Saturday, April 16, 2011

Turning B into D

Opponents of the Ryan plan say that it ends Medicare, proponents say that it “saves” it, and you can probably tell from my use of quotation marks what my thoughts are on that debate. Ryan’s plan is unmitigated jackassery in many dimensions, but that doesn’t mean that I support my side trying to discredit it by using lies. Good God, as bad as this thing is we can discredit it with facts, we don’t need to lie about it.

For instance this little chart that Ryan plan opponents are using,
Ryan plan costs
What in Ryan’s plan is going to increase the cost of healthcare itself? Well, they assume that the move to private insurance is going to add $5750 per year in the form of administrative overhead and profit, which amounts to 39%. That is a remarkable assumption considering that most estimates say that insurance presently adds 30% to health care costs, so why does the increased business for insurance companies add a higher burden than is reportedly occurring now?

Further, since the basic infrastructure is already in place, buildings, computer systems, and the like, insurance companies would not need to increase their facilities by as much to handle increased business as they did to handle the business from scratch, so the overhead burden should be lower on additional business than it would be on start up.

Notice, too, that the chart only reflects a 7% reduction in Medicare spending, and Ryan is claiming a vastly greater reduction than that, so something is fishy in their reporting on that end of the graph as well.

Several defenders of the Ryan plan have said that it restructures Medicare into the same model as Medicare Part D, which I think is actually untrue in several respects, but it raises an interesting point, because the Medicare drug coverage is entirely provided by private insurers and no one seems to have any objection to that.

For all of the howling about Part D when it was created and since then, the one feature of it which has never raised an eyebrow is that it is not a government payer system like the rest of Medicare. It is a group of private plans from which seniors may select and a government payment plan, a “public option,” is not available. Much is made of the clause which disallows price negotiation with drug companies, but how much is the cost of the program increased by having payments managed by private insurance companies? That question never seems to have been asked.

Perhaps instead of turning Plan B into Plan D, if indeed we were actually doing that which we are not, we should be turning Plan D into Plan B.

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