MM: This is another step that unnecessarily complicates the program, and making wealthier beneficiaries pay more will not raise that much money. This is similar to the provision that requires individuals with incomes over $80,000 (families over $160,000) to pay more for Part B benefits—those that cover doctor services. If there’s a similar income cut-off, it will not affect that many people, since there are just not a large number of high-income seniors.
TL: Does this hasten privatization?
MM: It could if more people opt out of the system. For example, if we make the premiums high enough, some beneficiaries will go elsewhere for the insurance.
TL: Can you describe the Republicans’ budget proposals to turn Medicare into a voucher plan?
MM: The idea behind a voucher system is to give people a set amount per year with which to buy an insurance plan of their choosing—usually a private health plan. The premium would be adjusted for their health status to prevent sicker patients from having a harder time finding insurance. The only way to save money over time is to limit the increase in the voucher amount each year. But if health care continues to rise faster than the voucher amount, the individual must make up the difference between what the voucher buys and what a policy costs in the marketplace. Success depends on private plans holding down the growth of health care spending—something they have never been able to do.
TL: Is this a serious attempt at privatization?
MM: Supporters claim that limiting the amount of the voucher would cause plans to become serious about saving costs, and they would compete with each other to do the best job. At this point, this is a theoretical argument, not one based on any evidence. It’s the health care equivalent of the Hail Mary pass.
TL: What’s the most important story journalists can write now about Medicare?
MM: Reporters should look at the lessons of Medicare—both the good and the bad—and what health reformers can learn from them. They are instructive for crafting a health reform proposal.
TL: What are the pluses and minuses of letting people age fifty-five to sixty-four buy into Medicare?
MM: Letting them buy in at an earlier age would smooth their transition to Medicare. Because Medicare has to take all comers, people would no longer have to worry about preexisting conditions and being rejected by insurers in the individual market at an age when health conditions start to surface. But that creates other challenges. If all the healthy people continue to buy insurance from private plans and only turn to Medicare when they get sick, the costs to Medicare would be very high. This unlevel playing field would lead policy makers to tough choices: Should Medicare be subsidized to keep costs low? If so, who should pay for that? That could mean higher payroll taxes which many people believe are necessary. Others are vehemently opposed to higher taxes.
TL: How serious is Medicare’s so-called waste, fraud, and abuse problem?
MM: We know that there is fraud on the part of doctors and hospitals that game the system, and that should be aggressively handled. The issues of waste and abuse are more subtle. Was a particular treatment or test necessary, or was it wasted money? Sometimes we can judge that only after the fact. One person’s waste is another’s valued benefit. We need to know much more about what works and what doesn’t. This will require investment in research and communication, and it will take time to change the system. The public also needs to realize that refusing to insure certain tests and treatments that do not work is a good approach, not a bad one as some critics have charged.