• My quick take on Lieberman’s WaPo Medicare op-ed

    Joe Lieberman has a few ideas about how to fix Medicare, as expressed in a Washington Post op-ed yesterday. They are, in brief:

    • Raising the Medicare eligibility age,
    • Increasing Medicare cost-sharing,
    • Increasing Medicare premiums,
    • Reforming Medigap to reduce “moral hazard” care, and
    • Increasing taxes on the wealthy.

    Lieberman claims these reforms will save $200 billion over a decade. I don’t know if he’s right about that. I do know what the Kaiser Family Foundation has said about increasing the Medicare eligibility age. There’s not a lot of savings there. What there is is a lot of cost shifting. Same goes for increasing cost-sharing and premiums: some savings, much shifting of costs to beneficiaries.

    Don’t get me wrong, asking those who can pay more to do so is one part of a solution. But there is something missing from Lieberman’s ideas, something huge. Have you noticed?

    There’s not a single word about provider reforms, about improving the quality and efficiency of care, about eliminating treatments that don’t work. That’s where the big money is. Moreover, it’s money we don’t need to spend. It’s not cost shifting. It’s real savings.

    Remember, even a great price on bloodletting is not a price we should pay.

    LATER: See also Ezra Klein’s reaction, which is similar to mine.

    LATER STILL: Want more? See Igor Volsky.

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    • I have no problem with the idea that retirees, especially those who can afford it, should face an increase in premiums, but you are correct that if we do not address actual costs, this just leads to premium increases that fewer and fewer can afford. Also, if folks like Lieberman want to raise the Medicare eligibility age, they really need to make sure there is some way for people in that 65-66 range to buy insurance. If the ACA is eliminated, how will these people obtain (affordable) insurance?

      Steve

    • http://content.healthaffairs.org/content/22/3/89.full?sid=365fcb60-3e4f-42aa-863a-51b7c48b26b5

      It has become all the rage to talk about over utilization and waste. Lord knows, there is over utilization and waste. But do we waste more than other OECD countries who spend 40-60% less? Not likely. What do we do that they don’t? We consolidate our providers, fragment our purchasers and pay the consequences in higher prices.

      • Just to save folks the trouble, the link is to “It’s the prices, stupid,” a now famous paper in Health Affairs by Anderson, Reinhardt, Hussey and Petrosyan.

    • When you compare the Lieberman plan to, say, the fantasy of Paul Ryan the Lieberman plan stands out as a good starting point. Of course everyone has to pay more, what do you think happens when health care spending increases?

      http://dismalpoliticaleconomist.blogspot.com/2011/06/sen-joe-lieberman-transforms-into-sen.html

      The raising of the age probably does not have much of a fiscal impact, given the relative good health of those 65-67 in the Medicare pool relative to the rest of the pool, so that can be modified.

      Addressing cost savings will not come until fee for service is replaced.

      http://dismalpoliticaleconomist.blogspot.com/2011/05/fixing-health-care-right-way.html

    • The critics of the raising the retirement age keep missing the boat and forgetting to mention the reforms that will come online via the Affordable Care Act in 2014. The elimination of preexisting conditions, the insurance exchanges, the medicaid expansion. They need to put down their guns and try to examine the proposal. Wow. In fact, many of these so called victims could actually be better off in health insurance found through the newly created exchanges than in Medicare itself. Some people just can’t stop hating so much they forget to think things through.

      And I don’t know where you Kaiser gets those numbers – CBO stated in March that this very proposal would save $125 billion over 10 years and reduce medicare spending by 7% by 2035.

      Still waiting on their plan.