Ryan Wyden Psychosis
In this must read post Ezra Klein asked Ron Wyden and Paul Ryan for evidence that forcing the CMS (Medicare/Medicade) to compete more with private insurers can be used to reduce health care spending. The logic must be that the private sector is better able to control costs so private insurers can insure for less, and, if they must compete, will do so.
They answered* pointing to competition in the Federal Employee Benefits Program. Klein counters noting that costs have risen as fast for the FEBP as for employee health insurance plan which don’t ask employees to chose between competing offers. Note those other plans, the ones without competition, are mainly used by private profit maximizing firms.
To support their claim that private firms are better at controlling costs than the Federal Government, they pointed to a Federal Government program, and just assumed that it is more efficient than the approach taken by profit maximizing firms. So the proof that the private sector can do it better than the Federal Government is based on the assumption that the Federal Government must be doing it better than the private sector.
It pained me to type Wyden in the title, because I think he is responsible for the best contribution to the national policy debate since Martin Luther King had a dream
OK so he really sincerely hates employer provided health insurance, but the evidence does not support him, and the guy licking the cake was under 65 and not stuck with Medicare. Also what Albert Einstein said about Medicare Advantage and Ryan-Wyden (and Ryan-Rivlin — who has ever fit his definition of craziness better than Ron Wyden ?).
I am only posting this, because I have been very remiss about posting this semester (I’ve actually been teaching).
* Yes I am envious as all hell that someone half my age can get an answer out of a Senator and the chairman of a major House committee. Given how much work each of us has done on the topic I conclude that life is just soooo uh fair. I hate that.
update: OK so I tend to get stuck on youtube. But you really really have to watch this arabic language McDonalds ad. To understand Arabic views of US capitalism, gender relations, Big Macs and Meat Loaf, … oh hell just watch
update 2: The second video is relevant. Part (estimated at one seventh of the extra cost or 2% of total costs) of the reason that Medicare advantage csts more than ordinary CMS Medicare is that the plans do offer advantages to subscribers. They have to do this, because participation in Medicare Advantage is voluntary and Medicare Advantage is competing with Medicare which has the strongest brand in the USA — much stronger than McDonalds or Coca Cola or iWhatever.
Several years ago I got curious about the government employee plans (Andy Harris was my critter from MD). These two links cover premiums from 1997 to 2011. Unfortunately they don’t show changes in deductibles, co-pays, etc. In this window of time new designs were added like the health savings account, high deductible, and other combinations. The result was that the existing previous plans experienced extremely high increases in premiums. I imagine the younger employees voluntarily depooled from the older causing this.
Anyway, the plans are a lot more expensive than people think. I looked at one of the recent benefit brochures of one of the non-profit FFS (PPO) plans. There is a fairly high deductible, co-pays, co-insurance payments, and the family catastrophic is $7000. Additionally there is a separate deductible and limit for drugs. Per month the government pays $875 and the employee pays $416. (It looks like the worker pays a bigger share than people think they do, at least for the more expensive plans.)
Critters are becoming brain dead. They need to increase the staff budgets and get some smart people on board, ones that do something other than fund raise all day. Even the cheaper plans in the federal system are costly. (Scan the total monthly column in these two files for 2011:
The first one is the FFS type plans and the second is the HMO type plans. Who can afford the total monthly cost of these? I imagine that without the employer subsidy even federal employees would feel straped by it.)
I think the plans are made deliberately confusing. Choice is a euphemism for deception. If people knew how sick or healthy they will be they could know what is the best insurance plan for them, but none of us can know. The lowest premiums can be quite costly and how much overhead does it take to just sort all the different policies? Doctors must hire more people just to deal with the insurance jungle.