A Wee Test of the Free Market in Healthcare

A WEE TEST OF THE FREE MARKET IN HEALTHCARE….As part of the 2003 Medicare prescription drug bill, Republicans expanded the Medicare+Choice program into something called Medicare Advantage. This was all part of an effort to get the free market involved in Medicare, but since it turned out the free market wasn’t very interested, Republicans did what they usually do in such circumstances: they turned on the corporate welfare spigot. In this case, it took the form of bribing insurance companies to participate by paying them more for the same services than Medicare pays directly to doctors under traditional Medicare. The New York Times reports:

Federal officials said that the fastest-growing type of Medicare Advantage plan generally does not coordinate care, does not save money for Medicare and has been at the center of marketing abuses.

These “private fee-for-service plans” allow patients to go to any doctor or hospital that will provide care on terms set by the insurer. In most cases, no one manages the care. And some patients have found that they have less access to care, because their doctors refuse to take patients in private fee-for-service plans.

Moreover, those plans may be more expensive than traditional Medicare for some patients, because the co-payments for some services may be higher. The Medicare Payment Advisory Commission says that the cost to the government is also higher because it pays the private fee-for-service plans, on average, 19 percent more than the cost of traditional Medicare.

Richard S. Foster, chief actuary for the Medicare program, said “the additional payments to Medicare Advantage plans, above and beyond the costs” of traditional Medicare, were causing higher premiums for all beneficiaries and speeding the depletion of the Hospital Insurance Trust Fund for Medicare.

Private insurance carriers charge more than Medicare to provide medical services because, duh, they’re a middleman and they have to make a profit. But private carriers, by movement conservative definition, must be better than any government program, so we have to find a way to get them involved. How? By paying them 19% more! So they can provide poorer service! And rip off vulnerable elderly patients (read the story for details)! And deplete the Medicare trust fund even faster than before!

Your Republican Congress at work. No wonder these guys got thrown out.