• The Political Failure of a Good Idea

    My Kaiser Health News opinion column is posted today. It begins,

    Few Americans should be satisfied with the way the government pays private health insurance plans that participate in the Medicare Advantage program. Taxpayers pay 14 percent more to insure a beneficiary through the Advantage program than through traditional, fee-for-service Medicare, the program’s “public option.” The new health reform law–the Affordable Care Act–will reduce, but not eliminate, the additional payments to Advantage plans. Medicare beneficiaries are concerned about the reductions in Advantage plan availability and generosity that will result from those payment cuts.

    It then continues to explain how a competitive pricing payment system–the one that would have been established by the Senate health reform bill–could address concerns of both taxpayers and beneficiaries. Sadly, such a system was only law for a week. The budget reconciliation amendment replaced it with administrative pricing, the very type of system that has caused so much trouble in the program.

    Interested? Read the whole thing.

    • Thanks for following up on the competitive bidding issue. It would have been interesting to see if they really could consistently get prices below conventional Medicare. I am betting that they would end up about 5%-10% higher secondary to higher admin costs, but we will never know.