The Romney/Ryan campaign and conservative pundits have begun to cite a study by three Harvard economists as evidence that the Medicare voucher plan that the Republicans are now supporting would actually lower health care costs for seniors. One of the authors of that study bluntly tells them to “stop misusing my Medicare study.”
Supporters for the Romney-Ryan approach to Medicare have a new talking point. They say a new study by “three liberal Harvard economists” proves that the plan’s competition will reduce health care costs without harming beneficiaries. But the study doesn’t say that.
And I should know. I’m one of the economists who wrote it.
Both Mitt Romney and Paul Ryan have said they would like to convert Medicare into a “premium support” (nee voucher) system. Their plans are different, and Ryan himself has proposed several versions. But they share a basic architecture. Starting ten years from now, new retirees would not receive a Medicare card, as they would today. Instead, they would receive a voucher and shop for an insurance policy in a specially regulated market…
How would this affect seniors? In particular, how many seniors would end up paying more to stay in traditional Medicare?
That’s the question that Zirui Song, Mikchael Chernew, and I set out to answer in the study, which was published in the Journal of the American Medical Association. To do this, we examined what would have happened if, today, something like the Romney-Ryan plan were in place: In other words, if today’s seniors were getting vouchers, how much would those vouchers be worth?
We found that 24 million seniors, or about two-thirds of the people presently enrolled in the traditional Medicare program, would have to pay more—specifically, an average of $64 per month or $768 per year. Some seniors already enroll in private plans, as part of the “Medicare Advantage” option that has existed, in one form or another, for many years. About 7 million seniors or more than 90 percent of that group would have to pay more.
And he explains in detail where they go wrong in misinterpreting his study:
First, it confuses costs and payments. Medicare Advantage plans bid less than traditional Medicare, but they are paid more. The plans are officially supposed to use these higher payments to sweeten the pot—add additional benefits, reduce cost sharing, and the like—though some likely go for profit as well. This is why the Affordable Care Act reduced the amount that the government pays to managed care plans, over howls of protest from conservatives. Bidding less does no good for the program if the government then overpays relative to what was bid.
Second, they miss a key part of the reason why the Congressional Budget Office estimated that Ryan’s voucher proposal would cost seniors more. Medicare Advantage plans can only cost what they do because the traditional Medicare program is in place to help them. Specifically, Medicare sets very low payment rates to providers, and Medicare Advantage plans bargain up a bit from those rates. Get rid of the traditional Medicare program, or even reduce its enrollment substantially, and the estimated cost of Medicare Advantage premiums skyrockets.
I predict this will not stop them from making the same claims again.
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Chiroptera
August 27, 2012 at 12:14 pm (UTC -4) Link to this comment
Starting ten years from now, new retirees would not receive a Medicare card, as they would today.
Ten years, eh? Shit. Well, there goes my retirement. I’ll be working until the day I drop dead.
d cwilson
August 27, 2012 at 12:40 pm (UTC -4) Link to this comment
Chiroptera:
I wouldn’t worrying about working until you drop dead. In ten years, you’ll be lucky if President Romney hasn’t found a way to outsource every job, all the way down to and including, working the counter at McDonalds, to Asia.
Bronze Dog
August 27, 2012 at 12:42 pm (UTC -4) Link to this comment
I predict that the sun will appear to rise from the eastern horizon sometime around tomorrow morning.
Marcus Ranum
August 27, 2012 at 1:12 pm (UTC -4) Link to this comment
They should have had Barton make up a study performed by Thos Jefferson. When you attribute stuff to dead people, they don’t come back and make you look stupid. Hence, “jesus says: …” only got popular after he was dead and buried.
rickdesper
August 27, 2012 at 1:39 pm (UTC -4) Link to this comment
Shades of Annie Hall.
Marshall McLuhan: I heard what you were saying! You know nothing of my work! You mean my whole fallacy is wrong. How you got to teach a course in anything is totally amazing!
lorn
August 27, 2012 at 2:31 pm (UTC -4) Link to this comment
Chiroptera @ #1
The option of your having any retirement isn’t even being contemplated by the GOP. Bain Capital is the model and one of the first things they did was raid the retirement fund and reduce it to the absolute legal minimum. The end result is that when the dept the leveraged using the funds plundered from the retirement fund comes due the empty shell implodes.
Combine that with the systematic looting of your 401-k and savings. There will be no retirement.
This is all by design and is seen by the free market folks as the way it should work. That ship has sailed. We are now down to negotiating the terms of your non-retirement.
Specifically exactly how much death, disability, and suffering will be allowed onto the playing field to motivate the peons to work longer, harder, and be more motivated to become wealthy. It is highly entertaining to see the peasants claw their way up and jump for golden ring that has been artfully hung just out of reach.
It has always been GOP dogma that external realities and national economic health are irrelevant when determining economic outcomes. What the poor really need is more motivation. And nothing motivates poor people like pain. In this case the pain of poverty, an overworked old age, and a chronic lack of adequate health care.
But no worries, when the GOP closes a door it, in its infinite wisdom, opens a window. No, you will not be able to afford real science based medicine and effective modern treatments with those vouchers. You will have a wide variety of inexpensive CAM treatments to chose from. Crystals, homeopathy, ancient Tibetan chanting, prayer, potions and poultices, and lots and lots of enemas to keep you entertained until the day you drop dead from lack of medical care.
The good news is that with major medical issues left untreated your degrading and very uncomfortable non-retirement will be short.
It is all by design. If you want to know why they want you to die earlier than later look up “Dead Peasant Insurance”. They have a plan and you are included.
yoav
August 27, 2012 at 5:25 pm (UTC -4) Link to this comment
I’m sure he will get invited to explain how his study is being misrepresented by mittens on fix noise any day now….