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Medicare Advantage Plan Analysis

By November 8, 2012Commentary

Many so-called think tanks or research institutes are just thinly veiled ideological fronts.  The Urban Institute is one of those; and is a leading shill for the current administration’s health policies, which so far have been pretty disastrous and are about to become spectacularly so.  In one of its latest reports the Institute attacks Medicare reforms that would use a premium support methodology to control spending, claiming that such approaches would harm beneficiaries by cost-shifting to them, although they do acknowledge that the notion of a fixed-dollar contribution toward Medicare coverage would likely lead to more competition and lower premiums for many plans.   (Urban Inst. Brief)   In regard to harming beneficiaries, the authors would do well to look at what is happening in traditional medicare, where the continuing squeeze on provider reimbursements is steadily reducing the number of participating providers and hurting hospitals that serve the largest number of elderly poor patients.  While some Medicare Advantage plans have higher costs than traditional Medicare, this is largely because providers are able to negotiate higher rates with those plans and use those rates to offset the traditional Medicare cuts.  If all the Medicare beneficiaries in MA, now about a fourth of the total, went back to Medicare fee-for-service, the squeeze on providers would be even worse and we would have an access crisis.  The other thing these authors and the population in general seems to completely misunderstand is that we have to reduce spending and that means people, not government are going to pay more, one way or another.  The current rate of spending simply cannot continue and won’t continue, because there is a limit to what any government can either tax from its citizens or borrow, particularly if it wants to have an economic growth.  The United States is already at that limit, and the strongest evidence for this is our weak economy.  Medicare Part D has worked well, switching all of Medicare to a similar approach is the best and fairest cost-control approach.

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