10 Things About Obamacare That Just Don’t Make Sense

[P@triot]

Yes, spending would increase - BECAUSE THE REPUBLICANS WOULD RE-AUTHORIZE THE BIG FAT SUBSIDIES TO INSURANCE COMPANIES. They said so.

Yawns.

There are no "subsidies" to insurance companies. Negged for spreading misinformation. "Yawns". "Yawns". "Yawns".

 

[Greenbeard]

Yes, spending would increase - BECAUSE THE REPUBLICANS WOULD RE-AUTHORIZE THE BIG FAT SUBSIDIES TO INSURANCE COMPANIES. They said so.

Yawns.

There are no "subsidies" to insurance companies. Negged for spreading misinformation. "Yawns". "Yawns". "Yawns".

Yes, there are subsidies. Learn how the world works.

Subsidized Payments: On average, CMS's payments to Medicare Advantage plans are higher than fee-for-service spending for beneficiaries with the same health status. In 2011, Medicare Advantage payments are estimated to be 110 percent of the amount the program would pay for the same beneficiaries under traditional Medicare (Parts A and B).

The additional spending on Medicare Advantage enrollees is in effect subsidized by the nation's taxpayers, who pay more to help pay for the Part B program than they would if the same beneficiaries stayed in traditional Medicare. And the three in four Medicare enrollees who are not in Medicare Advantage plans pay more in higher Part B premiums to help cover the additional spending.

The Medicare Payment Advisory Commission, a nonpartisan panel that advises Congress on Medicare-related issues, recommended revising the method of setting the Medicare Advantage payments. The commission said that there should be "financial neutrality" between payments under the traditional Medicare and the Medicare Advantage program.

More importantly, the value of those subsidies that actually gets passed on to beneficiaries is minimal. See the work of Frakt, Pizer, and Feldman, as explained by Austin Frakt:

Abstracting from the economics wonkery a bit, let me put research findings on Medicare Advantage (MA) payments plainly.

Payment to MA plans has gone way up since 2003. Did the payment increase largely benefit beneficiaries or not? This is a current political and policy debate, about which much has been written in the media (both traditional and blogospheric). It turns out the answer is known and quantifiable. My work (with Steve Pizer and Roger Feldman) shows that for each additional dollar spent by the federal government (taxpayers) on the program since 2003, just $0.14 of it can be attributed to additional value (consumer surplus) to beneficiaries (see also: findings brief).

What do we make of the other $0.86? That goes to the insurance companies but doesn’t come out “the other end” in the form of value to beneficiaries. In part it is accounted for by the costs of the additional benefits and in part it is captured as additional insurer profit.

So, do higher MA payments produce little value to beneficiaries, as Obama claims, or are the benefits they fund important to maintain, as Republicans would have us believe? The balance of the evidence is on Obama’s side. In fact, it is a landslide: for each dollar spent, 14% of the value reaches beneficiaries and 86% of it goes elsewhere (profit or cost).

Cuts to MA should be a no brainer.