Morning Bell: Two Steps Back
Posted June 25th, 2008 at 9:12am in Health Care 
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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.
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7 Responses to “Morning Bell: Two Steps Back”
Edgarjjohn, Cincinnati on June 25th, 2008 at 9:12am said:
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
Richard Smitley, 3375 Waterford, MI. 48329 on June 25th, 2008 at 9:12am said:
I am soon to be a Medicare recipient and it scares me. I plan on using Medicare and a gap policy. I find that by fare the most cost effective gap policy is from AARP. Why is do I have to become a member of an organization with social government views to get a good price on my Medicare supplemental insurance?
During my career with cooperate America I have found that there is the formal organization and the informal organization. I often found that the informal organization was much more efficient and more effective up to the point of the formal organization stopping their efforts.
Are there any possibilities that Heritage Foundation could take on the role of the informal organization on some of the more outrageous issues IE healthcare? Could a branch of Heritage Foundation be set up to: 1) Offer or recommend a competitive market based Medicare gap policy? 2) Offer a, plain old fashion, competitive market based, health insurance policy? (I think this insurance business has gotten out of control. I pay for a dental program that collects $20 from me and pays for my teeth to be cleaned $100 twice a month and a percentage of any other dental work I need. Why can’t I pay for my own health maintenance and have a more reasonable insurance policy for the out of the ordinary which they now call “catastrophic insurance”? And another thing, if the rules haven’t changed in the last few years, why is it that the doctor will charge me more than what they will accept as a payment from the insurance company?) 3) There are probably many more competitive market based entities that Heritage Foundation could convince the business world to get into with the potential customer base of your membership.
This could be a real informal movement in the direction of what we really believe in, and your membership could blossom.
rock the benz redding, ca on June 25th, 2008 at 9:12am said:
why do I get a big black space on the left of these emails? thanks
Dave McDuffie, Laguna Niguel,Ca on June 25th, 2008 at 9:12am said:
I lost my house in the economic downturn and falling housing market in the early ’90s. Where is MY money? I was quallified, paid lots of money down, then my company went bankrupt and I lost everything! Can I get in line now? This bumper crop of absolutely incompetent political criminals is costing Americans AMERICA! These rascals are destroying our economy while enriching themselves with our tax dollars. When are we going to wake the hell up?! Time to take away their private jets and their limos! Put them all on a segway! And make them pay for it.
THOMAS F KELLY on June 25th, 2008 at 9:12am said:
I AM A 45 YEAR OLD MALE H.S. GRAD,EMPLOYED BY THE NYPD.I GREW UP INFLUENCED BY THE VALUES OF RONALD REAGAN IE;SELF RELIANCE,WORK HARD SAVE MONEY,INVEST IN YOUR OWN FUTURE ETC. I APPLIED FOR MY FIRST MORTGAGE AT 22 YEARS OLD AT A RATE OF 9.25 FIXED I UNDERSTOOD THE PAYMENTS AND OTHER COSTS INVOLVED IN HOME OWNERSHIP,HOWEVER LIVING IN THE “VAMPIRE”STATE(NY)INCREASED TAXES CONSTANT INCREASES IN TOLLS,FARE HIKES,WATER/SEWER TAXES,TAXES,TAXES,TAXES,PERMIT FEES ETC WITHOUT THE BENIFIT OF SALARY INCREASES TO MATCH COST OF LIVING,I GOT A 2ND JOB TO MAKE MY PAYMENTS I DID AS I WAS TAUGHT I DIDNT CRY FOR A GOVT BAILOUT I NOW OWN MY HOUSE FREE AND CLEAR THANKS TO THE CONSERVITIVE VALUES ,HARD WORK AND PRIDE IN THE AMERICA I GREW UP IN. CAN MY CHILDREN HOPE FOR THE SAME?OR SHOULD I TELL THEM “CLAIM IGNORANCE BLAME OTHERS HOPE FOR THE FREEBIE BAILOUT,YEA KIDS THIS IS YOUR DEMOCRATIC AMERICA. GOD HELP US
Larry K White on June 25th, 2008 at 9:12am said:
New format (6-25-08) is unreadable. How can one change the print font to larger ??
Larry K White on June 25th, 2008 at 9:12am said:
OOOPS; one more click worked. I like the new fomat.