• Support for premium support

    Avik Roy plucks out a key sentence in a story by Robert Pear filled with similar hints at bipartisan support for premium support:

    Members of both parties told the [Congressional Supercommittee] that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government.

    I believe you’d have to be an expert or a reader of this blog to see all the key distinctions among the various notions of “premium support” described by Pear. I recommend reading Pear’s piece and, as you do, keep your eye on the following questions. Not all of them are answered.

    1. Would traditional Medicare (the public option) be among the options?
    2. How would the level of support be set and how would it grow over time?
    3. How would the level of support vary by income?
    4. How would the level of support vary by health (i.e., be risk adjusted)? Follow-up for researchers: would risk adjustment be sufficient to prevent problematic selection?
    5. What constraints would exist for what private plans could or must offer?
    6. How would traditional Medicare be governed and how would that governance constrain or enhance its ability to innovate?
    7. Somewhat vaguely, how “level” would the playing field be? To what extent would it favor private plans or the public option?
    All of these questions have been addressed in one way or another in posts on this blog. It being a day off for me, I’m not going to try to locate the various posts that do so. Curious readers who can’t find what they need might ask in the comments and another reader might be able to help, or I will later as time permits. They’d likely all be under the “competitive pricing” tag, if not in the FAQ.

     

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    • You continue to bury your head in your text books and pretend that “traditional medicare” is somehow popular and public and that other proposed or existing (C and D) medicare plans are dreg policies for the unlucky few and private.

      This is not true at at least two levels:
      1. administratively, traditional medicare is just as private (or public) as non-traditional Medicare; all Medicare plans (A, B, C and D) are run by private insurers in the same manner that self insured employer sponsored group insurance works (which accounts for about half of ESI in the U.S., I beleive). The only difference is that us seniors cannot choose the A and B provider in our region whereas we can usually choose among multiple C and D providers at the county level
      2. from a market dymanics perspective, very few people (around 10%) choose the traditional Medicare that you inexplicably admire and for some reason think is a viable option. Traditional Medicare is not an option, public or otherwise. It is terrible insurance with lifetime limits, geographic restricitions, no vision/dental/drug coverage, high copays, and high deductibles. Therefore:
      — About 55% of us seniors add Gap and drug insurance or get the equivalent from an employer retirement plan.
      — About 25% of us seniors emulate that approach through a C plan.
      — About 10% of us are also on Medicaid
      State bureacracies are set up around the country to allow those at 300% to 500% (depending on state) of FPL or lower to be part of the 55% or 25% at reduced rates.

      It doesn’t matter if a Rivlin or Ryan plan were implemeted and mandated to include a “traditional Medicare” option (your first question). Almost no one buys that option today so why would they buy it in the future.

      • Please, you have badly misread me, ascribing opinions and ideas I do not hold. You must have not read very many of my posts. You have no idea what I admire.

        Independent of all the statistics you cite, with which I am familiar and have written about, 75% of Medicare beneficiaries are enrolled in what is called “traditional Medicare.” What is important about it is the manner in which it sets prices and how providers participate. In those respects, it operates differently than Part C or D plans.

    • @ Austin

      I have read most of your posts about Medicare in the last five or six months (since I signed up for Medicare). I think your post and comment about Medicare above is typical of them. You use the term “traditional Medicare” as if it is a type of healthcare insurance coverage that seniors specifically choose in a marketing sense and that that choice process aggregated might have some implications (e.g., above you say relative to pricing and provider participation but you draw conclusions about other market dynamics in other posts) for Medicare’s cost structure and more broadly for the total healthcare insurance market. You also throw in the terms public and private liberally although they really have no meaning in the administration, marketing, or purchasing of any Part of formal Medicare (A, B, C or D).

      If I am not accurately describing the foundation of your thinking on Medicare research in the previous few sentences, please correct me. I admit part of the problem is that I don’t recall a post where you specifically said what you mean by “traditional Medicare.” And you might have used the term Original Medicare or “Medicare as we know it” in a few places. But in context of other things you’ve written, I presume you mean Medicare Parts A and B when you say “traditional Medicare.”

      If that is your meaning, then your base statistics are incorrect (and therefore perhaps your conclusions).
      — 100% — not 75% — of Medicare beneficiaries are enrolled in Part A.
      — Around 90% of Medicare beneficiaries are enrolled in A and B (the exact number is not meaningful to my point but is available on MedPAC).
      — You have to belong to A and B to join C; currently about 25% of Medicare beneficiaries make this conscious (sp?) choice; this number is “important” in the sense you use the word important in your reply to my comment
      — You can join D without B (although that is becoming increasingly less common because it usually applies to someone on employer retiree insurance and retiree ESI is becoming less common); D is typically built into C.

      As I have commented in the past on other posts, you ignore the market dymanics around retiree ESI and Medigap (and other less likely scenarios). I believe those are the dynamics that are “important” in the sense you use the word important in your reply to my comment because about 90% of the people not on A/B/C choose either A/B/Medigap/D or are lucky enough to have some creditable A/(B)/(D)/ESI combo. The terms traditional, private and public are not relevant.

      • Whatever you think of my terminology and commentary, you must think the same of every published article on Medicare I’ve read, as well as with the reviewers and editors of the papers I have published. We’re all using the same terms and meanings. I don’t have a good reason to describe things any differently than do my colleagues. You haven’t given me one.

        Having said that, I know where you’re coming from on some of your points. You still haven’t completed the picture though. This is the third comment by you (that I can recall — there may be others) where you say I’ve got something wrong, describe it differently, but fail to say what the consequences are. How about you write it up and subject it to peer review or cite something that has gone through that process and that is consistent with whatever you think the consequences of your views are?

    • Dear Austin (or whoever) —

      Thanks for posting on this very interesting topic. I read Sarah Kliff’s post, and that linked me to you. I have a question that I am asking in all sincerity — this is absolutely not intended to be snarky or sarcastic. I really don’t know, and I’m hoping that someone can enlighten me.

      The premium support plan as described in Kliff’s piece, as well as the NYT article by Pear sounds very much like the plan proposed by Paul Ryan earlier this year. This was heavily criticized by Democrats as destroying Medicare, and yet now it seems that both parties are in fact becoming receptive to the proposal. Pear’s article seems to allude to Ryan’s plan indirectly, but he is not mentioned by name in the piece. My question is: how is the approach of premium support discussed in these recent article different than what Ryan was suggesting?

      • @Theodore W
        Key is how the amount of premium support is set and updated. Ryan’s was administratively set, as opposed to being determined via a competitive bidding process of some sort. The details are the essence. There is a premium support FAQ with numerous posts or search the site for competitive pricing and there is voluminous explanations/discussions.