Monday, August 20, 2012

Samuelson at it again: Mixing Medicare Advantage with Ryan's Medicare Vouchers

Leave it to Neoliberal hack Robert Samuelson, in his yen to sell the Neoliberal prescription for our economic problems, to once more dip into his confusion and conflation barrel and muddy waters! This time about the vouchers (called "premium support") proposed by the Romney -Ryan ticket, and Medicare Advantage plans currently implemented by private insurance groups like Kaiser-Permanente.

In his latest piece ('Why Ryan Plan Might be Right', in The Sunday Denver Post. Aug. 17, p. 2K) Samuelson claims to cite a "just published study in the Journal of the American Medical Association suggesting that....well, Ryan might be right".


He goes on to write:

"The study finds a voucher -type system might noticeably reduce costs compared to traditional 'fee for service' Medicare. Three Harvard economists did the study including one prominent supporter of President Barack Obama's health overhaul".

Samuelson goes on to claim that the study "compared the costs of traditional Medicare with Medicare Advantage, a voucher-like program that now enrolls about 25% of beneficiaries."

This is the first hint of dishonesty in using the term "voucher-like" to describe Medicare Advantage plans when they bear no resemblance to the absolute voucher plans proposed by Ryan. For reference, let's understand that for seniors who choose to enroll in a Medicare Advantage plan, Medicare pays the private health plan a set amount every month for each member. Members may have to pay a monthly premium in addition to the Medicare Part B premium, but many companies offering Medicare Advantage plans make them available for a $0 monthly premium in addition to the Medicare Part B premium, which the member pays directly to Medicare.

Under traditional Medicare the coinsurance is pegged at 20%, but the actual amount out of pocket can be higher since specialists generally charge more for services.  This is not the case for the private Medicare Advantage plans for which the payout limits are often under 20% for special services, because the premiums from standard Medicare beneficiaries are used to subsidize higher specialist and other costs.

This is exactly why, in previous reports, the GAO has reported that the cost -burden of Medicare Advantage plans has added up to $12 BILLION a year to the cost for traditional Medicare and why the latter's headed toward insolvency. Of course! Because the Advantage plans are like parasites bleeding it down! Does Samuelson mention any of this? Of course not!

The point is the Advantage plans are required to offer a benefit “package” that is at least as good as Medicare's and cover everything Medicare covers, but  usually they offer much more!  Plans that require higher out-of-pocket costs than Medicare for some benefits, like skilled nursing facility care, can balance their benefits package by offering lower copayments for doctor visits, plus use some of the excess payments they receive from the government for each enrollee to offer supplemental benefits.

But this in NO way is similar to Ryan's voucher ("premium support") plan which would offer a single fixed voucher in a designated amount (e.g. $10,000) - from the government - to have to go out and actively snag a private plan (hoping it will accept the senior)  and the limits of the voucher to cover future costs of visits, care over the year. By contrast, once a senior chooses a private plan in the sphere of Medicare Advantage there are no 'ifs, ands, or buts' - he will be allocated a  private plan and can't be denied for pre-existing conditions or any other balderdash.  The private insurers also know it's a good deal for them since they're assured of regular monthly payments from the gov't which have the potential of increasing each year! No fixed, one time, voucher pays!

Another goodie for the Medicare Advantage senior: Advantage plans typically do not contain deductibles, thereby giving members "first-dollar" coverage. (Original Medicare has a potentially recurring (more than once per calendar year) deductible for Part A and an annual deductible for Part B.) Ryan's plan by contrast will likely see private health insurers attaching massive deductibles, on the order of $3,000 -$5,000 or more, for the simple reason that the insurers will be having to take chances (with no regularly promised gov't subsidies, only the single voucher payment) with a person in a putative high risk health pool! It doesn't take a genius to see that with such deductibles in play, and assuming the private insurer even accepts the senior, much of the voucher will be eaten up before the first real care is even delivered.

In many ways this is analogous to the sort of private insurance plans I was offered, at age 63 - before going onto Medicare. In nearly all cases, I'd  have had to cough up a mammoth deductible, $5,000, and then the premiums themselves were sky high - like $600- $700 a month. And that was BEFORE I'd learned I had prostate cancer(this year). Now, if I had to go cap in hand with a $10-15k Ryan-voucher to try to snag an insurance company to pay for my care, I'd likely be laughed out of their offices! They'd probably think I was some kind of comedian out to try his new shtick.

No wonder, given all the above, Samuelson can make the bald and devious claim that "Medicare Advantage has cost less for identical coverage. From 2006 to 2009 the gap averaged 11 percent between traditional Medicare and voucher plans similar to that under the proposal by Ryan, ..would serve as a price benchmark"

Of course, as I already showed above,  the "voucher" plan of Ryan is NOT the same as the Medicare Advantage private plan! Hence, Samuelson's use of the phrase "voucher plans" in the context is misleading, and egregious. As for that "11 percent gap between the traditional Medicare and Medicare Advantage" that price gap comes to almost exactly $12 billion, or the total amount the Advantage plans bleed away from the traditional Medicare to support their higher level of "penthouse" caliber choices, perks each year. The same 11% difference bleeding the original Medicare into insolvency!

If anyone, any senior, believes the Ryan plan vouchers will deliver to him or her a  Medicare deal even remotely comparable to the existing Medicare Advantage plans, he or she needs to be escorted to an Alzheimers' ward.

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