• Some didn’t notice that Romney proposed a defined benefit

    Mary Agnes Carey and Marilyn Werber Serafini of Kaiser Health News did not understand Mitt Romney’s Medicare proposal. They write,

    But by giving beneficiaries a fixed amount of money to buy that government coverage, it is clear that Romney’s plan would move Medicare from a “defined benefit” program that pays a share of all medical bills a senior incurs.

    No, it is not clear. In fact, that’s not at all what Romney proposed. His fact sheet says he wants to

    [g]ive future seniors a choice between traditional Medicare and many other healthcare plans offering at least the same benefits. (Emphasis mine.)

    That, in bold, is exactly what a defined benefit is, or a defined minimum benefit anyway. Are Carey and Sarafini worried that private plans will offer more than the minimum benefit for the same price? I don’t think so.

    I often turn to KHN for my health policy news. This is very disappointing coverage.

    • @Austin

      Because of the lack of specifics it is difficult, if not impossible to know what Mr. Romney is proposing, and that is exactly what he wants. That way everyone can put what they want to think he is saying into their interpretation.

      That being said, I don’t think Mr. Romney is proposing what I think you think he is proposing. I don’t think he is proposing that seniors can choose Medicare exactly as it is today, or take a dollar premium subsidy and buy private individual insurance. I think what he is saying is that a person will be given a specific premium subsidiy and with it he or she can choose a private plan, or use it to pay for Medicare. But this will not be the Medicare we have today, instead it is a Medicare where the recipient pays all of the costs not covered by the premium support. And that premium covers less and less of expenses every year.

      The reason I say this is that any other interpretation cannot stand on a fiscal basis. Providing a premium subsidiy for private insurance and leaving Medicare exactly as it is as an option would explode the costs of the program. If underwriting other than the elderly as a single risk pool is allowed for the private plans, Medicare wouild suffer from adverse selection.

      If the private plans must sell insurance at the same price to all members of the 65 and over risk pool, it would not be competitive with Medicare as it exists today. Romney’s idea that competition in private plans for the Medicare subsidy will reduce costs is just fantasy. Look at the recent statistics on increases in the cost of private insurance vs increases in the cost of Medicare.

      The whole objective for Mr. Romney is the same as the objective of Mr. Ryan. It is not to reform Medicare or control costs. It is to shift costs from the federal government to recipients. This will be done by converting Medicare to a defined contribution plan, but Romney will never admit this or acknowledge this. His plan survives critcism by the confusion it has generated.

      Can I say all of this for certain? No, that’s the genius of Mr. Romney’s proposal and that’s why it is not yet a serious proposal.

      No one knows for certain what it means but the idea that it will preserve Medicare as it exists today is for certain what it does not mean..

      • Journalists should not be speculating about such things in a piece of reporting. Romney was clear about certain things and vague about others. The article I quoted directly contradicted Romney’s statement. The piece did not state that this was the authors’ interpretation. It made it sound like Romney said something he most certainly did not.

        This is a disservice to the candidate and readers of the piece. The process is best served by truth. After all, we should elect a candidate based on his actual views and statements, not misstatements about him and them.

    • The Romney website says: “All insurance plans must offer coverage at least comparable to what Medicare provides today. ” Could this mean that these plans need not cover any future technology that is not currently covered by Medicare?