The 2012 Political Debate: MediCare vs. ObamaCare vs. RyanCare

August 30, 2012 in Medicare, Member Stories

Martha asked me recently what I thought about the 2012 political debate over Medicare given my previous posts about Medicare on this site and my “work” as a Centers for Medicare/Medicaid Services (CMS) volunteer at my local senior center. (Oh, and like Sy Sperling and the Hair Club, I’m also a member of Medicare.) My answer to her is that there is not enough information available for anyone to form an intellectually honest, just-the-facts-ma’am pro and con analysis about the various proposals for Medicare reform. Neither side wants to clear the air because — I assume — there is more political advantage to both candidates in keeping the debate murky.

So all I can tell you is what I would read if I were you and I felt the need to try to find out more information about Medicare — and proposals to reform it. My basic advice: Go to the source. Do not depend on the media. Do not depend on so-called non-partisan think tanks.

The best source is a 200-page booklet available on medicare.gov called Medicare and You.

I think it is especially important for those under 55 to find out how little in healthcare services and costs that ”traditional Medicare” covers compared to what you have today as healthcare insurance.  Traditional Medicare was designed in the late 1950s and early 1960s when basically everyone who had healthcare insurance had something called Blue Cross/Slue Shield Major Medical. Traditional Medicare insurance is Major Medical. In an era of smartphones and Mars Rovers, traditional Medicare is a throwback to Dwight Eisenhower’s Interstate Highway System and Sputnik.

Also note in the Medicare and You booklet how strongly the government urges seniors to find private insurance to supplement Traditional Medicare. The good news is that almost 85% of Medicare beneficiaries take the government’s advice and get private insurance on top of Traditional Medicare. Another 15% get Medicaid or some other kind of public assistance to supplement Traditional Medicare.

(These two groups actually overlap such that about 95% of Medicare beneficiaries get the much needed supplement. The 5% that don’t either depend on private insurance from a spouse who has not yet retired, are apparently so rich they self insure, or –unfortunately — have fallen through the cracks despite the best efforts of those of us volunteering at the senior centers.)

How do I know that 95% statistic? Other good sources — except that now you are getting down into the wonk weeds — are annual reports and statistical documents from the Medicare Trustees, their actuaries, and an independent government organization called MedPAC (which is to Medicare what the Congressional Budget Office is to the rest of the government). You can find the 95% statistic and confirm or put the lie to many other political debate claims with these sources.

There are only two other source documents that matter but if you go this route, you fully qualify as a wonk. One is a couple of thousand pages long and the other is about 16. The first is the Patient Protection and Affordable Care Act of 2010 as amended and the second is the Wyden/Ryan proposal for Medicare Reform dated December 2011.  But don’t read one without reading the other.

6 responses to The 2012 Political Debate: MediCare vs. ObamaCare vs. RyanCare

  1. Hey Dennis – this fact baffles me every time I hear it: “I think it is especially important for those under 55 to find out how little in healthcare services and costs that “traditional Medicare” covers compared to what you have today as healthcare insurance.”

    Do you take from this that a move to vouchers (realizing that we don’t know exactly how this would work) might not be so bad?

  2. No, Martha, the two subjects (what the insurance does as insurance, and how it is paid for) are two different subjects. My point addresses the design of Traditional Medicare (Parts A and B) in terms of healthcare services covered and not covered and rules about co-pays/deductibles and other restrictions.

    The worst and most potentially devastating aspect of Traditional Medicare is its lack of catastrophic coverage. It also has very high and confusing co-pays and deductibles relative to modern healthcare insurance (except for intentionally high-deductible, low cost insurance designed only for catastrophic coverage). So as insurance Traditional Medicare totally fails in both directions: it provides no protection for the first $200-$2000 in costs (depending on incidient) or the most major issue that insurance should protect you against (total financial ruin), Solving the latter problem in my opinion is the major feature of Wyden-Ryan. I am not aware of any other currently discussed proposal that solves this problem. PPACA specifically did not solve the catastrophic coverage problem for seniors even though it did solve it for non seniors.

    In terms of services covered, Traditional Medicare does not include vision/dental/drug/annual-physical-exam/aural/LTC and other important needs. PPACA added LTC to Medicare but the Obama adminstration chose not to implement it. TM is also restricted geographically and in terms of doctors you can use (but not as badly as Medicaid).

    (By the way, I am not aware of any recent proposal to reform Medicare — Rivlin/Domenici, Coburn.Lieberman, Bowles-Simpson, Wyden-Ryan — that is suggesting the use of vouchers. Send me a link to the proposal that you are thinking of so I can study it. Thanks)

  3. Hi Dennis – thanks for the note. There are many references to vouchers and the Ryan plan, but I haven’t looked for the source documents. Perhaps this term is being used too liberally: http://content.usatoday.com/communities/theoval/post/2012/08/obama-romney-medicare-debate-takes-a-turn/1#.UEC6SMGPWSo

  4. In particular, there is no reference to vouchers in the Wyden-Ryan plan. I don’t beleive there is any reference in any of the other half-dozen source documents I suggested. To be honest I have never seen a voucher approach suggested in any Medicare refofrm proposal anywhere but I can’t say that definitively.

    By referencing a USA today article you actually sort of prove the point I was making that neither political party wants to clear the air. Note that the USA Today article you chose as a source also does not say that the Wyden-Ryan plan is a voucher plan. The USA Today journalist simply says that President Obama says the Wyden-Ryan plan is a voucher plan. that is why I suggest sticking with three source documents I mentioned plus anything from the Trustees, actuaries and MedPAC. The accuracy of anything else from any source is suspect.

    (And your use of the word “liberally” was quite a Freudian slip, no :) )

  5. Martha, I also should make it clear that when I say I cannot find the word “voucher” in any of my source documents, I am depnding on the Find facility of Adobe reader and the Search facility of Microsoft Office. I haven’t re-read the roughly 4,000 pages involved.

    What is very clear from all of the source documents as well as in academic criticisms of the Wyden-Ryan plan (such as the recent Harvard study of competitive bidding published in JAMA) is that no one is describing a voucher approach but using another name. I agree with your comment above that there is a lot of detail missing (and next week I’ll do a post on the questions I would need answered to do an intellectually honest, just-the-facts-maam review of all the proposals) but everyone from both parties explains the mechanics as being similar to the proposed exchanges under PPACA and the existing Massachusetts Connector Authority exchange and exchanges used for the last five years to manage Medicare Parts C and D and for longer than that to manage the Federal Employee Health Plan.

    There is no voucher involved in any of these already existing or proposed systems that are used by both sides as examples of how Wyden-Ryan (and some of the other reform proposals) would work. Food stamps are a voucher like program. No one making proposals to reform Medicare is suggesting that seniors will get a credit card with a fixed amount of money associated with it and go invidually to an insurance agent and use the credit card to purchase any insurance he or she wishes to purchase. (However, political bloggers have described these proposals in those terms. I suspect that is what is confusing you.)

  6. Awesome write-up! I will actually book mark it
    for future reference. Appreciate it!

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