Liberals, like Bernie, make the mistake of assuming that Medicare is great insurance. It’s actually very outdated and a little crappy.
— Matthew Martin (@hyperplanes) November 18, 2015
As the Democratic primary season actually starts to heat up anywhere other than in the households and computer screens of political junkies of the Democratic Party, here is a public service announcement:
Medicare is decent insurance but not great insurance. It’s actuarial value is roughly 84% on average, and there is no limit on total exposure of individual costs if a person runs up a million dollar claim. There are some odd limitations on benefits and services, and there are significant barriers to integrating non-medical services into the payment schema to reduce total medical spending while also improving quality of life. Medicare is vastly superior to the next best alternative for a 77 year old but it is not an optimal insurance plan.
And now that I’ve thrown that hand grenade into the discussion, let’s also have a civil conversation of Mac vs. PC.
Not to get all death panel and all, but there is often not a big value to spending $500000 to give someone another four weeks of life hooked up to a machine. Changing it to full coverage without question creates a scarcity of resource issue.
Sorry I crushed your post! I swear it wasn’t in the hopper when I looked just moments before publishing!
Regarding Medicare, I’m sure the plan design could be improved, but what makes it superior to private market alternatives is that it’s taxpayer funded. I think when people advocate “Medicare for All,” their main point is that we should eliminate the waste, greed and inefficiency of the private market and treat healthcare as a right instead of a luxury for those who can afford it. And they are 100% correct.
2 unrelated comments. The first is about healthcare. A little bit ago (an hour) the headline on CNBC was that United Health Care was downgrading its earnings forecast and blaming it on the ACA . And they might even withdraw from some of the public exchanges. So, that converts into the headline that “Obamacare has received a major blow! ” .Any explanation? Are the public exchanges found in all the states or just in the ones that expanded Medicaid? In my state, UHC is one of the few ones on offer, along with BCBS, and the state didn’t opt-in to the Medicaid expansion.
Also, thanks to Tommy or whomever for the gray background. Much easier on the eyes. Still don’t like all that wasted space at the top when one is on the “home” page.
@agorabum: That is a discussion we need to have a society. Right now, our social decision is to ignore resource constraints and pump the drug in (see death panel rhetoric, see the limitations on comparative effectiveness research, see the backlash against HMOs in favor of open access PPOs etc)
But if that person who is line to get a $500,000 treatment for 3 more months of low quality life is on an Exchange or Employer sponsored plan, there is no significant cost sharing (assuming plan is not grandfathered) while Medicare has cost sharing (20% co-insurance if not a Part D drug, 3% coinsurance if Part D drug)
Significant discontinuity in health policy now.
@Betty Cracker: No worries, this was a placeholder until something more substantial like your post came along.
I would also hope that putting everyone into Medicare would help to produce the political pressure needed to fix some of its problems. One of the things that makes single-payer systems work politically is that everyone is in the same situation, so it’s more politically rewarding to improve the system than undermine it. This is a big reason I hate the idea of means testing any of our social insurance services like Medicare or Social Security. It divides people into recipients and non-recipients, and the non-recipients have a vested interest in gutting the system to keep their taxes low and/or divert money into programs that benefit them personally.
Hey Richard – any thought about UHC floating the balloon that their decline in profits is due to “Obamacare” and they may abandon the exchanges?
(Honestly this sounds to me like excuse-making from a CEO who doesn’t know how to turn a profit unless he’s screwing over customers, but perhaps I’m just a cynic and there really is something about the exchanges that make them inherently an unprofitable setup for insurers.)
“Medicare for all” is an easily understood slogan for a popular policy. Since it would still leave us with the worst plan for universal health care in the developed world, we ought to keep working to popularize something better. I’d like a national health service, but at a minimum we should keep noting that fee for service has many drawbacks that have to be addressed.
Hey, Richard. Is there data on what percentage of Medicare enrollees also buy a supplement plan? If so, what the average actuarial value of that is?
The Gray Adder
@Betty Cracker: And you can still get gap policies of various kinds to make up for Medicare’s shortcomings. These policies tend to be reasonably inexpensive (or maybe I’m still living in the 1970s when my grandparents were still around – did you see Bob’s new Pontiac? What a boat!).
I’m on Medicare with a Supplement Plan (F) and a drug plan, and it’s awesome compared to my former employer coverage! Yes, it costs me money for the supplement plans, but I can go to virtually any doctor of my choice, here or elsewhere, and not pay a penny in most cases. Under my employer coverage, we had a high deductible (even back 5-6 years ago it was around $3500 a year), plus co-pays, and a limited network.
Vision and dental aren’t covered under supplement plans, but everything else that’s happened to my husband or me has been covered and we’ve had no problems with billing errors between Medicare and Blue Cross-Blue Shield even with some fairly major medical events in the past few years.
Even the salesman for the only “Advantage” plan in our area said that IF you have known medical issues, and IF you can afford it, a supplement is the way to go. Advantage plans work well for those who don’t have significant medical issues, but when you’re over 65, you never know when you’re suddenly going to encounter one.
Medicare is also not the only option for a lot of people – This of course comes back to wealth and resources, but many people have supplemental plans to cover all or a portion of the piece that Medicare doesn’t cover.
My dad, for instance – as part of his excellent retirement package (those were the days!) got health coverage “for life”, in addition to his pension (sigh). So when he turned 65, his full blown health coverage turned into a Medicare supplemental coverage plan. My stepmom, who is not yet at Medicare age, still gets covered as his spouse under the “full” plan (they pay for her to be on the plan as is typical with any family coverage, but it’s cheaper than buying insurance out in any market). It’s quite nice, and I’m quite jealous of them both.
(This same health coverage also saw my mother through 7 years of significant cancer care at MSKCC.)
No, you know what’s REALLY crappy? A profit-based healthcare system that allows a few to reap obscene profits at the expense of the many.
Medicare is “crappy” compared to what? High deductible plans? Narrow networks? I don’t think so.
My husband has Medicare and he has Tricare-for-Life as his supplement AND his part D. He has premiums for Medicare but no premiums for the supplement or the the part D. 30 years combined active duty and reserves did get us healthcare in our retirement. Thank FSM
But he has never had a problem finding good primary care providers , specialists, labs, testing, procedures or hospital care under Medicare.
We had a harder time finding providers under his employee-sponsored health plan (Blue Cross HMO) before he retired.
@sam: I’m one of those people who will have this excellent coverage when I retire. As a federal employee, I will get Medicare as my primary payer with my FEBHP plan as the secondary. This means I don’t need a supplemental plan as the former health plan I had will cover pretty much everything that Medicare picks up unless I can get a better med plan through Medicare. The rules are a bit complicated.
Umm…look up the South Korean health plan sometime. They pretty much all operate on a public/private split because there are many things the Korean UHC won’t cover. And if you don’t have that, you’re pretty much screwed.
@dnfree: This. The reason I am one of those who will give up my Medicare only when you pry it from my cold, dead hands is that it is so far superior to anything else I’ve ever had. I pay a fortune for a pre-65 (disability) supplement plan F (nearly $500 a month) but I can see almost any doctor I choose and pay no deductibles/copays and no gatekeepers looking for loopholes to deny or delay any care prescribed. There are a lot of stupid rules clumsily applied in response to waste, fraud, and abuse (Hoverround has a lot to answer for), but compared to private insurance it is solid gold.
Good point to mention the HUGE difference between the “advantage” plans versus straight Medicare plus supplement.
In this case, “advantage” is one of those words that really means the opposite. With Medicare HMO plans (advantage plans) the networks are narrow and highly managed. I would not recommend choosing one if you can afford the regular plan plus supplement.
There is not a single government program that could not be improved.
However, in this America we inhabit, (to quote our blog host) the debate usually is pitched between wanting more sauce on the pizza, versus anthrax and tire rims.
I’ll stick with the dry pizza, thanks.
My mom(now a wingnut) complains about Medicare all the time. I usually start saying sarcastic things about how private companies are just champing at the bit to cover a 74-year-old who’s had chronic auto-immune disorders since her 20s, but it doesn’t make a dent.
On the other hand, she talks about how hard it is to find a local doctor who will accept it, and she’s right. In her small town I couldn’t find anyone (online) taking new Medicare patients. And there’s a major retirement community in the next town over. How do people move to retire to (said neighboring small town) when the only hospital is a half hour away and no doctors are taking Medicare?
What the hell does “outdated” mean in the context of a health care plan? Needs moar megahertz? I hate buzzword critiques.
@JustRuss: I agree. Saying that Medicare is ‘outdated’ is a little like JoeK lines’s assertion that Social Security is such an outdated industrial age 20th century paelolieral dinosaur. After many people asked him what he meant, and Dean Baker noted that just because an idea as been around for awhile (like in arithmetic, that 1 + 1 = 2), doesn’t mean it’s a bad idea.
Klein had nothing to back up his statement. It was just name calling disguised as policy analysis.
And I agree that ‘crappy’ doesn’t mean much either. ‘Crappy’ compared to what? If he means ‘crappy’ compared to the best commercial insurance policies that a relatively healthy group of adults can get, then ‘crappy’ means nothing, since the elderly are never going to get that. Or, more likely, they might get a policy that starts out that way, but after a few years the initial risk pool is going to fall apart, those elderly will get truly ‘crappy’ or nothing.
@agorabum: I don’t think the numbers support the idea that very old elderly people clinging on life support is a big source excess expenditure in the US.
Local insurance and provider monopoly or oligopoly market power and pricing is probably more important. Patching people up when they enter Medicare due to under insurance or no insurance during older adulthood, or patching up people who have supposedly good insurance that is really under providing care in order to skimp and keep them just patched up enough to hand off the cost to Medicare after their 65th birthday is probably more important. Older adults with chronic disease, who are robust enough to withstand very expensive medical and surgical intervention, and can survive for a couple of decades of those are probably more important.
And if Medicare is ‘crappy’, then the question is why did population health in Australia, for all age groups, improve to be among the best in the world, after that country adopted a Medicare for all population? And how did they do with a supposedly crappy system that costs less than ours?
Regrettably, any significant effort to “reform” Medicare will enable Republicans to all but eliminate it. It’s just a fact of today’s political climate. I’d rather have today’s admittedly imperfect version (which has served me well for 8 years and counting) than an uncertain alternative. And my advance care directive, which I’ve discussed with friends and relatives, explicitly excludes the Hail Mary efforts at the end of life that cost so much, both in dollars and suffering.
pseudonymous in nc
Just because something is called Medicare doesn’t make it identical to the US Medicare for old people. It’s not a like-for-like.
One fundamental problem with (US) Medicare is that it’s treated as the feast after the famine, so it attracts all kinds of scammers and skimmers and outright fraudsters, and policing against the skims and scams has its own cost.
It’s not great insurance but it’s better insurance than lots of people have had to deal with. And the fact that it’s there without question or argument matters.
@Me: I’m on Medicare and have never been turned away. Lots of doctors won’t take Medicaid patients, but none refuse Medicare patients. I live in a very red Southern state.