Tuesday, August 14, 2012

The problem with Ryan's Medicare Plan....

is that no one can make money selling health insurance to elderly people.  They get sick too often.  Every year a bunch of them die after running up big medical bills.  Just to keep a 75 year old person healthy costs a lot of money in doctor's visits, drugs and preventative maintenance.

The Ryan plan gives seniors a voucher to buy insurance on the open market.  It is a massive government intervention in the health insurance product.  It creates a market for an inherently unprofitable product.

Every insurance company is going to want to collect as many of these voucher checks as possible.  Every senior is going to have one and it will be worth thousands of dollar.  But once the insurance company has the customer, the only way to make money is to minimize the care that senior gets.  The result will be empty shell insurance plans:  the best thing about the plan is the advertisements.  It turns out that all sorts of unexpected things are not covered, and that the reimbursement rates are low. 

After a while, the insurance company will cancel your coverage.  Even with the voucher, they will start losing money on some people.  Those people will go on the traditional Medicare system.  However, the health care costs of the people on Medicare will be rising very rapidly; after all, the sickest seniors are on it.  Some bright young GOP congressperson will be being praised in DC for having the courage to "tackle the tough questions about runaway Medicare costs."  A new privatization plan will be offered with even bigger checks to the insurance companies.  In the meantime, traditional Medicare will be a cheap dumping ground for sick and poor elders, with low reimbursement rates for overcrowded doctors and lesser hospitals.

Once a person gets even sicker and needs constant care, then a person moves  into Medicaid for long term nursing care.  But Medicaid will have been shrunk so much that many of us face a future of being warehoused in low quality nursing homes.

Now it may be that many of these abuses by insurance companies will continue to be curbed, under Obamacare.  But if GOP has the votes to pass the Ryan plan for Medicare, you can be sure that Obamacare will be gone too.  

2 comments:

Joel Monka said...

This is part of what Pulitzer Prize winning fact checker "Politifact" rated as "Lie Of The Year 2011". "They ignored the fact that the Ryan plan would not affect people currently in Medicare -- or even the people 55 to 65 who would join the program in the next 10 years." http://www.politifact.com/truth-o-meter/article/2011/dec/20/lie-year-democrats-claims-republicans-voted-end-me/

Tom Schade said...

Joel, I am aware of that, and my post does not make any contrary claims. The situation it describes is what those who are now under 55 can expect when they get older.

Of course, if the Ryan plan was actually better than traditional Medicare, he would have not delayed its implementation but offered as soon as possible.

The whole point of the Ryan Medicare plan is that it reduces benefits for recipients AND provides an opportunity for private insurance companies to try to profit from this portion of health care consumers.

Ryan knows its a benefit cut, so he phases it in over time to avoid the political heat.

The tax cuts, you will notice, benefit today's wealthy immediately.

Do not bring that kind of mendacious GOP talking point here again. We are not so easily bamboozled.

Politifact hangs their specious "lie of the year" on the slender reed that a statement of a proposal's effect while in the present tense, can actually refer to a future event -- which is a common English syntax.

For example, if I say "David Ortiz is playing for the Red Sox" it is still true even if I say it on a day when the Red Sox are not playing.

The Ryan plan abolishes Medicare as we know it, a true statement, even if it does not take effect for 10 years.