Note: This article appeared as a Guest Viewpoint in The Siuslaw News (Florence, OR) on September 8, 2012
Romney-Ryan promise to
not auger well
for Americans looking forward to
concerned about aging
Since 1964, seniors facing the
medical and financial uncertainties that
come with advancing years
Medicare’s guarantee of access to
health care and
payment of covered
benefits. It has been a godsend for the
fearing or facing sickness and
hard times, and assurance to
who might otherwise have to cope
with mom and dad’s
inability to pay
their medical bills.
In 2012, health care security is a paramount concern as our population ages. The Kaiser Family Foundation found that “nearly half of all Medicare beneficiaries have three or more chronic conditions, nearly one-third have a cognitive or mental impairment, and more than one-fourth report being in fair or poor health.” Additionally, as a category, Medicare beneficiaries depend on Social Security as their primary source of income, with almost half of them living on incomes of less than twice the federal poverty level.
Prospectively, Romney-Ryan would effectively deny people like them — the aged, infirm and impecunious — Medicare’s uniform, comprehensive benefits. Instead, a senior, perhaps with mental impairment, diabetes, high blood pressure or a history of arrhythmia, a fixed-amount government voucher in hand, would be left to shop the for-profit health insurance market for coverage, trying to understand policy provisions, all the time worrying whether he or she has really understood the fine print.
The voucher amount would be adjusted annually, not to rising medical costs but to an historically lower index. The non-partisan Congressional Budget Office concluded this approach, adopted by the 2012 Republican House, in fact, would shift a growing share of medical costs to seniors.
Rather than confronting this medical inflation effect on seniors, Romney-Ryan relies on dubious medical cost savings resulting from market-based competition between insurance companies offering policies through state “exchanges” (ironically not unlike Obamacare exchanges already rejected by a posse of Republican governors gunning for Obamacare).
Exchanges or not, the CBO’s 2010 study shows competition among insurance companies does not drive down provider costs below those achieved by Medicare. On the contrary, “Medicare’s current payment rates for providers are lower than those paid by commercial insurers ... the program’s administrative costs are lower than those for individually purchased insurance. Beneficiaries would therefore face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.”
In effect, Romney-Ryan, applying Bain Capital’s “creative destruction” approach, would “protect and strengthen” Medicare by destroying it. “Traditional” Medicare, to be offered as an option to the voucher system, would become “the insurer of last resort” as insurance companies “adverse select” and “risk adjust” to cherry pick healthy enrollees. As with state programs designed to provide coverage to uninsurables selected and adjusted against, “traditional” Medicare would be left with the more sickly and costly, necessitating rates reflecting these higher health risks. Public financing inevitably would become fiscally and politically untenable. Romney-Ryan and Medicare would be the same in name only.
As to the Romney-Ryan claim that Medicare was weakened by the transfer from it of $716 billion to Obamacare? Not a penny of enrollee benefits was cut. The money represents negotiated future reductions of insurance company and hospital subsidies moved to the Affordable Care Act to fund the prescription drug donut hole and preventative care improvements now provided to Medicare participants under Obamacare. (Reduction of insurance company Medicare Advantage subsidies alone extends Trust Fund solvency by six years.)
For nearly 50 years Medicare has allayed the medical financing concerns of seniors and their families. The facts remain: It outperforms private health insurance, enjoys higher satisfaction among its enrollees than private health insurance and delivers more health care bang for the buck. By dumping seniors into the marketplace for private insurance policies, Romney-Ryan destroys Medicare. They might at least have changed the name to protect the innocent.
Rand Dawson, a health reform activist in Florence, Oregon, is an attorney who has represented and litigated for insurance companies.
Arnold Buchman, retired, was in-house counsel to the western region group operations of a major health insurer.