Even More Obamacare Follies

[volinbham]

From the Kaiser report linked above

Looking to the decade ahead, Medicare
spending is projected to grow more
slowly (about 6 percent annually), and on
a per-beneficiary basis, will be closer to
growth in GDP and general inflation.3

However, current projections of
Medicare spending also assume large
cuts in physician fees that will occur
under current law due to the physician
payment formula known as the
Sustainable Growth Rate (SGR). If
reductions in physician fees are avoided
in the future, as they have been
numerous times in recent years,
Medicare spending will exceed the
current projections.

And

Medicare spending growth generally
reflects trends in national health
spending, which for many years has
outpaced growth in the economy, rising
from 7 percent of GDP in 1970 to nearly
18 percent in 2009, and is projected to
reach 20 percent by the end of the
decade.5 Over the long run, average
growth in Medicare spending per
beneficiary has been slightly lower than
per capita growth in private health
spending for comparable benefits,
although over some periods of time the
opposite has been true

hmmm, reductions in cost growth are tied to reducing benefits

More than half the Medicare savings comes from two provisions: one that institutes a productivity
adjustment which will reduce annual fee-for-service provider payment updates and one that makes
changes to payments for Medicare Advantage plans.

but the people evaluating Medicare directly do not consider these savings to be sustainable

The Medicare actuaries have questioned whether the
savings will be sustainable for the long run, while others believe the baseline sets a new achievable
target for promoting provider efficiency.

To counter a claim made by 8188 this report also shows that 42% of Medicare funding comes from general revenue.

Also noted in the report is the solvency issue of the trust fund - 2029 (best estimate). Shortfalls here mean more of the burden falls to general revenue (already 42% of the bill).

Oh my!

As noted earlier, Medicare is one of the largest and fastest growing federal programs. Budget experts
have expressed concern about the long-run fiscal implications of the federal obligation for spending on
Medicare and other health programs. For example, the National Commission on Fiscal Responsibility
and Reform estimated that by 2025, federal revenue will be sufficient only to pay for Medicare,
Medicaid, Social Security and interest on the national debt.

Isn't this interesting?

Overall, Medicare paid 48 percent of
beneficiaries’ total medical and long-term
care costs in 2006; beneficiaries paid 15
percent of the total for Medicare-covered
and other services and another 10
percent for premiums for Part B and
supplemental insurance; and third-party
payers (Medicaid, private supplemental
“Medigap” plans, and employersponsored
health plans) paid 26 percent
of the total on behalf of beneficiaries

Sorry Grandma

The Medicare Trustees
project that over time beneficiaries will
pay an increasing share of their Social
Security income for their Medicare
coverage. In 2010, premiums and costsharing
for Part B and Part D together
accounted for 27 percent of the average
Social Security benefit (premiums
accounted for 13 percent and average
cost sharing absorbed another 14
percent). By 2030, Medicare premiums
and cost sharing for Parts B and D are
estimated to grow to 36 percent of
average Social Security benefits (Exhibit
14).
29 Additionally, beneficiaries will face
rising premiums for private Medicare
supplemental coverage.

Now I see why costs aren't going up as much as they could...

Hooray for free insurance!!!!

Most beneficiaries are not protected
against increases in Medicare’s costsharing
amounts, however. Coinsurance
amounts rise annually along with
provider payment rates. With health
costs rising faster than income for
Medicare beneficiaries, median out-ofpocket
health spending as a share of
beneficiaries’ income increased from
11.9 percent in 1997 to 16.2 percent in
2006; among the top quartile of
beneficiaries, out-of-pocket health care
costs as a share of income rose to 30
percent or more by 2006 (Exhibit 15).

The future's so bright I've got to wear those big arse shades that fit over my regular glasses

There appears to be a consensus among policymakers and stakeholders
that Medicare price reductions alone will not work; some set of delivery system reforms will also need
to take hold. Further, to address the long-term financing challenges of the HI Trust Fund, and to meet
the needs of an aging population, additional revenues will be needed to forestall major Medicare
benefit reductions or relatively drastic reductions in provider payments.

More good news - lets move everyone to single payer; that'll fix it

Because of Medicare’s size, policymakers must also consider the broader effects of changes made to the
program. Major reductions in Medicare payments to providers could put upward pressure on the prices
they charge to private payers or negatively impact beneficiary access to services. Additional payments
to teaching hospitals and those located in rural areas and serving low-income urban populations are
explicitly made to address social needs beyond the care of Medicare patients, and substantially reducing
or eliminating these payments would disadvantage the communities that rely on these facilities. Raising
costs for Medicare beneficiaries would alleviate fiscal pressure for the government, but shift the burden
to beneficiaries—many of whom have modest incomes—and reduce their access to needed health
services.

 

[Carl Pickens]

You either realize you are not addressing the comment I made, or you don't care.

Medicare Is More Efficient Than Private Insurance – Health Affairs Blog

.

• According to CMS, for common benefits, Medicare spending rose by an average of 4.3 percent each year between 1997 and 2009, while private insurance premiums grew at a rate of 6.5 percent per year. (See Table 13)
• According to a calculation by the National Academy for Social Insurance, if spending on Medicare rose at the same rate as private insurance premiums during that period, Medicare would have cost an additional $114 billion (or 31.7 percent).
• The CBO explicitly stated that its data on relative cost growth should not be used to make the argument that Goodman and Saving make, writing that the relatively low growth rate of all health care expenditures other than Medicare and Medicaid “should not be interpreted as meaning that Medicare or Medicaid is less able to control spending than private insurers.” Goodman and Saving mistakenly suggest that the growth rate of private insurance is the same as the growth rate of all health care expenditures other than Medicare and Medicaid; however, as CBO points out, the growth rate of all health care expenditures other than Medicare and Medicaid includes not just spending by private insurers, but also government programs and out-of-pocket costs paid by the uninsured.
• The CBO has predicted that the rising cost of private insurance will continue to outstrip Medicare for the next 30 years. The private insurance equivalent of Medicare would cost almost 40 percent more in 2022 for a typical 65-year old.

Medicare Has Lower Administrative Costs Than Private Plans.
.

• According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of operating expenditures. Defenders of the insurance industry estimate administrative costs as 17 percent of revenue.
• Insurance industry-funded studies exclude private plans’ marketing costs and profits from their calculation of administrative costs. Even so, Medicare’s overhead is dramatically lower.
• Medicare administrative cost figures include the collection of Medicare taxes, fraud and abuse controls, and building costs.

Could you have possibly referenced a more liberal rag?...... Good grief

 

[volinbham]

So let's unpack this "Medicare's administrative costs are significantly less than private insurers".

Did you know that Medicare is administered by private companies?

http://healthcaresavvy.wbur.org/2011/12/is-medicare-public-or-private-insurance/

So an important question is just what is included in Medicare administrative expenses? They are outsourcing a considerable amount of administrative costs to private companies but that doesn't mean those costs disappear - it is a matter of accounting rather than a measurement of efficiency.

Here's another take on the issue.

http://healthblog.ncpa.org/private-insurance-is-more-efficient-than-medicare%E2%80%93by-far/

 

[theFallGuy]

You either realize you are not addressing the comment I made, or you don't care.

Medicare Is More Efficient Than Private Insurance – Health Affairs Blog

.

• According to CMS, for common benefits, Medicare spending rose by an average of 4.3 percent each year between 1997 and 2009, while private insurance premiums grew at a rate of 6.5 percent per year. (See Table 13)
• According to a calculation by the National Academy for Social Insurance, if spending on Medicare rose at the same rate as private insurance premiums during that period, Medicare would have cost an additional $114 billion (or 31.7 percent).
• The CBO explicitly stated that its data on relative cost growth should not be used to make the argument that Goodman and Saving make, writing that the relatively low growth rate of all health care expenditures other than Medicare and Medicaid “should not be interpreted as meaning that Medicare or Medicaid is less able to control spending than private insurers.” Goodman and Saving mistakenly suggest that the growth rate of private insurance is the same as the growth rate of all health care expenditures other than Medicare and Medicaid; however, as CBO points out, the growth rate of all health care expenditures other than Medicare and Medicaid includes not just spending by private insurers, but also government programs and out-of-pocket costs paid by the uninsured.
• The CBO has predicted that the rising cost of private insurance will continue to outstrip Medicare for the next 30 years. The private insurance equivalent of Medicare would cost almost 40 percent more in 2022 for a typical 65-year old.

Medicare Has Lower Administrative Costs Than Private Plans.
.

• According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of operating expenditures. Defenders of the insurance industry estimate administrative costs as 17 percent of revenue.
• Insurance industry-funded studies exclude private plans’ marketing costs and profits from their calculation of administrative costs. Even so, Medicare’s overhead is dramatically lower.
• Medicare administrative cost figures include the collection of Medicare taxes, fraud and abuse controls, and building costs.

"Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency. Administrative costs are incurred primarily on a fixed or per-beneficiary basis; this approach spreads Medicare's costs over a larger base of patient care cost.

Even if Medicare and private insurance had identical levels of administrative efficiency, Medicare would appear to be more efficient merely because of an artifact of the arithmetic of percentages--Medicare's identical administrative costs per person would be divided by a larger number for patient care costs.

Imagine, for a moment, that Fred and Jane each have a credit card from a different bank. Fred charges $5,000 a month, and Jane charges $1,000 a month. Suppose it costs each bank $5 to produce and send a plastic credit card when the account is opened. That $5 "administrative cost" is a much lower percentage of Fred's monthly charges than it is of Jane's, but that does not mean Fred's bank is more efficient. It is purely a mathematical artifact of Fred's charging pattern, and it would be silly to compare the efficiency of bank operations on that basis. Yet that is how many analysts compare Medicare with private insurance."

Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

 

[volinbham]

"Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency. Administrative costs are incurred primarily on a fixed or per-beneficiary basis; this approach spreads Medicare's costs over a larger base of patient care cost.

Even if Medicare and private insurance had identical levels of administrative efficiency, Medicare would appear to be more efficient merely because of an artifact of the arithmetic of percentages--Medicare's identical administrative costs per person would be divided by a larger number for patient care costs.

Imagine, for a moment, that Fred and Jane each have a credit card from a different bank. Fred charges $5,000 a month, and Jane charges $1,000 a month. Suppose it costs each bank $5 to produce and send a plastic credit card when the account is opened. That $5 "administrative cost" is a much lower percentage of Fred's monthly charges than it is of Jane's, but that does not mean Fred's bank is more efficient. It is purely a mathematical artifact of Fred's charging pattern, and it would be silly to compare the efficiency of bank operations on that basis. Yet that is how many analysts compare Medicare with private insurance."

Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

Yep - this point is made in the second link I posted above you. Add to that the fact that Medicare doesn't handle all of it's administration in house, the lack of effort in improving care/reducing costs, etc. and it is an accounting artifact more than some grand achievement.

Even Eziekel "kill me at 75" Emmanuel argues that artificially low administrative costs are not a good thing.

 

[hog88]

LG just got biatch slapped with facts.

 

[utvolpj]

Bham

 

[Velo Vol]

Comparing Medicare to insurance is largely apples to oranges

 

[volinbham]

Comparing Medicare to insurance is largely apples to oranges

Hasn't stopped anyone in this thread or in the policy argument.

 

[Velo Vol]

Again I have to advocate the Swiss system and the amount of choice they have.

The Swiss system, from the patient's standpoint, doesn't look that far removed from the ACA model (for those not with employer-provided insurance).

 

[MG1968]

The Swiss system, from the patient's standpoint, doesn't look that far removed from the ACA model (for those not with employer-provided insurance).

I bet it didn't require 4000 pages of legislation and a dumbass politician telling the people that "you have to pass the bill to see what's in it."

 

[SpaceCoastVol]

They are nonpartisan industry execs. Very respected. You as usual don't know what you are talking about.

Respected? Like the Bar association?

No, you missed the point, as usual.

 

[volinbham]

The Swiss system, from the patient's standpoint, doesn't look that far removed from the ACA model (for those not with employer-provided insurance).

A couple important differences as I see them.

1) As I understand it the mandated minimum coverage is lower (the essential benefits). It appears that this portion which is mandated is a lower cost program that doesn't require as much in the way of subsidies for the very low end of the economic system

2) The regulations allow considerably more competition among providers

3) People can build customized insurance packages more easily

4) There are not massive chunks of coverage from single payer (government sources).

5) There is not employer-based coverage

Where it is similar

1) Mandated coverage

2) There is a minimum set of benefits you must purchase

If we are going to mandate coverage (that cat is out of the bag) the Swiss system relies on vigorous competition AND a regulatory framework that allows all sorts of variety in supplemental packages purchases so individuals can tailor a plan that suits them.

ACA is a patchwork, overly complicated system that maintains a heavy hand on what kind of package can be offered and by whom (the dreaded within state only model) that also has single payer for a very substantial portion of the market.

If we have to go with a mandate I'll take the Swiss system all day long over the ACA.

 

[Velo Vol]

Obviously there are differences, but the ACA moved the system that direction in two significant ways: mandating coverage and subsidies (both limiting costs to 8-9% of income, theoretically).

I have no idea how competitive the Swiss insurance market is.

 

[Velo Vol]

Big Supreme Court oral arguments today and no one (here) cares.

 

[McDad]

Obviously there are differences, but the ACA moved the system that direction in two significant ways: mandating coverage and subsidies (both limiting costs to 8-9% of income, theoretically).

I have no idea how competitive the Swiss insurance market is.

As we compare Swiss market to America, it is important to remember that Switzerland is similar in geography and population to TN. Compared to USA size and population, much easier to administrate, verify, and track healthcare.

 

[Velo Vol]

As we compare Swiss market to America,

Are we going to?

 

[McDad]

Are we going to?

We can. I don't know much about the Swiss. From what i hear, they have many holes.

 

[Velo Vol]

We can. I don't know much about the Swiss. From what i hear, they have many holes.

More details.

The Swiss healthcare system | Healthcare | Expatica Switzerland

 

[Biopsyman]

Guy walk into a ER with chest pains.. Try's to enroll in govt website but it is down... Dies on the spot. Get a penalty for not having insurance..

 

[W.TN.Orange Blood]

Guy walk into a ER with chest pains.. Try's to enroll in govt website but it down... Dies on the spot. Get a penalty for not having insurance..

:thumbsup: sounds legit.

 

[volinbham]

Obviously there are differences, but the ACA moved the system that direction in two significant ways: mandating coverage and subsidies (both limiting costs to 8-9% of income, theoretically).

I have no idea how competitive the Swiss insurance market is.

look into it - given the number of citizens there is a relatively high number of providers and the variety of plans (both mandated coverage and supplemental) is quite high compared to what any person in the US has access to.

As I said, the mandate is here to stay legally in this country so how do we cope? First, reduce the coverage minimums (as a single guy I shouldn't be paying for maternity coverage, fertility ought to be optional, etc.). Next, reduce the barriers to competition among insurance providers. Finally, stop the use of Medicaid as the defacto way to increase coverage among people who need help. Give them a subsidy and let them buy coverage to suit there needs.

 

[Velo Vol]

look into it - given the number of citizens there is a relatively high number of providers and the variety of plans (both mandated coverage and supplemental) is quite high compared to what any person in the US has access to.

I don't know if it is accurate, but I read a blog post that Swiss insurance policies don't price according to age--a 30 year-old pays as much as a 60 year-old. And if you look at the link above, you'll notice that basic plans are required to cover maternity care.

So I don't think the minimum required plans are as regulation-free as you suggested above.

But obviously, what should be covered is a somewhat subjective debate.

 

[lawgator1]

look into it - given the number of citizens there is a relatively high number of providers and the variety of plans (both mandated coverage and supplemental) is quite high compared to what any person in the US has access to.

As I said, the mandate is here to stay legally in this country so how do we cope? First, reduce the coverage minimums (as a single guy I shouldn't be paying for maternity coverage, fertility ought to be optional, etc.). Next, reduce the barriers to competition among insurance providers. Finally, stop the use of Medicaid as the defacto way to increase coverage among people who need help. Give them a subsidy and let them buy coverage to suit there needs.

The problem is that when you start indivdualizing the required coverage insurance product too much, you destroy the entire premise of shared risk. Where the correct line is, is debatable. But you can't have insurance for only those things for which you have highest risk, otherwise insurers cater only to the lowest risk, and no one covers people at risk.

 

[82_VOL_83]

Thanks..... Just think what a kick in the teeth it would be if a kid tore an acl like a couple of years ago. Anyone that thinks the middle class isn't getting screwed by this law is just dumb. If your combined household income is $94k and above you don't qualify for any subsidy.

Yes but you are ubber wealthy.