Tuesday, October 16, 2012

The Left Defends an Inefficient Medicare System

One well-hidden fact in yesterday’s Kaiser Family Foundation report regarding premium support is this – even the Kaiser Foundation admits that in half the country, private Medicare Advantage plans are more efficient than government-run Medicare.  Take a look at the summary on page 4:

Among beneficiaries in the traditional Medicare program [under a premium support proposal], about half (53%) – 18.5 million beneficiaries – would be expected to pay higher Medicare premiums for coverage under the traditional Medicare program, because about half of beneficiaries in the traditional Medicare program live in counties where traditional Medicare costs were higher than the benchmark.

What that sentence means is that, in about half of the country, seniors private Medicare Advantage plans are cheaper than government-run Medicare.  Under premium support, these seniors would not have to pay more to afford coverage – they could switch to a cheaper private plan, or pay more to maintain their more expensive coverage.

The Kaiser report is far from the only study finding that private plans are more efficient than Medicare in many, if not most, areas of the country.  Whereas the Kaiser report said that Medicare Advantage plans are less costly in about half the country, former Congressional Budget Office Director Alice Rivlin found an even higher number.  Rivlin testified before the Ways and Means Committee in April that “88 percent of Medicare beneficiaries live in areas in which a bidding process [for premium support] would produce a second-lowest bid below the current cost of FFS [traditional] Medicare.”  And a recent article in the Journal of the American Medical Association found that private plans would be 9% cheaper than traditional Medicare under a premium support proposal.  So there is much evidence to suggest that Medicare Advantage plans can provide health care for seniors at lower costs – which would help make Medicare more sustainable over the long term.

Of course, the Left wants nothing to do with such facts, preferring instead to cling to the shibboleth of government-run Medicare as a first step towards socialized medicine for all.  As we noted yesterday, the Kaiser report obscures the reasons for its findings – it trumpets the talking point of higher costs for seniors under premium support, but fails to highlight the fact that in many cases, those higher costs are because government-run Medicare is less efficient than private plans.  Likewise, the Commonwealth Fund, in releasing a study on Medicare Advantage today, claimed that “the Medicare Advantage program must work just as well as traditional Medicare” and that Obamacare “will make that possible.”

The facts suggest that the Medicare Advantage program can actually work better than traditional Medicare – and at lower costs.  The only problem is that the Commonwealth Fund, the Obama Administration, and the “professional left” don’t want to make that possible.  And so the same crowd that complained so loudly about “wasteful overpayments” to private Medicare Advantage plans now wants to keep making wasteful overpayments to government-run Medicare – merely to satisfy their government-centric ideology.