Health economists generally believe that Medicare is on an unsustainable course and is desperately in need of reform. Yet public opinion polls show that most seniors disagree. They not only resist cuts in Medicare to solve the problem of federal deficit spending, they also resisted the spending cuts and delivery of care innovations envisioned by the Affordable Care Act (ACA), as well as the private insurance innovations envisioned by Rep. Paul Ryan (R-WI) and the House Republicans.

In short, most seniors would like to keep Medicare just like it is.

A similar view is held by a small, but vocal group on the left that favors single-payer national health insurance. The Physicians for a National Health Program, for example, claims that Medicare has lower administrative costs than private insurance and is able to use its monopsony (single-buyer) power to suppress provider fees. The group, which is resistant to managed care, favors “Medicare for all” and endorses a bill to do just that by John Conyers.

Paul Krugman, writing in The New York Times, also argues this way. He points to a chart (see Figure I) which seems to show that Medicare per capita spending is growing at a slower rate than private insurance. Krugman, along with others,  touts the slower rate growth in the Canadian health care system (also called “Medicare”).  In recent editorials, both Krugman and Robert Reich have joined the call for Medicare for everyone.

Are these unconventional critics right?

Read the rest of the post at Heath Affairs Blog.

The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.

More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.

Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.

“Many physicians have said, ‘I simply cannot afford to keep taking care of Medicare patients,’” said Heim, a family doctor who practices in Laurinburg, North Carolina. “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”

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The newest bargain being proposed on health care in the Senate would give liberals a major expansion of Medicare by making more than 30 million Americans between the ages of 55 and 65 eligible for the financially exhausted program, previously just for senior citizens.

But by expanding an existing government-run insurance program (while cutting it by $500 billion?) Senate Majority Leader Harry Reid hopes to avoid defeat of his bill because of moderate member’s concerns over his plan to create a whole new health entitlement.

Writers Greg Hitt and Janet Adamy tell us that what’s being offered as the alternative to the government plan approved in the House is a non-profit, national private plan regulated by the federal government.

Liberals in the Senate are trying hard not to look too happy. The bill would ultimately make the government responsible for the new health plan and would create a genuine public option if the non-profit/private/public lash-up goes bust.

Reid was crowing again last night, but as Examiner colleague Susan Ferrechio points out, there is still no certainty that a bill will pass.

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Meet the unelected body that will dictate future medical decisions.

As usual, the most dangerous parts of ObamaCare aren’t receiving the scrutiny they deserve—and one of the least examined is a new commission to tell Congress how to control health spending. Democrats are quietly attempting to impose a “global budget” on Medicare, with radical implications for U.S. medicine.

Like most of Europe, the various health bills stipulate that Congress will arbitrarily decide how much to spend on health care for seniors every year—and then invest an unelected board with extraordinary powers to dictate what is covered and how it will be paid for. White House budget director Peter Orszag calls this Medicare commission “critical to our fiscal future” and “one of the most potent reforms.”

As envisioned by the Senate Finance Committee, the commission—all 15 members appointed by the President—would have to meet certain budget targets each year. Starting in 2015, Medicare could not grow more rapidly on a per capita basis than by a measure of inflation. After 2019, it could only grow at the same rate as GDP, plus one percentage point.

The theory is to let technocrats set Medicare payments free from political pressure, as with the military base closing commissions. But that process presented recommendations to Congress for an up-or-down vote. Here, the commission’s decisions would go into effect automatically if Congress couldn’t agree within six months on different cuts that met the same target. The board’s decisions would not be subject to ordinary notice-and-comment rule-making, or even judicial review.

Yet if the goal really is political insulation, then the Medicare Commission is off to a bad start. To avoid a senior revolt, Finance Chairman Max Baucus decided to bar his creation from reducing benefits or raising the eligibility age, which meant that it could only cut costs by tightening Medicare price controls on doctors and hospitals. Doctors and hospitals, naturally, were furious.

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On Monday, October 19, Senator Jon Kyl of Arizona shared with his colleagues in the Senate what he has been hearing from his constituents on Health Care Reform. Senator Kyl gave a 20-minute presentation in which he aptly articulated the concerns most Americans are expressing about the Health Care Reform bill.  Although it is a bit long, this is a “must-see” speech for everyone who cares about the future of health care in America.

According to AMA’s National Health Insurance Report Card, Medicare denies 6.85 percent of its claims, higher than any private insurer (Aetna was second, denying 6.80 percent of its claims), and more than double any private insurer’s average.

What’s fascinating is that The American Medical Association (AMA) has endorsed a public option, despite the fact that “some member physicians at the group’s annual meeting [in June] likened the notion to communism.”

The Obama administration repeats ad nauseum that we need a government option to “keep insurance companies honest” and to make sure they don’t deny anyone coverage. Well what does one say about the fact that Medicare denies more claims than private insurers?

President Obama has promised that if we like our health insurance we can keep it. But will those who are forced into the public option–which has been estimated to be minimum of tens of millions of currently insured Americans in addition to those “46 million” currently uninsured–be satisfied with their care given that the government program Medicare’s denial of claims outranks any private insurer’s?

AMA is effectively endorsing a public plan that is the largest denier of claims. How the public option would provide health care to patients is hard to understand.

As the health-reform bills move through Congress, the prognosis for Medicare pa tients gets worse and worse.

The Senate Finance Committee bill (generally called the Baucus bill, after Chairman Max Baucus) robs the elderly to cover the uninsured — like snatching purses from little old ladies. The House bills already cut future funding for Medicare by $500 billion over the next decade. The Baucus bill would slash a similar amount, just when 30 percent more people enter the program as baby boomers turn 65.

The Baucus bill also puts new limits on what doctors can do for patients in Medicare:

* A “race to the bottom” provision (p. 102 of the revised chairman’s mark) would take effect each year for the next five years. The provision penalizes doctors who end up in the 90th percentile or above on the cost of what they use to treat their patients, compared with national averages. The intent is to force down the cost of care, year by year. Yet this blunt instrument can’t determine which care is actually wasteful – it will punish doctors for treating high cost patients with complex conditions. Inevitably, it will lower the quality of care.

* Even more devastating is the amendment Sen. Maria Cantwell (D-Wash.) got inserted into the bill (revised chairman’s mark, pp. 102-3). It gives the Secretary of Health and Human Services the power to define quality, cost-effective care for each medical condition and penalize doctors who spend more on their patients.

The law establishing Medicare in 1965 barred the federal government from interfering in doctors’ treatment decisions. Slowly, Medicare regulations have begun unraveling that protection. Now the Cantwell amendment finishes the job.

This is the most extreme change to Medicare ever. Dr. David McKalip, a Florida neurosurgeon and a board member of the Florida Medical Association, predicts: “The only doctors left in Medicare will be those willing to ration care and practice cookbook medicine.”

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Administration Silences Medicare Advantage Critics—So AARP Can Collect More “Kickbacks”

“There’s an inherent conflict of interest….They’re ending up becoming very dependent on sources of income.”
 - Former AARP Executive Marilyn Moon, quoted in Bloomberg article

This week the Centers for Medicare and Medicaid Services announced it was investigating Humana for providing “misleading” information regarding the Administration’s proposed cuts to Medicare Advantage policies-and prohibited other Medicare Advantage plans from providing similar information on how Democrat health “reform” could take away their current coverage.
 
Yet the Administration’s edict prohibiting plans from communicating with their beneficiaries failed to include AARP, which sponsors a Medicare Advantage plan but has been a prime advocate of Democrats’ government takeover of health care-quite possibly because AARP has been supporting a health care overhaul from which it stands to gain overall handsomely.  Even as AARP advocates for cutting Medicare Advantage plans by more than $150 billion, an analysis of the organization’s operations reveals that it stands to receive tens of millions of dollars at the expense of seniors’ medical care-with Democrats’ full approval:

•  The Congressional Budget Office has previously estimated that the cuts to Medicare Advantage plans proposed in Democrats’ government takeover of health care (H.R. 3200) would cause millions of seniors to lose their current plan and enroll in government-run Medicare.

•  Because the government-run Medicare benefit is less generous than most private health plans, the independent Medicare Payment Advisory Commission found in June that more than nine in ten seniors not in nursing home settings utilize some form of Medicare supplemental insurance.  While many of these individuals currently rely on Medicare Advantage plans for the extra benefits they provide to seniors, many would be forced to purchase supplemental Medigap policies should their existing Medicare Advantage plans be taken away from them due to Democrats’ government takeover of health care.

•  A review of its financial statements finds that in 2008, AARP received more than half a billion dollars in revenue from selling products like Medigap supplemental insurance policies-$652.7 million in direct “royalties and fees,” and an increase of more than 31 percent from the $497.6 million in similar revenue AARP generated in 2007.

• Royalty revenues now comprise more than half-60.3 percent-of all AARP revenues; a Bloomberg news analysis published in December found that in 1999, royalties comprised only 11 percent of the organization’s total revenues.

•  The Bloomberg article-which highlighted what one observer called AARP’s “dirty little secret”-profiled seniors who felt betrayed after paying hundreds of dollars above market price for AARP-branded coverage.  One noted that “AARP has great buying power, and people should be able to get the best deal….This is unconscionable, what AARP has allowed to happen.”  Another disillusioned senior wrote to the organization’s leadership asking whether AARP had a “‘special relationship’ with [insurance carriers] by which it receives commissions, incentives, rebates, or dare I say ‘kickbacks?’”-and when he arrived at AARP headquarters for a tour, was promptly escorted out of the marble-covered atrium.

•  While H.R. 3200 would place strict price controls on Medicare Advantage plans-requiring them to pay out 85 percent of premium revenues in medical claims-Medigap policies face a far less strict 65 percent requirement.  In other words, under the Democrat bill, seniors could pay as much as 20 cents more out of every premium dollar to fund “kickbacks” to AARP-sponsored Medigap plans than Medicare Advantage plans.

The higher prices charged by AARP plans, and the organization’s increasing dependence upon revenue from “royalties,” provide tangible evidence why AARP would support cuts to Medicare Advantage that would likely increase their “kickbacks” from Medigap plans.  However, it does not answer several key questions:

• Given the myriad new layers of insurance regulation included in Democrats’ government takeover of health care, why does the legislation not include a single provision attempting to impose any new restrictions on Medigap policies?

• Did Democrats “forget” to protect seniors-or were they informed that AARP could not support legislation that would limit its lucrative revenue source?

• Similarly, did CMS “forget” to include AARP among the organizations whose First Amendment rights to inform seniors of harmful Medicare provisions were restricted-or did the Administration only wish to silence its critics, and not outside organizations using “kickbacks” to fund advertising in support of the Democrat agenda?

These questions hint at a more fundamental query: With seniors believing that AARP is “making money on the backs of old people,” who should believe that the organization is looking out for seniors’ interests and not its own?

Across the country, amid the heat swell of the ongoing health care debate, many of the nation’s gray panthers have a new fire growing in their bellies, attending town halls, writing letters, and shifting the balance of political power as polls show them moving to the GOP.

They are not just making themselves heard on their key issues of Medicare and insurance, but giving their legislators a piece of their mind that a way of life is slipping away.

“They” are seniors like Jerry Johnson, a 75-year-old retired yacht salesman from Tallahassee, Fla. He says he’s spending his days delving into issues like a seasoned Washington pundit.

“I’m doing this for my kids,” he says of his activism, which includes talking with voters, attending town-hall meetings and listening to political radio “12 hours a day.”

“They all have lives and are busy working but I’m really concerned about the debt and the world they’ll have to face,” he said. “I see myself as their warrior because I see our country slipping away. It’s going to go a lot more quickly unless someone like me gets active. I’ve got the time.”

Mr. Johnson said it’s the most politically engaged he’s been in his life, and there’s a reason for that. The Michigan native said that since the last presidential election, the stakes have never been so high, which is why he’s out of his easy chair and moving into the fray.

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Posted from the Wall Street Journal

The thing about the bully pulpit is that Presidents can make the most fantastic claims and it takes days to sort the reality from the myths. So as a public service, let’s try to navigate the, er, remarkable Medicare discussion that President Obama delivered on Wednesday. It isn’t easy.

Mr. Obama began by depicting a crisis in the entitlement state, noting that “our health-care system is placing an unsustainable burden on taxpayers,” especially Medicare. Unless we find a way to cauterize this fiscal hemorrhage, “we will eventually be spending more on Medicare than every other government program combined. Put simply, our health-care program is our deficit problem. Nothing else even comes close.”

On this score he’s right. Medicare’s unfunded liability—the gap between revenues and promised benefits—is currently some $37 trillion over the next 75 years. Yet the President uses this insolvency as an argument to justify the creation of another health-care entitlement, this time for most everyone under age 65. It’s like a variation on the old Marx Brothers routine: “The soup is terrible and the portions are too small.”

As astonishing, Mr. Obama claimed he can finance universal health care without adding “one dime to the deficit, now or in the future, period,” in large part by pumping money out of Medicare. The $880 billion Senate plan he all but blessed this week would cut Medicare by as much as $500 billion, mainly by cutting what Mr. Obama called “waste and abuse.” Perhaps this is related to the “waste and abuse” that Congresses of both parties have targeted dozens of times without ever cutting it.

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