I got some push back in comments yesterday for the following line on Medicare:
The delivery mechanism through which that value is transferred is window dressing…. Everything else is window dressing or mechanics to shift blame for large benefit cuts.
I want to explain my thinking on this.
Right now Medicare is effectively a defined benefit program. The defined benefit is the federal government will make ure that a Medicare beneficiary will get 83% or better actuarial value care. Right now that actuarial value is delivered by either the traditional Medicare Fee for Service System, the CMS controlled FFS derived ACO and advanced payment methodology system or privatized Medicare Advantage plans that have to offer at 83% actuarial value. Drug coverage is provided by privatized Medicare Part D plans. Additional actuarial value can be bought via either private Medicare Supplemental plans or buying up in Medicare Advantage.
If between year 1 and year 2 we see a 20% increase in the cost of providing 83% actuarial value coverage to Medicare beneficiaries, the federal government and thus society picks up the vast majority if not all of the price increase. In the second year, the beneficiary will still be able to get 83% AV coverage.
Are there smart ways of doing this? Are there different ways of doing this that optimize different value functions? Are there more and less confusing ways of doing this? Are there more and less expensive ways of doing this? Are there more and less beneficiary friendly ways of doing this?
Yes, yes, yes, yes, oh my god, yes.
And those discussions and arguments are very well worth having.
That is not the argument in the Ryan plan.
Instead the Ryan plan is switching Medicare from a defined benefit guarantee to a defined contribution. The contribution will be a calculated lump sum that in year one will buy 83% Actuarial value insurance. In normal years of health care cost growth, the lump sum will grow slower than healthcare growth. So in year two, the lump sum buys 82% AV, in year five it buys 76% AV. If there is a shock year where the health care cost growth dramatically jumps up from a trend to a 20% spike, the beneficiaries are now left holding the bag as the federal subsidy might only now buy them 65% actuarial value coverage.
The only guarantee is that a calculated contribution which is indexed to shrink in relative buying power will be made. Individuals will be on the hook for an increasing share of actuarial value and they will bear the risk of unexpected spikes in healthcare costs (they also get any upside on unexpected drops in healthcare cost growth below nominal economic growth but that does not happen in the US often).
This is how I view the Medicare fight. And it is why I am not thrilled with the voucherization and privatization framing. A Medicare Advantage only program could credibly be called privatization. A voucher that allows people to have meaningful choice between multiple private plans at the same expected individual contribution that they currently pay now could be added to this program. It might be odd, it might be a hookers and blow looting expedition. As long as there is a guarantee that a minimal of 83% actuarial value is delivered, it would be an defined benefit program delivered by private entities.
The argument is whether or not Medicare (as well as subsidized Exchange and Medicaid) are defined benefit programs or defined contribution programs.
Everything else is a detail. Those details are worth fighting about but they are secondary to the core discussion.
Baud
Not really. Even if costs go down, I don’t see a GOP government not trying to recoup those gains by reducing benefits or increasing eligibility requirements (like raising the eligibility age).
rikyrah
Keep on telling us the truth, Mayhew. Break it down!!
Expose the CON that is the Zombie Eyed Granny Killer’s Plan.
Steeplejack (tablet)
@Richard Mayhew:
I wish this was the level of debate we’re likely to get. Unfortunately, it’s miles above “Mediscare tactics” and whatever other bullshit comes out of Paul Ryan’s pie hole.
Unknown known (formerly known as Ecks, former formerly completely unknown)
So it’s like privatized vs. vouchers vs. medicaid vs. medicaid advantage is whether you get driven in a bus or a noisy bumpy old Chevy or a tractor or a bullet train, or whatever… they are more or less convenient, comfortable, or expensive… but what really matters is whether they are taking you to hospital or to be dumped off a cliff edge.
Russ
So the year of the 20% occurs and the client doesn’t have the money to pay the difference?
Mary G
Seems like they are backing off the Medicare rape plan a bit. The polls must have been a shit show. Now it’s repeal Obamacare, it’s going to be phased out in three years and we’ll get back to you on our fantastic replacement.
Richard Mayhew
@Mary G: Most of the repeal bills have the mandate getting stripped out immediately which means quite a few insurers will flee the market 44 seconds after the bill is signed unless there are massive and fully funded risk corridors and reinsurance programs in the bill.
Richard Mayhew
@Steeplejack (tablet): I’m okay with “Mediscare” tactics of finding sympathetic individuals and having them tell their stories of how they would be fucked by defined contribution Medicare
I think we need to use stories that are real, relate-able and true but they argument needs to be grounded into the reality of the difference in philosophy behind current Medicare and Trump/Ryan Medicare
MomSense
@Mary G:
Saying they will replace it after 3 years is another con. What insurers will stay on the exchange without the mandate and knowing that it goes away? By the time the enrollment period comes around we won’t have any options on the exchange. It’s a fucking sick joke.
The Republicans are just messing with our lives and livelihoods all to feed their fevered base – most of whom think they voted to keep the government’s stinking hands off their Medicare. We’ve always had way too many stupid people in our country but Fox “News” weaponized it.
mai naem mobile
Just remember the WH religious office guy under Dubbya said in their intra office meetingsthe Dubbya policy guys didn’t know the difference between Medicare and Medicaid. You have to be simple,short and stupid to reach the American people.
Gin & Tonic
Richard, my son lives in NY, which I think is an expanded Medicaid state. He’s sort of between jobs, no steady income, and in the open enrollment it seems the system recommended Medicaid for him for 2017. Is this a good choice? Once he finds regular work, what happens then, if it’s mid-year?
Barbara
@mai naem mobile: The simple stupid but basically accurate way of describing it is that it replaces the benefits you get from the government with whatever you can manage to buy from an insurance company with a few bucks thrown in from the government. Those bucks will get smaller over time, and you will no longer be guaranteed the same the benefits you have now.
D58826
OT. Der Fuhrer save 1k jobs at Carrier. The incompetent Obama admin. presided over 178k new jobs last month and unemployment rate of 4.6%. That’s what 75 straight month of job gains. IIRC better than St Ronulus the Unready.
Fat lot of good it did Hillary. A lot of commentary on what the D’s have to do differently to attract WWC voters. As long as the argument is framed by the GOP/MSM that the D’s don’t care then nothing will get through to the WWC. Hillary could have delivered a pink unicorn to every WWC voter last month and the story line would have been ‘she didn’t include a servant to clean up the poop’
Richard Mayhew
@Gin & Tonic: My opinion is get covered with what is available right now and there is not enough information to know what will be available this summer.
D58826
@mai naem mobile: And on the foreign policy side they didn’t know the difference between a Sunni Muslim and a Shia.
Ignorance has a price, often in other peoples blood
raven
@D58826: 800
Unknown known (formerly known as Ecks, former formerly completely unknown)
@MomSense: to be fair, there ARE alternatives to a mandate. For instance, you can place a rule that they are only required to disregard pre-existing conditions in certain buying periods. If you don’t buy then, and then you get hit by a bus, you’re straight fucked.
It’s a worse, crueler way to do it, that will hurt more people… but in theory it should keep the system basically alive.
Botsplainer
So I’m going to toss this one out there to supplement my filial responsibility freak out posts from yesterday.
Under the Granny Starver plan, health outcomes among the lower class (particularly seniors) decline in the second quarter of the 21st century. What the upshot of this means is the for the better situated (those with significant resources or legacy SS and Medicare, which you know will happen in some form), there are longer lifespans and a further imbalance in resource allocation to them as a result.
rikyrah
@MomSense:
No. it’s not a joke. It’s pure evil.
Juice Box
@Gin & Tonic: When your son finds a job, he should contact the exchange and update his status. Job change is considered a “life event” and he can change enrollment, adjust subsidies, etc. In the meantime, if he doesn’t have serious health issues and need to stay with certain doctors, the Medicaid should be fine.
MomSense
@rikyrah:
It is evil and they know it. Because they are psychopaths, they don’t care that people will die and/or suffer financial ruin. I really wished I believed in hell for these evil people. If anyone deserves to burn in an actual hell, it’s Paul Ryan.
D58826
@rikyrah: Saw an article (and can’t find it today) that the GOP is aware of the fact that their repeal plan will trash the insurance market. They are looking for a way to funnel billions of dollars to the insurance companies to keep them in business w/o calling it a bailout.
Not only have they caught the car but they are discovering it is an SUV and not a sub-compact.
Juice Box
@D58826: The Obama administration save 2M jobs with the terrible, terrible auto bailout where money was loaned to the big three and then paid back — i.e. socialism — while the incoming Trump administration saved 800 jobs by watching as the Indiana state government gave money to Carrier — i.e. capitalism at its finest. It’s really not hard to follow, if you make a little flow chart. Did the Obama administration do it? If “yes”, then sociwlism! Did the Trumpish administration do it? If yes, then “capitalism”! See? Simple!
artem1s
so how do Dems frame this so it will fit on a bumper sticker? Keep your short vulagrian fingers off my healthcare? This is the kind of crap they understand.
they use the same kinds of misdirection in their SS privatization bullshit. Rethugs and libertarians are convinced that privatization of SS will mean that deduction won’t be taken out of their paycheck. They think they will get to hold onto it and use it to by gold and bitcoins and buried them in their backyards. They do not understand that the money will still come out of their paycheck and will instead go into the hands of some greasy hedge fund manager so he can lose it gambling
in Vegason Wall Street.D58826
@Juice Box: yep. or the woman voting for Trump after signing up for Obamacare
Major Major Major Major
@Juice Box: I saw a piece at “even the reasonable” National Review today that expressed disgust with people who can’t see that this is amounts to at worst a bribe and at best a bailout, which is also bad.
germy
@MomSense: Pierce over at Esquire always likes to point out that Ryan collected Social Security as a youth. Family of lawyers, well-to-do, but they weren’t ashamed to collect the gubmint benefits.
germy
@artem1s:
Hookers and coke, just like the pharm execs.
Unknown known (formerly known as Ecks, former formerly completely unknown)
@germy:
Well yes, sure, you COULD look at it that way. If you were determined to be all crazy extreme liberal rabble rousing la la land, head in the bleeding-heart clouds about it.
OTOH you could equally well look at it and say, I mean, like REALLY GOOD hookers and blow.
So, hey, views differ, two perspectives, who is to say, other than, obviously the lefty one is extreme and crazy, shrill and unserious, because LEFTY.
Jinchi
@artem1s:
Picture of a skull with “Republican health care plan” written next to it.
Major Major Major Major
@Jinchi: didn’t we get into trouble with “if you get sick die quickly” for being shrill?
Humdog
Don’t forget to include rapidly rising healthcare costs because current Medicare has limits on what they will spend for different procedures. So your coupons won’t keep up with costs whatsoever. The republican healthcare plan, die quickly.
Another Scott
@D58826: It was a solid report. The WhiteHouse Blog has much more.
In a sensible world, it would be getting a lot more press than Trump’s Victory Tour and “Mad Dog” and all the rest.
(sigh)
Cheers,
Scott.
Unknown known (formerly known as Ecks, former formerly completely unknown)
@Humdog: Their plan isn’t so much “die quickly” as “shut up and suffer”. Aka “Here’s a Tylanol, now you’re on your own.”
Barbara
@Gin & Tonic: Just FYI, when he is deciding where to enroll, he might want to focus on insurers that are offering both exchange and Medicaid plans. If there are any plans that do, and if those plans look decent, enrolling with such a carrier might limit potential disruption when he does obtain employment, if the employment does not offer its own health coverage. The exchange plan would already have his enrollment and other personal information and could make a more seamless transition.
Barbara
@Unknown known (formerly known as Ecks, former formerly completely unknown): I would say this: for someone who sees most people as takers with only very marginal utility, he simply doesn’t see why we have to let them take even more after whatever marginal utility they had has expired. This is from me, who actually does believe that a lot of health care dollars are poorly spent and don’t really help people all that much. But perversely, Ryan would actually stop whatever efforts are being made to direct health care dollars more usefully and efficiently. It’s bizarre to think that people like Ryan and Price idolize physicians as makers but think that the people receiving their services are basically parasites.
Hoodie
Still think this Medicare phaseout threat is a diversion to allow SS to be looted by Wall St.
daveNYC
@Juice Box: Don’t phrase it as Trump saving 800 jobs, say instead that he failed to save 1300 jobs.
Pablo
@Russ: He or she dies.
Raven Onthill
I think there is broad plan to impoverish the vast majority and this is the next part of it. The people who cannot imagine a world which they do not rule are making policy.
Raphael Kearns
Fortunately, I’m retired from the US Navy so I have Tricare for Life. I’m 68 and have been generally healthy but I would hate to think I would have to go out there and find some sort of health insurance to purchase that gives me the benefits I have right now with the minimal cost I am presently paying. My Part B premium which is deducted from my Social Security check.
I’ve had a few procedures this year. A Moh’s surgery for a skin cancer and another skin cancer excision. My daily medications and my other doctor visits. I’ve paid $0 additional out of pocket.
I don’t think I would be looking at the same situation when Medicare is destroyed by those m’fer’s.
RealityBites
How about protests, YouTube videos, Twitter storms, etc, based on a slogan such as hashtag “won’t lie down and die” with hundreds or thousands of stories of people who will die soon if they loose coverage? Or protestors acting out fake “arrests” of Ryan and other Republicans for “attempted murder”. Have health professionals estimate how many people will die or will be severely impacted by repeal. The numbers will be shocking. Kill, once and for all, the stupid idea that sick people can just “go to the emergency room”.
Other good opportunities exist to insist on no repeal until a “better” replacement is ready. Get friendly Senators and Representatives to help with the information campaign. EVERY time Ryan (or anyone) tells a health care lie, he should be challenged IMMEDIATELY. (Example: “Speaker Granny Starver, the truth is that the ACA has not hurt Medicare, it has actually HELPED extend Medicare financing for 11 or 12 years. When we are considering changes that will impact the lives and healthcare of millions of Americans, we must base our arguments on facts”, not your lies and propaganda.”)
Also have a big push to get out information about how the ACA has had other economic benefits. Compare Medicaid expansion areas with non-expansion areas. Talk about saving rural hospitals and better access to health care for everyone, not just people covered by the ACA. Talk about people who could leave their old jobs to start a business or work part time and care for sick family members because the ACA gave them health coverage. Put their stories out there, too.
Constantly complain about the media letting the lies pass unchallenged.
It has to be push back, push back, push back from everyone on every front.
(Speaker Granny Starver, Republicans have promised a replacement plan for six years. Why should we believe you will come up with one now? Or Speaker Granny Starver, the most important part of your job is passing a budget. You haven’t done that. Why should we believe you are competent enough to come up with a viable replacement plan? Maybe you should demonstrate that you can perform the basic functions of your job before you screw around with life and death decisions about people’s health care and the economic viability of our communities?)
The Republican plans are based on lies. If we can find attention getting ways to call out their lies, over and over, we might win. Find credible spokespeople, use EVERY type of social media, organize protests, have web sites with accurate information for the general public. Talk about the economic consequences as well as the human ones. Organize. Attack the media for not doing its job. Attack it again. Faxes, phone calls, petitions, fund raising, find out if medical charities and other nonprofits will come out on our side. Be inventive. Give what time and money you can. Work on effective strategy with supportive elective officials and public figures. Make plans and follow them. Be organized. FOLLOW THE MONEY. Use humor. We must somehow take control of the narrative.
We must call out EVERY lie EVERY time. They have lies and greed. We have the truth. But the truth won’t do any good if we can’t get it out.
End of rant.
?
goblue72
The antidote to propaganda is not truth. The antidote is better propaganda. Dems got spanked by P.T. Barnum and still don’t realize what happened. You don’t win because you are right. You get to be right when you win. Kellyanne Conway got to be put up on stage at Harvard, wag her empty head around and sneer at people 10 times smarter than her. And then go home to work at the White House while the smart set ate stale doughnuts.
There’s nothing wrong with framing this as driving seniors up to a hospital, kicking them out onto the curb and telling them “good luck, you’re on your own. And here’s a coupon for half off your next milkshake at McDonalds.” What did the GOP get for their death panels screeching? A House majority in 2010, that’s what.
You would think we’d learn something from making this more complicated than it needs to be. Save the technocratic babble for your next insurance company convention. The Rube Goldberg device of the exchanges was a shitshow from day one to anyone with half a brain. Building a better Rube Goldberg device for Medicare is not the answer. The answer isn’t better tweaks. The answer is ” Fuck you. Get your fucking hands off my Medicare. You want to improve Medicare? Expand it to everyone.” You’re a great wonk. But you’re a shitty hack.
Medicare – you see it come out of your paycheck on your paystub. It just happens and you don’t have to think about it. Somebody else takes care of it – like that lady in HR or something. And you know, when you turn old, you will go to some office, sign some papers, get a card and then whenever need to go to the doctor, you just go. And Medicare pays for most of it and you don’t have to worry about it because your Mom is on Medicare and she likes it. Simple, easy, no headache, and it works.
Compare that to the Exchange bullshit which you need an MBA to even have a halfway decent shot of picking the “best” plan – and the whole experience winds up being most akin to the experience everyday Americans associate with filing their taxes. And after you go through the whole thing, you may wind up not even being eligible for any meaningful subsidy, because hey, you make enough money to take the family out to the movies once a month so you aren’t that needy. (Which is probably EXACTLY like filling your taxes for middle class taxpayers.)
The increase to the Medicaid limits was great, awesome, fantastic. Biggest income redistribution from the wealthy to low income households since the expansion of the EITC. From a social justice perspective, aces. I’m a YUGE fan. Everybody was obsessed with the Exchange/mandate/etc crap and Obama done snuck in Medicaid expansion as the biggest piece of the whole ACA. Sneaky Chicago machine bastard, I could kiss ya! The rest of it – the part that might benefit middle class households (aka – people who actually vote) – well, not so much. And it was complicated and opaque just to wind up with “meh, not so much”.
Unknown known (formerly known as Ecks, former formerly completely unknown)
@goblue72: love this, and would totally agree… IF the key to getting it into law was winning a referendum on it. But it wasn’t. It was getting it through the senate sausage machine. Different ball game. Hackery helps that one, but it’s not everything
Riggsveda
My husband worked for years under a defined contribution plan. When the Great Recession hit it was only my wonky attachment to economic blogs that saved us from losing all that money. I, however, am retired under a defined benefit pension. My pension survived that recession intact. So your explanation re: Medicare makes complete sense to us, and we thank you for it.