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Tilting at Windmills

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July 7, 2008
By: Kevin Drum

MEDICARE ADVANTAGE....Thanks to an obsolete formula embedded in the current law, doctors who see Medicare patients had their fees cut by 10% on July 1. The House has passed a bill to restore the cut, but the Senate has yet to follow suit. Robert Pear explains why:

[President] Bush and many Republicans oppose the bill because it would finance an increase in doctors' fees by reducing federal payments to insurance companies that offer private Medicare Advantage plans as an alternative to the traditional government-run Medicare program.

Insurance companies and the White House argue that the bill would hurt beneficiaries who rely on private Medicare plans. America's Health Insurance Plans, a trade group, ran television advertisements last week, urging Congress to "stop cuts to Medicare Advantage."

Indeed. This would be the same Medicare Advantage that supposedly harnesses the power of the free market to operate more efficiently, yet still requires sizeable subsidies because it costs considerably more per person than good 'ol big government Medicare. What's at issue here is cutting those subsidies so that private Medicare costs only a little bit more than standard Medicare instead of the whole lot more that it costs now.

But that's not in the cards. Forcing private insurers to operate as efficiently as the federal government is apparently asking too much of the GOP's free market acolytes. Better to cut doctors' fees instead.

Kevin Drum 12:36 AM Permalink | Trackbacks | Comments (37)

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Comments

The Texas Medical Association’s PAC has officially withdrawn its endorsement of John Cornyn over this issue.

Posted by: SocraticGadfly on July 7, 2008 at 12:54 AM | PERMALINK

To be precise, Medicare Advantage plans cost approximately 13% per person more than under the government plan. While the insurance industry claims this is to provide extra benefits, in most cases the extra benefits are paid with additional increases in premiums, and the 13% extra from the government mostly goes to increase insurance company profits. This is a quite blatant example of corporate welfare being used to thank the insurance companies for their heavy contributions to Bush and the GOP.

Posted by: Ron Chusid on July 7, 2008 at 1:00 AM | PERMALINK

The doctor's job is to save your life. The insurance company's job is to cut costs by denying coverage. If I were the patient, I'd prefer that my money went to the doctor. Doctors are rarely poor, but given that my life is in their hands, I'd like to keep them happy. And given that I don't have insurance, I really don't care about whether the insurance companies make money or not. But I'll always pay my doctor. And I'll threaten the hospital with lawsuits when they try to overcharge me. But I won't do that to a doctor. He gets paid on time and without question. It's the price of being alive.

Posted by: fostert on July 7, 2008 at 1:47 AM | PERMALINK

[anonymous trolling deleted. We do have a suggestion, however - go to blogger.com and start your own blog, rather than trolling ours, and post whatever the hell you want to. Here, your chickenshit unsigned anonymous crap will get deleted. Deal.]

Posted by: on July 7, 2008 at 1:48 AM | PERMALINK

"But you're afraid to let the truth be posted here."

Apparently the site isn't opposed to giving liars and trolls space, though.

Posted by: Everyman on July 7, 2008 at 2:33 AM | PERMALINK

Rather than watch YouTube, “anonymous,” (some people have questioned your post before), here’s Tom Hayden on the “more ambiguous than audacious” Hayden has Obama on Iraq.

Posted by: SocraticGadfly on July 7, 2008 at 2:34 AM | PERMALINK

The extra 13% that insurance companies need is a surcharge for the extra efficiency and savings that private Medicare coverage provides.

Posted by: insurance co. spokesman on July 7, 2008 at 2:58 AM | PERMALINK

Just another reason for the donut hole loving elderly NOT to vote conservative-Republican.

Send Dems reps to Sun City to discuss the difference and suddenly Arizona would be Obama country.

Anyway Arizona voted for Clinton in both terms so it really is a purple state. If Howard Dean gave Arizona a little kick and a jump start, than Kyl and McCain wouldn't even be a spec on the map anymore.

Posted by: Me_again on July 7, 2008 at 3:00 AM | PERMALINK

Medicare advantage patients pay an extra premium. Kevin has to explain where the subsidy comes from.

If Medicare Advantage is working, and the extra benefits paid for by premium increases than what is the problem?

Posted by: Matt on July 7, 2008 at 7:11 AM | PERMALINK

The subsidy comes from the government payments to the insurance companies offering Medicare Advantage averaging 13% higher than the costs of the rest of the Medicare program on a per patient basis.

The program was sold on the basis that the efficiency of the marketplace would allow private insurers to give the same benefits for a lower price or better benefits for the same price compared to fee-for-service Medicare run by the government. The subsidy was supposed to be a temporary measure to help attract insurers and patients and cover start-up costs.

The fact that it is still in place several years later and Bush and Senate Republicans are willing to block or veto a bill that would decrease this subsidy in order to keep payments to doctor's from decreasing to the point where many are threatening to stop taking Medicare patients is the surest sign that this was always just another form of Republican corporate welfare.

Posted by: tanstaafl on July 7, 2008 at 8:00 AM | PERMALINK

The fact that Matt asked that question without addressing the info from Ron Chusid in the 2nd comment in the thread shows that he is either too lazy to read before commenting or is just another dishonest troll.

Posted by: tanstaafl on July 7, 2008 at 8:03 AM | PERMALINK

i esp like the report that arlen spector -- that man of such integrity and honor -- caved when the administration promised to increase the fees paid oncologists... you know, the specialists he's likely to see.

http://thinkprogress.org/2008/07/03/oncology-association-horrified-by-specters-vote-against-medicare-bill/

Posted by: linda on July 7, 2008 at 8:15 AM | PERMALINK

I have actually been blogging this topic for a couple of weeks now, after I caught a tiny blurb of the wire feed late last month that almost escaped me. I have seen some stupid republican moves in my almost-five-decades on this planet, but this idiocy takes the cake. The AMA and the AARP are both pissed off - and the AARP is calling out senators by name. They are going to roll over the republicans like a Mack truck this fall.

Posted by: Blue Girl, Red State on July 7, 2008 at 8:44 AM | PERMALINK

Medicare Advantage has a history. It was first proposed and past by conservatives to prove to the public private industry could do a better job than Medicare. Conservative kool-aid drinkers believed the wonderful advantages of Medicare Advantage would attract millions upon millions into the plan and regular Medicare would fade away. Instead it has proved to be a boondoggle for big health insurance. The insurance companies still have to provide the same benefits of Medicare but the added insurance administrative layer and profits for CEO buyouts cost about 13% more than regular Medicare.

Medicare Advantage is a failed program that should have been put out of its misery long ago. That it hasn't been is a testament to the delusional "thinking" of the Heritage Foundation and others of their ilk. They are utterly unwilling to look at the evidence and admit their experiment has failed. It is also a testament to the power of big insurance companies to buy Republican Senators and Congressmen who stay bought.

As to the crap about extra services. Why should taxpayers provide extra services for one bunch of seniors and not for another? If the seniors want and can afford extras they should pay for them.

Posted by: Ron Byers on July 7, 2008 at 8:51 AM | PERMALINK

"Passed" not "past." Long weekend.

Posted by: Ron Byers on July 7, 2008 at 8:53 AM | PERMALINK

Kevin, "Forcing private insurers to operate as efficiently as the federal government ..."

What? The Feds operate efficiently?!?!

Are you sure you still live in the USA?

Posted by: on July 7, 2008 at 8:53 AM | PERMALINK

Hey guy who refuses to identify himself, you are so 1970s.

If health insurers were operating in a classic market your market analysis might work they aren't and it isn't.

Posted by: Ron Byers on July 7, 2008 at 9:13 AM | PERMALINK

Hey poster with no "name" you are so 1970s.

If health insurers were operating in a real market, real market forces might force them to be more efficient than the government. They don't and they aren't.

Posted by: Ron Byers on July 7, 2008 at 9:15 AM | PERMALINK

Ya know, nameless, the government does actually get a few things right. If it really was as fucked up consistently as it has been the last eight years, we would have taken up arms long ago. But in reality - my generation of VA employees took a broken and deplorable system and turned it around and made the system the model of efficiency - before these idiots created a whole bunch more high-needs vets without increasing our funding. And our HIS system rocks.

Posted by: Blue Girl, Red State on July 7, 2008 at 9:28 AM | PERMALINK

Root of the whole medical mess:

When you have a private 'Professional Organization' in exclusive control of an essential industry... watch out for your wallet cause they... gotcha!

Unfortunately, this cannot be addressed by our current political system.

Posted by: Buford on July 7, 2008 at 10:07 AM | PERMALINK

The fact that Bush and the GOP would take on the AMA and AARP over this tells you how important it is to conservatives. It's not just garden variety corporate-welfare, its delivering one of the largest social insurance programs in the USA to the private sector. It will be UnitedHealth/Medicare or and Humana/Medicare if the GOP can keep Medicare Advantage in place. They already have 25% of Medicare beneficiaries in the program (the heatlthiest 25% of course). I'm surprised this issue doesn't get more attention from Dems. It's as big as the attempt to privatize SocSec in my opinion

Posted by: steve on July 7, 2008 at 10:24 AM | PERMALINK

The conservatives will try to keep the program to avoid acknowledging that single payer works best. Our pseudo-progressives will do their usual cave-in, and the insurance industry wins again.

Posted by: Ethan on July 7, 2008 at 10:29 AM | PERMALINK

It always baffles me how anyone could possibly believe that a private for profit entity could EVER be "more efficient" and "cost effective" than a government, or other non-profit program, especially when we are talking about a service that is constant and always on.

NO profit-seeking program can cost less while providing the same, or better, service to members than a non-profit system. The for-profit venture is ALWAYS about cutting services while maximizing paychecks to the CEO and, when applicable, shareholders. This means minimizing service AND maximizing costs to subscribers. You HAVE to get less (and crappier) service from a for-profit because it is, first and foremost, NOT interested in providing the service, per se, it is ONLY interested in maximizing CEO pay and management benefits while screwing its employees and subscribers.

The only time a for-profit enterprise MIGHT be more cost effective than a government-run or non-profit venture is if the service being provided is provisional and temporary. In that case, the cost is itself temporary.

The only way that "private" health insurance can be the best way to go is if it is non-profit. Either the government provides universal healthcare coverage directly, or it stipulates that ONLY non-profit health insurance be allowed. Otherwise, you WILL get cuts in service and denials of treatment (all so the CEO can have a 3rd mansion and a personal jet) as the primary modus opperandi.

Posted by: Praedor Atrebates on July 7, 2008 at 10:44 AM | PERMALINK

There are suggests that the cut will force doctors to "function more efficiently instead" Since the medicare payments already make net income nearly insignificant we can expect that

Doctors forced to " function more efficiently" will either stop seeing medicare patients or "efficiently" eliminate the depth of evaluation needed for elderly patients.

Posted by: William Wright on July 7, 2008 at 11:03 AM | PERMALINK

There are suggests that the cut will force doctors to "function more efficiently instead" Since the medicare payments already make net income nearly insignificant we can expect that

Doctors forced to " function more efficiently" will either stop seeing medicare patients or "efficiently" eliminate the depth of evaluation needed for elderly patients.

Posted by: William Wright on July 7, 2008 at 11:03 AM | PERMALINK

To the anonymous troll:

In 24 months, we will be very far down the road to single payer. That is what Democratic control of POTUS, 61 in the senate and 300+ in the House means.

Posted by: POed Lib on July 7, 2008 at 11:03 AM | PERMALINK

POed Lib? 300-plus Dems in the House?

A. You're smoking crack.
B. If that WERE to happen, at least 40 of them would be "Blue Dogs," and likely of little legislative help on the issue.

Posted by: SocraticGadfly on July 7, 2008 at 11:27 AM | PERMALINK

Re my post near the top of this thread, have any other state medical organizations "unendorsed" GOP Senate incumbents?

Posted by: SocraticGadfly on July 7, 2008 at 11:30 AM | PERMALINK

I was lured in to an Advantage program when I became eligible for Social Security Disability Insurance. The choices were confusing, as I knew nothing about Social Security. Advantage Plans appeared to be equivilent to Medigap.

However, Medigap offers a "Window of Opportunity" during the first six months of eligibility to sign up for guaranteed insurance based on age, not medical condition. Advantage plans do not. They are able to change their fees at whim, and do. It has turned out to be a classic bait-and-switch for me, leaving me unable to afford much needed supplemental insurance.

Anyone currently enrolled in a Medical Advantage Plan should be allowed a second window of opportunity to sign up for Medigap, abandoning the failed Advantage programs.

Posted by: Edna Gardener on July 7, 2008 at 12:26 PM | PERMALINK

In response to Edna Gardener's post, I am about to go on Medicare and have been trying to find out about the good old fashioned Medigap option, since I want no truck with the Medicare Advantage vultures (I volunteer for visits and transportation through a local organization that serves the elderly, and the people I help were being bombarded last fall by phone solicitations from insurance companies to the point of exasperation and despair). However, there is almost NO information on the government website about anything except Advantage programs (for that, there is elaborate information)! I am going to have to go hat in hand over to the social security office to find out how to do Medigap. This is one of the most corrupt situations I know about (well, it's not up there with torture and killing more than 4000 soldiers and hundreds of thousands of other folks so that W's oilpatch friends can have their way in Iraq, but still, it sucks). And it makes me think that getting national health care is going to be really, really, really hard.

Posted by: jhill on July 7, 2008 at 1:00 PM | PERMALINK

jhill,
May I suggest that you try Medicare for a bit, before you pay a premium on an added program?
I've been on Medicare for several years because of disability. It has worked well for me.
If you have something that Medicare doesn't cover, then consider extra coverage.

Posted by: maude on July 7, 2008 at 1:13 PM | PERMALINK

www.Medicare.gov gives a list of every kind of option, including a long list of supplemental insurers. Also, go to www.naic.org and find your state insurance department website to see if they have resources on supplemental insurers in your state.

Posted by: Barbara on July 7, 2008 at 2:13 PM | PERMALINK

I just saw maude's comment -- the problem, maude, is that in the first six months of becoming eligible for Medicare you are guaranteed Medigap coverage without underwriting. If people do what you suggest, they will buy Medigap only after they have the kind of health problems that result, through underwriting, in high premiums.

Also, to whoever said MA plans have the lower risks -- that used to be true, for sure, but it isn't really anymore, not systematically in any event.

Posted by: Barbara on July 7, 2008 at 2:16 PM | PERMALINK

I've been on Medicare (for disability) since 1992 and switched to Medicare Advantage a few years later. My experience on Medicare was positive for basic care--I had a doctor who actually believed in practicing medicine-- but I was the last person on Medicare she was willing to take, as Medicare payments didn't cover her basic costs for service. As for any kind of specialist, like say, an ophthamologist, forget about it. I switched to Medicare Advantage through Kaiser Permanente and could not be happier. When I need a specialist's care, I get it. No searching for the only doctor in the Bay Area willing to take a Medicare patient. If we had universal coverage, like the NHS in Great Britain, I would think straight Medicare would be fine. Until that arrives, I'm a poor, disabled Democrat who is grateful for this coverage.

Posted by: Deborah on July 7, 2008 at 4:51 PM | PERMALINK

I've been on Medicare (for disability) since 1992 and switched to Medicare Advantage a few years later. My experience on Medicare was positive for basic care--I had a doctor who actually believed in practicing medicine-- but I was the last person on Medicare she was willing to take, as Medicare payments didn't cover her basic costs for service. As for any kind of specialist, like say, an ophthamologist, forget about it. I switched to Medicare Advantage through Kaiser Permanente and could not be happier. When I need a specialist's care, I get it. No searching for the only doctor in the Bay Area willing to take a Medicare patient. If we had universal coverage, like the NHS in Great Britain, I would think straight Medicare would be fine. Until that arrives, I'm a poor, disabled Democrat who is grateful for this coverage.

Posted by: Deborah on July 7, 2008 at 4:52 PM | PERMALINK

As a general rule, if insurance companies and the Bush White House are agreeing on something, it's almost certainly a really bad idea.

Posted by: Douglas Moran on July 8, 2008 at 12:20 AM | PERMALINK

Doctors have traditionally supported the GOP because they're afraid of so-called socialized medicine impacting their fees.

Now they're finding out that when it's a matter of them versus big pharma and the insurance cos, the GOP will sacrifice them without a second thought.

Welcome to the Democratic coalition, docs.

Posted by: Nancy Irving on July 8, 2008 at 3:14 AM | PERMALINK




 

 

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