The Republican budget released on Tuesday is a daring one in many ways. Above all, it would replace the current Medicare with a system of private health insurance plans subsidized by the government. Whether you like or loathe that idea, it would undeniably reduce Medicare’s long-term funding gap ”” which is by far the biggest source of looming federal deficits.
Yet there is at least one big way in which the plan isn’t daring at all. It asks for a whole lot of sacrifice from everyone under the age of 55 and little from everyone 55 and over. Representative Paul Ryan, the Wisconsin Republican who wrote the plan, calls the budget deficit an “existential threat” to the United States. Then he absolves more than one-third of all adults from responsibility in dealing with that threat.
This decision doesn’t make him unique in Washington. There is nearly a bipartisan consensus that any cuts to Medicare and Social Security should spare the baby boomers and the elderly. And, certainly, retirees or people on the verge of retirement shouldn’t have their benefits changed radically. But the consensus, like Mr. Ryan’s plan, goes too far.
“Dump on the new people and let me keep mine.” I work with a bunch of [i]post[/i]-baby boomers and this sort of reasoning seems to be challenged by only a few of us. I don’t know that it is new, but it is pervasive.
So Dave L doesn’t like Ryan’s approach. Okay, let’s do nothing except increase spending on the current system, watch it blow up in a couple of years and then everyone will be making sacrifices to the max. Does that make you happier Dave?
What Ryan is proposing is exactly what Medicare Part D does and that has been a resounding success and very popular and has beat its own cost projections.
Folks, a $15,000 subsidy to buy insurance is pretty fat; no one is going to be dying in the streets on that tab, no matter what Nancy Pelosi says.
Doesn’t sound like much sacrifice here.
I have Humana as my Medicare Advantage plan and am very pleased with it. However, it’s a plan with a preferred network and some of my specialists don’t accept it. When you live in a small city and there isn’t a lot of choice among specialists, you’re kind of stuck.
Consequently, I don’t go to my specialists as often as I should and rely far more on my internist. I’m just lucky that she’s a very brave and caring soul and has agreed to handle it because I’m classified as a high-risk patient with the diseases I have. Many other people might not be so lucky to have a fantastic internist willing to take them on.
But I think that’s the point, isn’t it? Humana, in particular, wants to focus on preventive and less-expensive care. They pay for health club memberships and have a rewards program that gives you free gifts if you take such preventive measures as getting a flu shot, mammogram, colo-rectal screenings, etc. Internist/family doctor copays are quite low and specialist copays (if they’re part of the network) are much higher.
I think it’s brilliant, really, BUT I’m also a college-educated, middle-aged Medicare recipient who asks questions, reads as much as possible about her diseases, and has an excellent internist who gives her all for her patients. Would the elderly be able to shop around for a plan that fits their needs and shop around for great doctors?
Even I had problems working with the rules when it came to choosing an Advantage plan and Part D coverage and I mucked up my coverage twice. Privatizing Medicare would be fine IF they greatly simplified the process of selecting coverage and IF they provided a lot of assistance for the elderly in the transition. You can’t expect the average person who is disabled and/or old to learn the ins and outs of HMOs, PPOs, Regional PPOs, PFFSes, drug formularies and coverage tiers, and how your coverage/care depends on what sort of insurance you choose. It’s WAY confusing — and that’s been the problem with Medicare Advantage.
[i]You can’t expect the average person who is disabled and/or old to learn the ins and outs of HMOs, PPOs, Regional PPOs, PFFSes, drug formularies and coverage tiers, and how your coverage/care depends on what sort of insurance you choose.[/i]
Really? It amazes me that these same “poor learners” somehow figure out the internet, smart phones, twitter, Facebook, DVDR’s, and all the other techno-babble contraptions [i]essential[/i] to modern life, but they can’t navigate their own health insurance or ask questions. Or is it that they just prefer to have Uncle Sammy drop it in their laps courtesy of the US taxpayer?
Mr. Ryan’s message is this; “we can’t afford to do that anymore”. So, at the worst, the “slow learners” maybe will have to spend less time on facebook and more time studying insurance.
As someone mentioned on the radio the other day: we Americans need to relearn the virtues of individual ruggedness. If you are dependent on other folks for the [b]needs[/b] of your life, you are living in slavery, or at best indentured servitude.
Capt. Deacon Warren,
My mother is 85, my father is 87. They cannot figure out how to deal with determining the “right” prescription plan, or what should be covered by Medicare, Medicaid, or their supplemental insurance. Each doctor visit brings with it new challenges – especially when they have to try and find a new specialist on their insurance plan.
Strangely enough, they do have a computer, but all my Mom can manage is to send & receive e-mail and read the news on the Yahoo home page; anything more complicated, and she can’t handle it. My Dad is legally blind; he can’t even see the computer, let alone use it. They don’t have a Facebook page, can’t program a VCR, can’t figure out how to use a cell phone (not a smart phone, a 1995 vintage phone with no display) and don’t tweet.
Please don’t make generalizations like the one you did. When I think of my mom struggling with 7 bills/statements from one trip to the doctor’s office, and also struggling to look at a photo attached to an e-mail, and then I read a cavalier remark about “these same ‘poor learners’ ” – well, I’ll just say I think it shows a lack of thoughtfulness and leave it at that.
Well, Deacon Warren, I guess I’m a slow learner. And I don’t have a smart phone, do twitter or Facebook or program DVDRs. None of the elderly I know do all of the above so either you hang with some very techno-savvy old folks or my peeps are especially naive and stupid. I suspect that neither is the case.
Have you navigated this system per chance? Well, let me tell you of my experiences and you can take it for what it’s worth. Here’s the deal — Medicare includes original Medicare, HMOs, PPOs, Regional PPOs, and PFFSes which all have different rules of coverage. Medicare also includes Part D prescription coverage. With Part D, you can either choose stand-alone coverage or a health plan that includes Part D.
Generally, stand-alone Part D coverage has a larger formulary (it covers more drugs at a better rate). If you take (or expect to take) some of the more unusual or rare medications, you really need coverage with a comprehensive formulary.
OK, I take an unusual expensive drug for survival. It’s the most expensive part of my health care, besides my occasional need for surgery. So, it’s paramount that whatever health plan I choose covers that drug comprehensively. In the beginning, that meant I needed a stand-alone Part D coverage. Makes sense — prescriptions are their specialty. But this is where it gets tricky.
One year, I enrolled in an HMO without prescription coverage and a separate Part D policy. A month goes by and I get a notice from Medicare that I can’t do this. No good reason, it’s just their policy that you can’t have an HMO and stand-alone Part D. They said I could have stand-alone Part D with original Medicare, a PPO or a PFFS health insurer. OK, so I switch to a PFFS.
At the end of the year, I get the new Part D policy for the following year and find out that they downgraded my coverage for that expensive drug. (Did I mention that each company can change their formularies and tiers every year? They can.) So, I need to find new prescription coverage. Also, my PFFS greatly raised their rates so I needed to find a different health plan.
I sign up for a PPO and new stand-alone health coverage. I get my cards, I get my welcome letters, everything seems fine. I go to use the health insurance and it’s declined at the doctor’s office. I call the company and they don’t know why. I call Medicare and they deny I ever enrolled in it. Many phone calls later, a Medicare supervisor tells me that the new Medicare rule says you can’t have a stand-alone Part D with a PPO. Previously, they told me you could; now they say you can’t. I couldn’t change plans at this time so I had to go with traditional Medicare.
At the end of last year, I get the new coverage info and find out that my Part D company won’t cover my odd drug at all. And I hate traditional Medicare so I have to find an affordable health plan and new prescription coverage. Very frustrating. If the medical coverage is good, the prescription coverage is not. Humana has the fewest tradeoffs, so I sign up with them.
All is OK BUT my plan became a regional PPO instead of a straight PPO. My city is apparently part of the Dallas region so most of the doctors in the plan are in DFW, about 3 hours away. My cardiologist and neurologist don’t even have out-of-network status so their bills aren’t covered at all. I’ll live with it — I do like Humana. However, we’ll see what news the end of the year brings. I might have to switch again.
Perhaps I’m a stupid person but it is very difficult to decipher all of the rules in all of these individual plans and figure out Tiers and formularies. Every company has a different one and different definitions/rules for each tier. A tier 3 drug is not the same among all of the different companies nor is it covered in the same way. You have one several week window each year to assemble all of the information, read each plan individually, contact the individual companies, and get it right.
This is why most seniors just stay with original Medicare. They don’t have the ability or patience to investigate all of the rules and clauses that come with the Advantage plans, even though the Advantage plans offer extra coverage.
What Ryan is proposing sounds like it would convert Medicare to an all-Advantage type of service, with companies competing for business. I’m not against that but, as I said previously, it will HAVE to be simplified if ALL seniors and disabled people will be expected to use it.
Thank you, Uh Clint. I absolutely agree. I’ve told my social worker and nurse friends that I’m only 46 and I struggle to figure it all out so I don’t know how in the world our dear elderly manage it! Yes, I have some brain deficits because of my disease but I like to think I’m still fairly intelligent! Apparently not to Capt. Warren’s expectations, though.
“Dump on the new people and let me keep mine.â€
Isn’t that what the seniority system of the unions does?
Re. #9. That is how it often translates in practice.
[i]When I think of my mom struggling with 7 bills/statements from one trip to the doctor’s office, and also struggling to look at a photo attached to an e-mail, and then I read a cavalier remark about “these same ‘poor learners’ †– well, I’ll just say I think it shows a lack of thoughtfulness and leave it at that. [/i]
Shows a lack of thoughtfullness? Not at all. I spent years caring for my father and mother in years of decline. Did I expect the Federal Government to do that for me? Did I expect all my fellow taxpayers (and non-payers) to take that “burden” from my shoulders? Absolutely not. The fundemental tragedy of an America that has lost its sense of “rugged individuality” is that we have come to accept that every need must be fulfilled from Washington. Have aging parents? What will Washington do for us children of those parents? Have medical disabilities? What will Washington do for us fellow family members or church members?
We have been lulled into accepting expectations from the Federal Government which have created economic realities which we never could and certainly now cannot afford. We obviously never intended to pay for what we have come to demand.
And so the reality, the true reality is this: either we wake up to our addictions to Washington and retool our spending to meet the basic jobs which the Federal Govt is delegated to do, or we are going to suffer an economic tsunami of historic proportions and have the realities brutally forced upon us.
Today, the choice is ours. Many tomorrows from now, it won’t be a choice; it will be a cruel hard fact.
Go re-read the article. The Ryan budget is proposing a medicare transition to a plan that will provide a [i]$15,000/yr subsidy[/i] to buy private insurance to those who need the subsidy. That is hardly the stuff of cruelty that leading democratic politicans are already out on the media trail demogoging.
For some “rugged individuality” is simply a way to defend cruelty and turn a blind eye to misery. It’s a myth, the garden of eden. After all, in those days, people just died a lot earlier.
Use science to justify spending that works. That will cut a lot of it. Us the market when it’s appropriate. And raise taxes on the affluent – they benefit from a strong social contract. In the long term, businesses prosper when they have populations that are healthy and aren’t worried about being sick.
Captain warren may have had plenty of resources at his disposal, and may have never used Medicare or Medicaid. God bless him. God bless his idealization of poverty (an idealization I wish more affluent people had), and the early death which would be the consequence of the “rugged individualism.”
Of course, I submit a simple soda tax would fund health care, and perhaps prevent other expensive diseases.
What I do agree is that ever since we’ve started believing in the myth, the cult of tax cuts, we’ve decided we can get something for nothing. If you want a healthy and educated public, you need to pay for it. We think we can have a free lunch – an effective government that we won’t pay for.
But that was the whole point, right? Defund government and then complain it doesn’t work, justifying further cuts.
Ah John, you chose to redefine what I meant by rugged individualism rather than comment on what I really said; which is fine, it’s your post. What I said was, if you are dependent on other folks to meet your basic needs, then you are either in slavery or at best, indentured servitude. The American virtue of Rugged Individualism rejects that in favor of freedom and liberty to be the best that we (and everyone) can be. And the virtue of the virtue is that this comes from an America which has always led the rest of the world in generosity and true compassion.
Then your run off, “Nancy Pelosi like” with hyperbole fit for MSNBC. Rugged individualism according to you is equated to “early death”, lack of health, and lack of education. And budget cuts to the Federal Govt to return to (traditional) levels of spending that are under 20% of GDP (vs the current and projected >23% GDP) are equated to the “defunding of government”. Right.
Such hyperbole was much on display this week as one politician suggested that block granted medicare to states will result in “millions” of elderly deaths. Yes, like state governors have a passion for killing their constituents. What the Washington crowd really doesn’t like is for the power of providing social services to go back to the states and out of their hands. Such compassion (not)!.
Capt. Deacon Warren,
I apologize. I guess I missed the part of your comment which I referred to where you made it obvious you weren’t generalizing, and that “ruggedness” can be dealt with by someone other than the oldsters. Your subsequent comments have made your position very, very clear.
I consult with seniors and their families in planning for and funding health and long term care. If you are in your 40s or 50s you would be crazy to voluntarily exchange Medicare coverage for a $15,000 a year insurance subsidy. There is no way that will touch the cost of your health care, and no insurance company is going to provide coverage for anywhere near that price; unless they are allowed to impose very low caps on coverage of certain high cost illnesses, or lifetime caps on the policies, and very high deductibles. It would simply not be profitable for them to do so. Further funding for dementia care, Alzheimer’s disease and mental health care would be non-existent; since insurance barely covers that now for its paying customers. Finally, you could expect that number to never go up, as those proposing it want to eliminate government subsidized health care. Every year it would become a battle as to whether to cut the health insurance subsidy.
If you block grand Medicaid, nursing home residents, people who are disabled, and poor children in some states, CA, NJ, MA, CN, etc.; states with large affluent populations; will probably do fine. In fact their share of the Medicaid funding will likely go up. Senior citizens, poor children, and people with disabilities in states like Mississippi, SC, GA, Alabama, NC; mostly southern states; will most likely suffer a significant decline in the nursing home and health care services available to them; and I do believe we would see significant negative health consequences to that population. Those states will see their reimbursement drop and because they are disproportionately poor, they will have no state resources with which to replace them.
The concept that people at the local level can better figure out how to allocate reduced resources without negative health consequences is pure fantasy. At the local level politically powerful lobbies, like the Nursing Home lobby, and the Hospital lobby, have far more influence and control over legislators than they do at the national levels. It will rapidly become a political fight between those lobbies as to who will get that money. Local politicians will of course love nothing more than a pile of money they could divvy up among their contributors.
[i]If you are in your 40s or 50s you would be crazy to voluntarily exchange Medicare coverage for a $15,000 a year insurance subsidy[/i]
I agree 1000% with what a consultant to seniors tells them, and his new stream of clients in their 40’s and 50’s. You bet, in a perfect uptopian world only a real sucker would give up having an E-class Mercedes at a Chevy Aveo price!!! Ha, only a loser would do that!
But, the problem is that instead of being in a perfect world, a lot of us see a fiscal train wreck coming. If we go into an economic collapse, none of us may have to wonder what our Medicare will look like……we might not have any.
You name a Federal Program…..there will be an expert, political, consultant, advocate, non-profit, you name it, who will tell us we just can’t cut, we just can’t change, people just can’t manage without what they have.
We can either make the gradual adjustments required to avoid the train wreck or we can just hope the wreck happens after our time on this planet. The latter is such a fine legacy to leave to our children and grandchildren.
Deacon Warren, you can insult me all you want, but most people have no clue what their health and long term care is going to cost or what resources are available to them under various circumstances. We advise them so that they can plan.
While long term care consulting is only a small portion of what we do, most of it centers around crisis planning. For example, this morning I met with a lady whose, husband just had a stroke. He is in a nursing home an is unlikely to be able to return home. Their total combined income is $2800 per month, they have a house with a value of about 200k and approximately $90,000 in bank accounts. The potential nh bill is $6000 per month. Wife, who is 70, is terrified she will be left destitute. Or yesterday, I met with two children. Their father has severe dementia. His income is $1,800 per month. Both children work full time, and have kids in college. They do not know how they are going to care for their father when his rapidly dwindling resources run out. We help them work through those issues. Of course, I guess they should be able to solve these simple problems on their own; but they did not know where to even start.
These are real world problems, no one wants to talk about. It is easier to say lets eliminate that program, we will save billions of dollars and people can do without those benefits.
Finally, I am glad to hear someone refer to Medicare as Mercedes class coverage. Mostly people who want to kill Medicare talk about how horrible it is, how people receive substandard care; how they can’t choose their own doctor, etc.
Medicare is not Mercedes class coverage of course, it is good basic coverage for people insurance companies would not cover at a price they could afford; and most people buy supplemental insurance. I think a more appropriate analogy is Medicare and Medicaid are a Ford truck pulling the 6,000 lb weight that is your health care up a 35% slope in the snow. If you don’t make it to the top you die. Your gas gauge says you are down to a quarter of a tank, and you’re not sure that’s enough to get to the top. Ryan’s proposed solution is unhook the truck now, put the remaining gas into a Chevy Aveo, hook up the load, and hope for the best.
Mitchell,
Although I can’t do anything about it, I am indeed sorry that you find the truth insulting. I fully expect someone in your position of advisement to do what a CPA does; help the client milk the system for all it is worth. You would be open to claims of fiduciary mismanagement if you didn’t. I have fired a couple of CPA’s in my lifetime whom I didn’t think were as aggressive as they should be.
You might look around in the real world to make the comparsion about how inadequate Medicare coverage is. It is not perfect which is why medi-gap is so prevalent. And it isn’t all free: between medicare and medi-gap, Seniors are shelling out about ~$3,000 per year (maybe a little less). I managed my mom’s care for the last few years of her life. If it ain’t Mercedes E class, it is fully loaded C class and more.
Point is, using the Federal Govt as an insurance agent is terribly inefficent because all the Govt can do is stimulate demand (“free care”) and drive up the costs of care (too much demand chasing too little supply). The private sector proposals seek to dampen demand by making consumers be payers (and hence, better shoppers for value) and also to unleash the market to increase supply.
But that is change: and when change is more than a political slogan it scares people (and advisors, who then have to adapt). But an economic collapse will change your world as badly as it will change mine, so I vote for people of foresight who will try to evolve the system rather than collapse it.
So you think there are insurance companies lining up to provide meaningful coverage to Mitchell’s clients for $15,000 a year? Really? I’d rather trust a corrupt government than a corrupt industry like we have for health insurance.
Uh Clayton, what do you think group health insurance costs? Your question is a perfect illustration of part of the problem of health care in this country. We are users of the system but not interested consumers balancing cost versus value.
The group policy I come under runs ~$1,200/mo for my [i]wife and I [/i]and its a comprehensive policy with acceptable out of pocket yearly limits and copays and the like. So, that $15,000 subsidy would be fantastic.
So to answer your question, yes there will be private policies for $15000 [b]per person[/b]. Will they be those Mercedes E-Class policies? Well, I bet there will be options for you to purchase if that is what you wish. That’s the point, it will be YOUR choice.
Your next point: what is corrupt about the insurance companies you have dealt with? And how did you try to resolve that situation?