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Let the Public Option Rest in Peace

August 24, 2016
12:40 pm

Most will remember that one of the most spirited debates during congressional consideration of the Affordable Care Act, back in the early days of the Obama administration, concerned the proposed creation of a government-run health insurance plan that would compete alongside private plans in the new insurance exchanges.  Lawmakers rightly rejected the idea, arguing that it would create a degree of federal involvement in health insurance far exceeding the comfort level of moderates and conservatives, create an uneven and potentially destabilizing playing field in the health coverage marketplace, and cause a displacement of employer-based insurance as a result of federally-set, artificially-low premiums and deductibles.

Even HHS Secretary Kathleen Sebelius said, at the time, that the public option was not “an essential element for reform.”

As we’re witnessing the health insurance exchanges facing some well-publicized difficulties today, we’re hearing more calls from candidates and interest groups to bring back the public option.

We need to give those calls a deaf ear.

No doubt, the next Congress and administration will need to address the state of the Obamacare exchanges, making the right policy decisions to enable health plans to compete without absorbing unsustainable losses.  Forcing those plans to compete with a taxpayer-subsidized insurance alternative will only bring less stability, not more.

And just as important to the long-term sustainability of our healthcare system and accessibility to care for a growing number of patients, the public option is detrimental to physicians and hospitals.  A government-run plan that reimburses for services at Medicare rates will “disrupt the fragile financial system that sustains hospitals today.”

The quotation in the previous paragraph came from a letter jointly written this summer by the American Hospital Association and the Federation of American Hospitals.  Their letter points out that Medicare is paying less than the actual cost of care being delivered to patients.  They note, “adding millions more enrollees whose health care would be reimbursed at Medicare rates would likely threaten access to needed health care services, particularly for those in vulnerable communities.”

They added, “We continue to believe the framework of health care exchanges providing subsidized coverage, combined with expansion of the Medicaid program, was the best means of achieving universal coverage.  The addition of a public option at this time would only introduce greater uncertainty to a health care system that is experiencing rapid transformation.”

We agree.  Let’s strengthen the health insurance exchanges and leave the public option as an interesting chapter in the history of healthcare policy debates.

Campaigns, Honesty and the Future of Medicare

August 17, 2016
10:20 am

It’s like a bad rerun, but one with real consequences.  Every two years, some political candidates and the interest groups that support them decide the best way to boost their share of the 65-and-older vote is to scare these seniors into believing that the candidate on the other side is going to place their Medicare program in grave danger.  This tactic is obviously successful or candidates wouldn’t keep doing it, but its effectiveness doesn’t make it right.

There is no reasonable disagreement that the Medicare status quo is not sustainable.  The Medicare Board of Trustees, in its most recent actuarial projection, said the program will become insolvent in 2028.  We need to discuss solutions to strengthen Medicare.  Campaigns are traditionally the platform through which new ideas can be submitted for public debate and consideration.  That’s not happening, though, when opportunistic groups portray any reform ideas as a weapon that will obliterate grandma’s healthcare.

This is happening already in the 2016 campaign.  In New Hampshire, for example, Senator Kelly Ayotte (R-NH) is being falsely accused by a national labor union of advocating reforms that will cost seniors thousands of dollars.  This isn’t true, and an op-ed I wrote on the subject was published today in the Manchester Union Leader.  I’m sharing it with you below.

Those of us who realize the need for sensible, essential Medicare reform need to speak out against these exercises in political misinformation.  The stakes are high and we need to fight their version of Mediscare horror fiction with the facts.   Here is the text of the Union Leader op-ed:

One of the most tried and true campaign strategies, utilized for decades now, is to scare senior citizens to the polls by convincing them that their Medicare and Social Security are being threatened. Politicians and their allies keep doing this, regardless of the tactic’s moral and ethical implications, because it works. Medicare is such an important lifeline to seniors, they naturally respond if they think they’re about to lose it, or if they believe their care will start costing them more money.

New Hampshire voters are the current targets for Medicare scare tactics. The American Federation of State, County and Municipal Employees labor union (AFSCME) has been airing television ads showing a woman caring for an elderly relative and saying that Sen. Kelly Ayotte wants to turn Medicare into a “voucher program, costing us thousands.” It’s a well-produced piece of television that would give any Medicare beneficiary or caregiver, not armed with facts, reason for concern.

Here’s the problem. This ad specifically, and most of those in its genre, rely on gross distortions and, in many cases, outright untruths to frighten the bejeebers out of its target audience. And people and organizations dedicated to building a stronger Medicare program deplore campaign propaganda like this because it makes it all the more difficult to take action to save a program that has a very short solvency timeframe.

New Hampshire voters should be clear on one thing. Nobody in Congress has proposed changes to Medicare that will cost them thousands of dollars. In fact, just the opposite is true. The nonpartisan Congressional Budget Office has said that the reforms advocated by Sen. Ayotte, and others from both parties, would actually save most seniors money on their Medicare out-of-pocket costs.

When groups like AFSCME use scary terms like “voucher program,” they are actually referring to giving seniors greater power of consumer choice to have the kind of health coverage that meets their specific needs. This works well, for example, in the Medicare Part D prescription drug program, in which seniors choose from among various plans with different premium costs and coverage levels. A recent national survey showed the Part D program enjoying an 88 percent approval rating among its enrollees. And the Medicare Advantage program, which has seen a significant rise in beneficiary participation, also allows seniors a choice of plans that are competing to offer the best value.

Consumer choice is not as ominous a phrase, however, as voucher program.

The larger problem here lies in the fact that campaigns set the stage for future policy making. To advocate no changes to Medicare is tantamount to supporting its demise. Medicare’s actuaries reported this year that the program will become financially insolvent in 2030. AFSCME and others that want to punish proponents of Medicare reforms are essentially saying they’re fine with future generations, and even today’s middle-aged workers, being out of luck when they reach 65 and expect Medicare coverage.

New Hampshire voters, and all of us in this country, for that matter, deserve more honesty and more responsibility in the way campaign rhetoric is carried out. We need a forthright, candid national discussion on the future of Medicare without falsely accusing Kelly Ayotte and others of wanting to bankrupt someone’s grandmother. Even if it has historically worked to scare seniors to the polls, it has never been the right thing to do.