A simple case against Wyden-Ryan

[Greenbeard]

Henry Aaron and Austin Frakt offer a perspective on why now is not the time to pursue Wyden-Bennet-esque plans. It's a succinct argument but two points in particular stand out:

First, Medicare is already in the midst of a substantial series of reforms that passed in late March 2010 (Note: "Medicare growth rates, in general, have been rising at a 2.5% annualized rate over the past 18 months."):

For one thing, the United States has embarked on a program of health system reform that promises to control the growth of spending and that will provide additional information on whether premium support could work for Medicare enrollees. The Affordable Care Act (ACA) sets in motion a process of experimentation and change, including the implementation of accountable care organizations, bundled payments, comparative effectiveness research, a center for innovation, and an independent payment advisory board that aim to transform the financing and delivery of health care. The ACA also reduces reimbursements to certain providers, cutting Medicare spending by $500 billion over the next decade. No part of the ACA puts the burden of cost control on beneficiaries. [...]

In addition, the ACA creates state health insurance exchanges much like the ones that premium-support advocates envision for Medicare. The state-based exchanges will enroll an estimated 29 million people, many receiving subsidies (vouchers) to defray part of the cost of insurance from private plans. It would be rash to move the Medicare population into exchanges before the problems of setting up the ACA exchanges have been solved. The Medicare population is larger, at nearly 50 million, and far more challenging than those covered by the ACA, since many Medicare beneficiaries have mental handicaps or some degree of dementia. Getting the ACA exchanges up and running will provide additional information to guide a decision on whether they can handle Medicare enrollees as well.

Second, private competition already exists in Medicare and it has driven up spending.

And in fact, most elements of the competitive system that voucher advocates seek already exist. The results to date are not encouraging. Medicare enrollees may choose among traditional Medicare and many private plans, including health maintenance organizations. Although these private plans have been paid more than the average cost of traditional Medicare, three fourths of the enrollees have remained under the traditional system. Even if one subtracts out these extra payments to private plans, their costs have exceeded those of traditional Medicare — by 2% in urban areas, 6% in rural areas.

 

[Oddball]

Hot off the e-mail blast from OIRA, huh?