Morning Bell: Two Steps Back
Posted June 25th, 2008 at 9.12am in Health Care.
The fight to rein in exploding Medicare spending through exposure to market forces took two giant steps back this week. First, the House voted early this week to set aside regulations that would have allowed the Department of Health and Human Services (HHS) to buy medical equipment through competitive bidding. Then yesterday, the House voted to raid one of the most popular market-based health care initiatives: Medicare Advantage.
Since its creation in 2003, Medicare Advantage has helped more than 9 million Medicare recipients enroll in private health maintenance organizations (HMOs), local and regional preferred provider organizations (PPOs), and private fee-for-service (PFFS) health plans. The health plans cover all of traditional Medicare’s benefits and much more, including coordinated care and care-management programs for enrollees with chronic conditions as well as additional hospitalization and skilled nursing facility stays. Seniors can choose between plans with higher premiums and lower cost-sharing or those with lower premiums and higher cost-sharing.
According to the Centers for Medicare and Medicaid Services (CMS), Medicare Advantage enrollees receive, on average, an additional monthly value of $96 in added medical services compared to traditional Medicare recipients. Critics of Medicare Advantage point to Congressional Budget Office (CBO) data that shows Medicare payments for Medicare Advantage enrollees are 12% higher than traditional Medicare recipients, but this study ignores the extra health care Medicare Advantage enrollees are receiving. In addition, studies show that increased enrollment in Medicare Advantage actually decreases government spending in the federal government’s other major health care program, Medicaid.
But the CBO data comparing traditional Medicare payments and Medicare Advantage is flawed for a more fundamental reason. Medicare reimbursement rates are set by a purely political process that has no relation to market realities. The good government central planner types have tried to ween Medicare into more “scientific” fee schedules, but the same vote that ripped billions from the Medicare Advantage program gave those billions to doctors whose payments were set to be cut by those efforts.
There are clearly problems with the payment methods for Medicare Advantage plans — mostly problems that stem from basing the methods on the flawed payment system of traditional Medicare. Medicare Advantage has been a success, but it is far short of comprehensive Medicare reform. Members of Congress who wish to see a fair and equitable Medicare payment system can achieve that most easily through a new system of premium support in which all plans could compete on a level playing field.
Quick Hits:
- The mortgage bailout provision of the housing bill passed by the Senate yesterday was written by the very banks that will be receiving the government bailout.
- Rep. Chris Cannon (R-Utah) lost his Republican primary yesterday largely due to constituent anger over his support for government benefits for illegal aliens.
- Liberals in Congress are planning billions more in spending this summer in what they call the “We-R-U” campaign, but what the Politico has dubbed the “We-R-Your-Money” campaign.
- House Democrats again narrowly avoided a vote on expanding domestic production of oil yesterday, a vote USA Today says Democrats would probably lose.
- Insurgent attacks are up 40% in eastern Afghanistan.
- Author: Conn Carroll
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June 25, 2008 Edgarjjohn, Cincinnati writes:
Please….tell me….how does Obama expect to successfully negotiate with our enemies from Iran, Cuba, Venezuela, and Korea??
if he can’t even successfully negotiate non-violence with local gangs in his own neighborhood, on the South side of Chicago… which is now more dangerous than Iraq….
If Obama could prove his skills first by reducing Chicago gangland violence, murders and terror…while also coming up with a better plan on increasing high school graduates in his neighborhood — from about 30% to say at least 80%….read the below article…..
http://cbs2chicago.com/local/chicago.weekend.violence.2.704117.html.
He hasn’t accomplished anything toward acheiving the above two goals for his Chicago constituents…….But if and when he does……then, and only then, might he be a man I could trust that promises to negotiate with terrorists……
Ed
Edgar J. Johnson
President & CEO
MATRIX Capital Partners, LLC
Lakeside Center
6279 Tri-Ridge Boulevard
Suite 200
Loveland, Ohio 45140