Pres­i­dent-elect Don­ald Trump has picked Rep. Tom Price, Georgia Repub­li­can, to be the next sec­re­tary of Health and Hu­man Ser­vices (HHS), and in­com­ing Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat, doesn’t like it one bit. To hear Mr. Schumer tell it, Mr. Price will wage a “war on se­niors,” try­ing to “pri­va­tize” Medi­care and thereby putting “se­niors’ health care at risk.”

Ac­tu­ally, Mr. Price fa­vors ex­panded choice and com­pe­ti­tion in the Medi­care pro­gram — as rec­om­mended by House Speaker Paul D. Ryan, The Her­itage Foun­da­tion and many oth­ers. He would al­low pri­vate health plans, in­clud­ing em­ployer plans, to com­pete on a level play­ing field with tra­di­tional Medi­care as well as each other.

And that makes Mr. Schumer’s rhetoric weird.

Most Amer­i­cans like their pri­vate health plans, par­tic­u­larly their em­ployer plans, and want to keep them if they can. More­over, Medi­care is al­ready a rich mix­ture of pub­lic health care fi­nanc­ing and pri­vate health care de­liv­ery.

Un­like the Veter­ans Ad­min­is­tra­tion, which lit­er­ally owns hos­pi­tals and pays gov­ern­ment salaries to its doc­tors, Medi­care’s de­liv­ery sys­tem is al­most en­tirely pri­vate, in­clud­ing nearly 5,000 Medi­care-cer­ti­fied hos­pi­tals, over 15,000 skilled nurs­ing fa­cil­i­ties and al­most 700,000 physi­cians, as well as most other med­i­cal pro­fes­sion­als. Most are re­im­bursed by “tra­di­tional Medi­care.”

How­ever, a large and grow­ing part of the Medi­care pro­gram is a sys­tem of com­pet­ing pri­vate health plans called Medi­care Ad­van­tage (or, some­times, “Com­pet­i­tive Medi­care”). These are pri­vate, de­fined-con­tri­bu­tion health plans, but Medi­care Ad­van­tage is still a pub­lic pro­gram, mostly fi­nanced by pub­lic dol­lars and gov­erned by fed­eral rules and reg­u­la­tions.

Na­tion­wide, these plans serve nearly onethird (31 per­cent) of the to­tal Medi­care pop­u­la­tion. In Mr. Schumer’s home state, they are even more pop­u­lar, serv­ing 37 per­cent.

In Medi­care Ad­van­tage, the gov­ern­ment gives health plans a per capita pay­ment for their en­rollees based on the plans’ com­pet­ing bids to pro­vide Medi­care ben­e­fits. To­day, those bids av­er­age only 94 per­cent of tra­di­tional Medi­care’s costs. That means they are eco­nom­i­cally more ef­fi­cient at de­liv­er­ing Medi­care’s tra­di­tional ben­e­fits than tra­di­tional Medi­care it­self.

And plans that bid be­low the ad­min­is­tra­tively de­ter­mined bench­mark re­ceive “bonus” funds that can be used to lower pre­mi­ums, pro­vide richer ben­e­fits, or both. Ac­cord­ing to The Kaiser Fam­ily Foun­da­tion, the av­er­age monthly Medi­care Ad­van­tage (MA) premium is now $37, and 81 per­cent of Medi­care en­rollees have ac­cess to at least one MA plan that in­cludes drug cov­er­age where they pay noth­ing beyond their reg­u­lar Part B premium pay­ment.

Lib­er­als fran­ti­cally try­ing to stop Medi­care “pri­va­ti­za­tion” have a prob­lem. Medi­care par­tic­i­pants like it; that’s why Medi­care Ad­van­tage en­roll­ment is surg­ing. The Kaiser Fam­ily Foun­da­tion es­ti­mates that, by 2026, 41 per­cent of all Medi­care en­rollees will choose Medi­care Ad­van­tage.

The left’s peren­nial cam­paign against “pri­va­ti­za­tion” as­sumes that gov­ern­ment­man­aged health care fi­nanc­ing and de­liv­ery is some­how safer, su­pe­rior and more se­cure. So why is the Veter­ans Ad­min­is­tra­tion such a dis­as­ter? Its poor man­age­ment and cold­hearted in­dif­fer­ence to pa­tients have dam­aged veter­ans’ health and, ac­cord­ing to CNN, cost thou­sands of lives.

Se­niors do have good rea­son to worry about their health care, though. And it’s be­cause of Oba­macare. To help fund Oba­macare, the Af­ford­able Care Act au­tho­rizes cut­ting hun­dreds of bil­lions of dol­lars in Medi­care pay­ments. This year’s re­port from the Medi­care Trustees warns: “By 2040, sim­u­la­tions sug­gest that ap­prox­i­mately half of hos­pi­tals, 70 per­cent of skilled nurs­ing fa­cil­i­ties and 90 per­cent of home health agen­cies would have neg­a­tive to­tal fa­cil­ity mar­gins, rais­ing the pos­si­bil­ity of ac­cess and qual­ity of care is­sues for Medi­care ben­e­fi­cia­ries.”

Con­gres­sional lib­er­als are not help­ing. They’re sim­ply in­dulging in an­other round of “Medis­care” — a trans­par­ently cyn­i­cal po­lit­i­cal strat­egy to frighten the liv­ing day­lights out of vul­ner­a­ble older Amer­i­cans to prop up and fur­ther en­trench the fed­eral bu­reau­cracy’s con­trol of their health care.

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