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.