• NYT editorial: “What About Premium Support”

    I may not have written it exactly the same way, but I think the New York Times editorial on premium support is quite fair and reasonably complete. Given its brief length, they did a good job, particularly here:

    The best proposal for premium support is one that gives beneficiaries choice while protecting them from any added costs if competition does not keep prices down. Enrollees would be given a set amount of money to buy a plan comparable to what Medicare now provides. If they chose a plan that cost less, they could pocket the difference. If they wanted better benefits, they would have to pay the added premium themselves. But if market competition failed to restrain costs, the federal government would increase the support given. So far, this idea has found no support among leading politicians, who apparently have less confidence in market forces than they claim.

    Still, I will quibble. The last sentence ignores Rep. Hensarling’s endorsement of the Domenici-Rivlin plan, which is of the type described in this paragraph.* Hensarling was a supercommittee co-chair. Can’t we call him a “leading politician”? Also, reading the paragraph strictly, it is indistinguishable from the current version of Medicare (Romney’s vision is similar), which is not a form of premium support I would call “the best proposal.”

    The one thing I wish the NYT editors had mentioned, and it would have only taken a few words, is that there is no reason to exclude traditional Medicare and the payment reforms planned for it from any premium support program. Among the biggest misunderstandings out there are that “premium support” means “private plans only” and that it is the antithesis of the IPAB, ACOs, and other payment innovations. Wrong and wrong.

    * Yes, it included a GDP + 1% cap on top of a premium support plan that is precisely as described in the quoted paragraph. But that cap was for CBO scoring purposes since that office apparently is unable to score competitive bidding. This, by the way, strikes me as a major problem going forward.

    UPDATE: In my first reading, I inferred more than the NYT actually said in the quoted paragraph. The post has been updated to call them out on the vagueness.


    • When will you, and everyone else for that matter, stop using the term ‘free market’? There has never been, is not now, nor will there ever be anything such as a free market. When the free market builds private interstates, water supplies for all, schools for all, and the rest of the infrastructure supporting this country, then we can use the term free market. Until then? Must not use.

      And this is especially true in the field of health care and health insurance. The government’s hands are in everything. The only true question is how much government intervention do we want/need? Moreover, if private companies could have slowed down and/or reduced healthy care costs, we would have seen that by now, don’t you think? Sort of along the lines of the jobs that tax cuts are supposed to create after thirty years of cutting taxes….As a country, we will get serious about cutting health care costs when we get serious about cutting the income of all those parties involved in health care. Of course, that is never going to happen. You know it. I know it. All those involved in health care know it. The poor insured’s cost of health care will no doubt grow but if we never cut the income of those providing the services, we will never cut the cost of health care. Yet, we never really hear about that. Funny isn’t it?

      Why do doctor’s get paid so much here in the US compared to other countries? Why does virtually everyone in the system get paid more than those in other countries? Why are the rest of us forced to pay for such differences?

      More to the point; why is it so hard to understand that unless you consciously CUT the cost of care, it will always go up?

      • Please find an example on this blog where I use “free market” and don’t either put it in scare quotes or qualify it as you did. The word “free” doesn’t even appear in this post. When will you stop making stuff up?

    • This comment on the editorial is a very good eplanation of important distinctions. Thanks very much.