Healthcare Reform Part 7: Expanding Medicare

The public, with good reason, is now firmly against both a Canadian/British style single payer approach to reform, and the American counterpart, the introduction of a public option insurance system intended to compete with private insurers and cause them to lower their charges.  Rather than accept the public’s clear-cut opposition to this approach, Congress is trying to circumvent the public will by expanding Medicare to portions of the 55-64 age group and by creating a privately run public option.  This approach ignores the fact that Congressional proposals are opposed because of a basic distrust of government run medicine and the high cost of proposed changes rather than because of disagreements as to the method of takeover.

The details are still sketchy, but the core of the latest Senate proposal is to offer Medicare to those aged 55-64 who work for companies with 50 employees or less and need insurance.  The clear intent of the proposal is to create an opening that would later be enlarged to encompass the general population. 

Consider some of the likely consequences of this proposal.  First, those who are uninsured are likely to be at high risk.  The addition of this population to the Medicare pool would tend to raise the cost of Medicare premiums.  Second, the availability of Medicare coverage might cause some employers to drop coverage for their older employees.  Since the coverage available under Medicare is likely to be less than the coverage they currently receive from their employer, this would be disadvantageous.  Third, the expansion of Medicare would hasten the pending bankruptcy of Medicare, currently projected to occur in 2017.  The current “reform” proposals call for Congress to start taxing the public immediately but delay benefits until 2014.  Therefore, those aged 55-64 would become eligible for Medicare shortly before bankruptcy occurred and benefits were cut.  Fourth, it is a certainty that Medicare will use its financial clout to reimburse physicians and hospitals for these new enrollees at less than the going rate.  As a result, the rates for those enrolled under private plans will escalate.  The government will blame the escalation on the greedy insurers and initiate universal coverage for the services that the government deems to be necessary. 

If the government had any proposals that were likely to reduce the cost of care, the system might be able to absorb these new costs.  However, the proposal to end Medicare Advantage does not reduce the cost of care, it merely transfers the cost of some services from the government to the individual.  Similarly, the statement that government expenditures on Medicare can be reduced by 500 billion over ten years (by eliminating waste, fraud, and abuse) rings hollow since no one has identified any changes in accounting procedures that will accomplish this.  Instead, the government is likely to arbitrarily cut reimbursements by 500 billion.  Without any changes in procedures, waste, fraud, and abuse will continue but hospitals, physicians, and insurers will have to cut services to the public in order to remain economically viable.  (Since the main body of this article was written, the Health and Human Services has reported that the projected savings in Medicare may be  “unrealistic” and could lead to cuts in services). 

Similarly, privatizing the public option by turning it over to non-profit insurers does very little to mitigate the many flaws in the current Congressional proposals.  The main advantage is that these noon-profit insurers would not automatically have access to government subsidies that would be used to undercut private insurers under the guise of competition.  However, the fine print in these long proposals is likely to contain “triggers” that will eventually result in a single payer system.  These proposals need to be scrapped completely.

Editor's Note: The most recent version of the healthcare bill that expands Medicare appears to have reached an impasse as Connecticut Senator Joseph Lieberman, an Independent, opposed the expansion, according to the Wall Street Journal.  Senator Lieberman's objections

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lynnelevi
Posts: 2

HEALTH INSURANCE
Reply #2 on : Tue December 15, 2009, 03:34:21

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Very nice article about medical insurance industry. But you could get medical insurance for your entire family at the best price from http://bit.ly/7bwEx2 if you spent few mins you can find a good plan.

Vince
Posts: 2

Heathcare Reform
Reply #1 on : Mon December 14, 2009, 21:34:32

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I guess the wealthiest and strongest country in the world just cannot do it. We cannot reform healthcare. It just does not work here - we have to privatize it, and keep it that way. I do not have any idea how other civilized nations do it. But that does not matter; they are socialists, or Marxists, or aliens or something. We are better.

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