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How Medicare and Medicaid helped health-care reform

One of the oddities in the funding debate over health-care reform is how reliant Democrats have been on areas of waste and overpayment. Pulling Medicare Advantage back to the funding levels of standard Medicare, for instance, is netting them between $100 billion and $200 billion (depending on the bill). Instituting reforms like bundled payments that we should've done years ago is responsible for tens of billions more.

In some sense, HCR is ruthlessly exploiting years of bad, or at least inattentive, Medicare and Medicaid management from both parties. That's even truer when it comes to the arguments that the bill has the potential to cut costs, as much of that potential comes from things we know need to be done, but we haven't had the political will to do. That, of course, is the whole theory of the independent Medicare Commission. But it leaves us with the odd conclusion that a political system where Medicare and Medicaid were better managed would be a political system where health-care reform would've been a lot harder.

By Ezra Klein  |  December 1, 2009; 9:55 AM ET
 
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Comments

If you tune into CSPAN-2 right now you can hear the Senate Minority Leader lying on the Senate floor. He is claiming seniors will see their Medicare benefits cut, which is blatantly false. There are Medicare savings in the Senate bill, but there are no benefit cuts. The savings come from cuts in payments to providers, not in cuts in benefits. McConnell is blatantly dishonest.

Posted by: OHIOCITIZEN | December 1, 2009 10:22 AM | Report abuse

Praise Allah for corrupt, inept, mediocre bureaucracy, eh, Klein? If it weren't so bad, you couldn't try to make it worse?

Posted by: msoja | December 1, 2009 10:43 AM | Report abuse

ohiocitizen,

when cuts to Medicare Advantage happen and prices skyrocket so much so that insurers then offer less benefits at higher prices isn't that the same thing? Didn't you read the study that showed that 60 some percent of people would leave Medicare Advantage because of the cost? now I'm not saying that the sweetheart deal that Medicare Advantage was given by a Republican congress was right as it clearly was not but also please don't sell me a bill of goods that people can "keep what they want". Well sure they can IF they want to pay a ridiculous price for it.

the CBO and Douglas Elmendorf disagrees with you and expects 2.7 million seniors to be forced to change their plan because of cost over the next decade.

http://www.cbsnews.com/stories/2009/09/23/politics/main5331508.shtml

Posted by: visionbrkr | December 1, 2009 10:43 AM | Report abuse

Or, we could choose to pay for it.

HAH!

'Lack of Political Will' would be an excellent book title for decline of the American Empire.

Posted by: JkR- | December 1, 2009 11:09 AM | Report abuse

In other words, thank goodness that our politicians now are so much smarter than the ones who created Mediare and Medicaid in the first place.

Wrong. This HCR is being pushed by industry precisely because they were running out of pockets to pick under the old system. Their agreed upon cuts fit squarely under the rubric of, "I'll gladly pay you Tuesday for a hamburger today."

Posted by: bmull | December 1, 2009 11:21 AM | Report abuse

Actually Ezra, if we had a system that could actually properly manage Medicare and Medicaid, it would probably be a system that could actually get other difficult tasks done as well (such as HCR or tax reform).

Posted by: ChicagoIndependant | December 1, 2009 11:27 AM | Report abuse

Ohiocitizen seems to have a fundamental misunderstanding of the Medicare Advantage program—suggesting these programs will cut benefits and increase prices. Cutting benefits is not as available an option as the writer suggests. The private plans must offer all the benefits a beneficiary receives under the regular Medicare program. Many of them have offered peripheral benefits to attract customers, e.g. gym memberships, eyeglasses, . . . sweeteners used as marketing tools. Some have no monthly premium, but a CBO report, issued in 2008, found some Advantage patients are paying more in the private program than they would in the traditional plan. The complex system of copayments and deductibles presented by these plans makes determining cost difficult. Buyer beware!

Medicare beneficiaries in traditional Medicare pay higher premiums to support private insurance programs. If private plans are so superior to a government plan, we should not have to subsidize them.

If there are reductions in the Advantage program payments, some of those plans will undoubtedly raise premiums, but the Medicare beneficiary is not locked into remaining in the plan. Unlike those under 65 whose private insurers exit a market or raise prices, for the Medicare beneficiary traditional Medicare is a security blanket, there for them when private plans desert.

Posted by: DorothyMonroe | December 1, 2009 12:30 PM | Report abuse

To say that the problem is Medicare/Medicaid mismanagement is too narrow a focus: with the exception of the Medicare Advantage overpayments, which were dictated by Congress, private insurance suffer the same problems as CMS. Bundled payments, "Medical Homes," reducing payments for hospital readmissions, and the other improvements under discussion are all lacking from BCBS, Aetna, United Health, and the other insurance plans.

Posted by: danwhalen2 | December 1, 2009 12:42 PM | Report abuse

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