Medicare proposals analyzed by D13.
I tried to be as unbiased as I could in comparing the two programs and this is what I came up with in my research and my own pencil and calculator, to which I say that I can and will be more accurate than the supposedly independent (cough cough) CBO.
The Wall Street Journal defines it best: “To make the Medicare program fiscally sustainable, reform must: (1) place limits on spending growth and (2) change the program to hold actual spending growth to these limits.”
D13: This makes perfect sense to me in that it matters not how much you tax. You can tax 100% and never pay for health unless there are limits and there are spending controls.
“There are two major approaches to achieve these ends. On April 6, 2011, House Budget Committee Chairman Paul Ryan put forth a plan that transforms Medicare into a marketplace of regulated, private-insurance policies with government-provided support for insurance premiums. On April 13, 2011, President Barack Obama proposed an alternative that retains the program’s current structure with the overlay of a new, centralized bureaucracy.”
D13: In breaking this down, I see that there are simply two fundamental approaches here. The Ryan proposal simply is putting more of the market into the system designed around the successful Part D of the Medicare program. President Obama’s approach is exactly what it says….”centralized government bureaucracy.” This is what it all boils down to…….fundamental changes in direction. One is market oriented and one is government control….in either case, what we have now is not working. Both plans place limits on spending growth that are far below that projected under the current Medicare law. The most important difference between the plans is their approach to containing spending within these limits.
WSJ reports: The Ryan plan builds on the approach of the Medicare Part D prescription drug benefit, which has been widely recognized as a success. It encourages competition among private insurance plans and provides incentives for cost-conscious choices among plans by beneficiaries.
The Obama plan would empower a new Independent Payment Advisory Board (IPAB) to analyze the drivers of excessive and unnecessary Medicare spending and recommend policies to Congress to limit it.
D13: Here is how I see this particular item. The market approach, as Part D currently does, has an immediate effect. The prices for prescriptions in this plan have fallen an average of 45%. I can personally attest to this using my own parents still living. Their prescription costs have fallen almost 60% and are almost comparable to Mexico. It seems that this model has worked and I see no reason why this approach would not work with the rest of Medicare. I see the centralized board not working in the immediate future and recommending policies to Congress is like asking the fox to guard the hen house. It will stall and go nowhere as is proven right now and there will be no cuts nor savings. Ryan’s approach would be more effective. The Center for Economic Research says, “It vests ultimate responsibility for cost containment with individuals and families, who have a more limited ability to spend beyond their means than the government. It commits the government to spending a specific dollar amount, rather than an amorphous promise to eliminate unnecessary care—a promise that has been made and broken by politicians many times before. Without a credible commitment to cost control, the incentives of doctors, hospitals and patients will be to spend more and more.” With this I have to agree.
The WSJ says: “The Ryan plan has other advantages. It would result in better health services for each Medicare dollar because it uses market prices to allocate resources rather than a government-determined fee schedule. Politically determined prices cause too much spending on some items and too little on others.
D13 concurs in this assessment. Any time the market can work is always best IF that market is allowed to do so unfettered with government regulations. In addition, D13 points to the Medicare Payment Advisory Commission (MedPAC) in a research that was done in the years of 2008 thru 2010, in that, “Medicare’s overpayment for imaging services contributed to rapid spending growth. Although the new health-reform law seeks to address this problem with the IPAB, there is little reason to believe that it will succeed substantially better than MedPAC, which was created in 1997 in part to insulate Medicare policy from political meddling.”
Further research suggests the following: “Finally, the Ryan approach would better protect older beneficiaries and those with poor health or low incomes. Such protections are implicit in the Obama plan, which simply promises not to harm access or quality of care. But they are explicit in the Ryan plan, which would give older and sicker beneficiaries a larger premium support payment and wealthier beneficiaries a smaller one.”
D13 agrees here as well. The main reason is that any plan that is explicit allows for future planning and organization. I read the Obama plan very carefully trying to find where this conclusion is not applicable and I could not find one. Nowhere is the Obama plan explicit. It only “promises” not to harm…etc. It does not say how….anywhere. I do not have to piss into the wind to know it is not the thing to do. In addition, Centralized, government-run insurance systems faced with resource constraints ration care by restricting eligibility for treatment. The Independent, a London newspaper, reports that cataract operations in Britain’s National Health Service are being withheld until patients’ sight problems “substantially” affect their ability to work. Hip and knee replacements are only being allowed when patients are in extreme pain. It seems to me that this is rationed care and a forerunner to the so called “death panels” and it seems that this unfairly hits the elderly. IF you withhold anything until the pain becomes unbearable…is this not a quality of life issue? Are you not forcing someone to suffer needlessly? If a panel can do this……they can certainly withhold treatment on a terminally ill patient or deny treatment to someone “who will die within a year anyway”. (That is a quote).
The WSJ and the CBO concur in the following: “There are also differences between the two plans in how they set limits on spending growth. The Obama plan starts limiting spending growth earlier, in 2014, rather than in 2022. It caps spending per beneficiary at the rate of growth of GDP per capita plus 0.5%, while Mr. Ryan’s plan caps spending per beneficiary at the growth in the consumer price index. As a result, in later years the Obama spending growth rate is likely to be slightly higher than the Ryan plan’s, with the difference contingent on the growth rate of real GDP per capita. For example, if per capita income growth in the United States is 1%, then the Obama plan would increase Medicare spending by 1% more per year than the Ryan plan.
D13: The numbers tell the story. I have nothing to add.
Conclusion: I think that the Ryan plan is over all better for the economy and the medicare program other than just austere cuts and higher taxation. The other thing that is being reported by the msm is that the Ryan plan throws granny off the cliff. It does no such thing. Anyone that is already on Medicare will continue to receive it with no changes and all those whom qualify in the next ten years will receive it with no changes. Under 55, gives everybody a chance to change for the future. The current plan is not sustainable even if you taxed everyone 100%. The numbers show that it is not there. There must be substantial change and the government is not the way. The FDR days need to be thrown in the can. They are out lived.