Covering Medicare, Part I

A mixed performance from the press

Perhaps no other health issue is as important to so many Americans now and in the future as Medicare. Without it, millions of older and disabled people would not get health care. As baby boomers age, they, too, will need the program. The media have not done a stellar job covering Medicare; now that Wisconsin congressman Paul Ryan has moved Medicare to the top of the national agenda with his proposal to turn the system upside down, we hope that will change. In this new series, “Covering Medicare,” we will follow the reportage and offer Medicare beat memos from time to time.

Judy Woodruff’s interview with Rep. Paul Ryan on the NewsHour the other night didn’t do much to explain to ordinary Americans what Ryan’s proposal is all about. In a nutshell, it would convert Medicare from a social insurance program—where everyone who has paid into the system is entitled to benefits for hospital and physician services, paid for by the government—into a private insurance scheme. People would get a voucher, or a set amount of money from Medicare, to help them buy a policy from private insurers, which would then pay providers.

In the segment, Woodruff let Ryan evade many of the questions she posed; she didn’t press hard with follow-ups, either. When Woodruff asked why Ryan’s program—which would pay subsidies to private insurers—was better for seniors than the current setup, he didn’t answer the question, instead saying that private insurers were already involved in Medicare through Medicare Advantage plans, and that was nothing different from what he was talking about. “That’s part of it,” Woodruff replied, letting Ryan make the case—an inaccurate one—that Medicare is already private because “Medigap is private” and “the Part D benefit is private plans.” Yes, Medigap policies are sold by private insurers, and so is the drug benefit. But most Medicare recipients’ hospital and doctor bills are still paid by the government, a point that needed to be made.

Ryan talked a lot about increasing choice and competition, which, he said, will help “bring costs down and expand availability”—not that plenty of private options aren’t already available. In some parts of the country, beneficiaries have more than one hundred choices for covering their Medicare out-of-pocket expenses. But Ryan never exactly said why his proposal was better for seniors than the current system. Many experts say that it is not.

Woodruff failed to ask Ryan about the new report from the Congressional Budget Office (CBO) showing that seniors would pay almost two times more for their health care under Ryan’s plan. The CBO estimates that twenty years from now a typical sixty-five-year-old would have to pay 68 percent of the total cost of his or her health coverage (premiums, deductibles, and out-of-pocket costs) compared to 39 percent today.* Left unmentioned is whether they’ll be able to afford those expenses if Social Security benefits are cut, as Ryan also proposes—an important connecting of the dots. She also did not ask about his proposal to scrap a critical piece of the health reform law—the closing of the so-called “donut hole” for seniors who have very high prescription drug costs, which will give them government help in paying for their drugs. Is this an attempt to wipe out a provision of the health law that will save seniors a lot of money? They should be made aware of this.

Instead of pinning Ryan down, Woodruff let him play word games. At one point, he said:

Medicare works through private companies to deliver services to Medicare beneficiaries. So if you’re calling that privatization, then it’s already privatized. If you’re suggesting that the federal employee health benefit system is a privatized system, then this is—we’re just basically copying the federal employee system.

When Woodruff tried to get more info about that system, asking about a “cap on payments,” whatever that meant, Ryan blabbered on and finally said:

Medicare will work like the plan that I have, that congressmen and other federal employees have. That’s not a privatized system.

Instead of noting his contradiction, she moved on to another topic. FYI: Federal employees buy their insurance from private carriers, with the government acting as an employer making a premium contribution. That’s no different from General Motors, an employer, contributing to the premiums of its workers who buy their policies from Michigan Blue Cross and other private carriers. Indeed, that is a privatized system.

The CBO report was not lost on Woodruff’s colleagues at other news outlets, many of whom better served their audiences. Janet Adamy of The Wall Street Journal reported that Ryan’s proposal would give seniors an $8,000 voucher, on average, to buy a policy from a private company in 2022. They would have to pay the rest—whatever the going rate for insurance is ten or twenty years from now. Dean Baker, posting on the site of the liberal Center for Economic and Policy Research, calculated what those out-of-pocket expenses might mean. Using CBO assumptions about inflation, he estimated that the voucher would grow to almost $10,000 in twenty years and that the cost of a Medicare type plan for someone age sixty-five would be around $30,500, leaving consumers to pay the difference—around $21,000.

Julie Appleby of Kaiser Health News led led her story with the CBO news, while Rick Zaldivar at the AP delivered a comprehensive piece that explicitly said there would be a “cost shift to future retirees.” That parallels what’s happening for people under age sixty-five. Zaldivar also made two crucial points, reporting that the CBO said that private plans would cost more than traditional Medicare because of higher administrative costs and that the federal voucher would grow more slowly than health care cost inflation leaving a bigger gap for beneficiaries to pay.

Stephanie Condon, Washington correspondent for CBS Interactive, picked up another point—the Republicans’ Medicare bait and switch. During the fall elections the GOP successfully targeted key Democrats with ads accusing them of cutting Medicare benefits for seniors, which in turn scared the bejesus out of them. The health law reduced payments to health care providers but did not cut benefits to seniors, a point lost during the election noise. Condon remembered all that. It’s Ryan’s plan that will actually cut benefits for seniors over time, an irony for journos to bookmark.

Correction: This article initially reported that a typical sixty-five-year-old today pays 25 percent of his or her medical expenses. Actually, he or she pays 39 percent. The article has been corrected; CJR regrets the error.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , , , ,