National Journal’s Margot Sanger-Katz picked up a juicy Washington tidbit worth passing on to healthcare reporters and interested readers. The GOP has designed brand new language that pretties up the notion of Medicare vouchers.
Recall that vouchers were at the heart of the plan that Paul Ryan, the Wisconsin representative, pushed when he ran as Mitt Romney’s VP. Under his program (and others like it), seniors and people with disabilities would get a sum of money from the government to buy health insurance in the private market. If the money was enough, great! If not, they’d have to pay the rest out-of-pocket. It’s a big cost shift from the government to elderly and disabled people, especially to the sickest and poorest among them.
Some brief history of vouchers, and how we describe them, is in order: Since economists Henry Aaron and Robert Reischauer called for voucherizing Medicare back in the mid-1990s, the concept has been painted with a lot of lipstick. Aaron and Reischauer dubbed it “premium support.” After all, the government would be giving Medicare beneficiaries money “support” to pay for a “premium.” But lipstick on a pig doesn’t do away with the pig. And a voucher plan by another name is still a voucher plan.
“Premium support” seemed less harsh than “voucher” and conveyed a veneer of objectivity. The wonk and foundation community liked the term. Sometimes those folks used the term “defined contribution.” That was really wonky, and most Americans had no clue what it meant. It was a term borrowed from the pension world, where Americans once had good “defined benefit” plans, in which benefits were determined by a formula based on age and years of service on the job. Those have been replaced by the less good “defined contribution” plans, like 401(k)s, in which employer contributions are optional, and workers’ own contributions determine the benefit they eventually get. “Defined contribution” in the context of Medicare means the size of the contribution the government makes determines how good the coverage will be.
In the late 1990s and afterwards, voucher supporters, notably conservatives and Republicans, used the term “Medicare privatization.” The term meant that private insurers would have a larger role in providing Medicare benefits, on the theory they could provide benefits cheaper than the government. That has not necessarily been the case. Currently, private insurers provide the prescription drug benefit for all beneficiaries, and they also provide all Medicare benefits for million or so Americans who have chosen Medicare Advantage plans. For the rest of Medicare recipients, the government still provides the benefits.
The idea of privatizing Medicare has not resonated with large segments of the public. Republicans—who mostly supported the concept—believe it is time for new language, as the National Journal reported. Testing showed that people think of the word “premium” as something high end, like a car, not insurance, and certainly not something low end like paying more for their healthcare. Sanger-Katz reports that the testing showed that the public likes the words “choice” and “competition.” Sounds a little like Frank Luntz, doesn’t it? So Republicans have banished “premium support” from their talking points in favor of the new term, “competitive bidding.”
Proposals floating around Congress these days call for privatizing Medicare via vouchers, but they don’t use the term. In general, the proposals would encourage insurance companies to bid against each other, to produce the lowest-cost policies in the private market. Customers would receive a sum of money—aka a voucher— to help defray the cost. Tennessee Sen. Bob Corker introduced his “Dollar for Dollar Act,” and a good chunk of it deals with what he calls structurally transforming Medicare by “keeping fee-for-service Medicare in place, competing side-by-side with private options that seniors can choose instead. Utah Sen. Orin Hatch used the term “competitive bidding” and said allowing health plans “to compete with traditional fee-for-service Medicare” would reduce costs and preserve the quality of care. The plans would allow people to choose between these voucherized plans and traditional Medicare, preserving the notion of choice.
Your argument is totally one-sided and fails to expose how the Obama Administration is shifting more costs to seniors through ACA policies. The reality is that the national economic situation requires tightening the belt. The ACA is chomping down pretty hard. The Republicans are suggesting a different method of doing the same thing. You don't have to like it, but at least be bold enough to report both sides of the story, including how ACA is making drastic cuts to Medicare Advantage, a move that is expected to harm seniors in 2014.
#1 Posted by David Bynon, CJR on Fri 1 Mar 2013 at 08:29 AM
Re your comments: Currently, private insurers provide the prescription drug benefit for all beneficiaries, and they also provide all Medicare benefits for million or so Americans who have chosen Medicare Advantage plans.
Unfortunately, what you are stating is absolutely untrue.
You need to do more research on how Advantage and Prescriptions plans actually work in the real world. Advantage plans and the prescription plans are plans that establish private insurers as actually sub-contractors to the Federal Government for servicing of Medicare, primarily for processing payments. The sub-contractors have contracts with the Federal Government to provide varying plans based on fixed contracts with the Fed, for specific annual payments by the Fed to the private insurance companies. It is a complex and very profitable system, based on fees and profit/expense margins based on Medicare demand. The paybacks from the Fed are setup to private insurance companies based on actual medicare payouts per demographic makeup of varying counties, and regions within the US. The Medicare Program, and not the private insurance company is still paying the basic medicare costs of the insured individual.
Why perpetuate convenient and superficial dis-information that continues supporting ignorance in the general public debate platforms? How do you think a few individuals in Congress have made so much personal profit based on Medicare contracts between their private insurance corporations and the Fed? What do you think is the major contributing factor to escalating cost for health insurance in the US compared to a good number of European developed nations?
#2 Posted by lisa , CJR on Tue 5 Mar 2013 at 12:17 PM