Paul Krugman: The Plot Against Medicare

Paul Krugman says the plot against Medicare is moving forward, aided and abetted by some surprising allies:

The Plot Against Medicare, by Paul Krugman, Commentary, NY Times: The plot against Social Security failed: President Bush’s attempt to privatize the system crashed and burned when the public realized what he was up to. But the plot against Medicare is faring better: the stealth privatization embedded in the Medicare Modernization Act, which Congress literally passed in the dead of night back in 2003, is proceeding apace.

Worse yet, the forces behind privatization not only continue to have the G.O.P. in their pocket, but they have also been finding useful idiots within the newly powerful Democratic coalition. ... There’s no nice way to say it: the NAACP and the League of United Latin American Citizens have become patsies for the insurance industry.

To appreciate what’s going on, you need to know what has been happening to Medicare... The 2003 Medicare legislation created Part D, the drug benefit for seniors... Medicare, Part D isn’t provided directly by the government..., you can get it only through a private ... insurance company. At the same time, the bill sharply increased payments to Medicare Advantage plans, which also funnel Medicare funds through insurance companies.

As a result, Medicare — originally a system in which the government paid people’s medical bills — is becoming, instead, a system in which the government pays the insurance industry to provide coverage. And a lot of the money never makes it to the people Medicare is supposed to help.

In the case of the drug benefit, the private drug plans add an extra, costly layer of bureaucracy. Worse..., they have much less ability to bargain for lower drug prices than government programs like Medicaid and the Veterans Health Administration. ...

Meanwhile, those Medicare Advantage plans cost taxpayers 12 percent more per recipient than standard Medicare. In the next five years that subsidy will cost more than ... it would cost to provide all children ... with health insurance. ...

With the Democratic victory..., you might have expected these things to change. But the political news over the last few days has been grim.

First, the Senate failed to end debate on a bill — in effect, killing it — that would have allowed Medicare to negotiate over drug prices. ...[I]n spite of overwhelming public support..., 42 senators, all Republicans, voted no...

If we can’t even establish the principle of negotiation, a true repair of the damage done in 2003 ... seems politically far out of reach.

At the same time, attempts to rein in those Medicare Advantage payments seem to be running aground. Everyone knew that reducing payments would be politically tough. What comes as a bitter surprise is the fact that minority advocacy groups are now part of the problem, with both the NAACP and the League of United Latin American Citizens sending letters to Congressional leaders opposing plans to scale back the subsidy.

What seems to have happened is that both groups have been taken in by insurance industry disinformation, which falsely claims that minorities benefit disproportionately from this subsidy. It’s a claim that has been thoroughly debunked...— but apparently the truth isn’t getting through.

Public opinion is strongly in favor of universal health care, and for good reason: fear of losing health insurance has become a constant anxiety of the middle class. Yet even as we talk about guaranteeing insurance to all, privatization is undermining Medicare — and people who should know better are aiding and abetting the process.

_________________________
Previous (4/16) column: Paul Krugman: Way Off base
Next (4/23) column: Paul Krugman: A Hostage Situation

Comments

[anne]

A column of special importance, though all Paul Krugman columns are important. Thank you, Paul Krugman.

[anne]

http://www.nytimes.com/2007/04/19/washington/19drug.html?ex=1334635200&en=71e59aee184e34ed&ei=5090&partner=rssuserland&emc=rss

April 19, 2007

Senate Bars Medicare Talks for Lower Drug Prices
By ROBERT PEAR

WASHINGTON — A pillar of the Democrats' program tumbled on Wednesday when the Senate blocked a proposal to let Medicare negotiate lower drug prices for millions of older Americans, a practice now forbidden by law.

Democrats could not muster the 60 votes needed to take up the measure in the face of staunch opposition from Republicans. The opponents said private insurers and their agents, known as pharmacy benefit managers, were already negotiating large discounts for Medicare beneficiaries.

Fifty-five senators, including six Republicans, supported a Democratic motion to limit debate and proceed to consideration of the bill; 42 senators voted against it. The Senate had a brief debate on the merits of the bill, which is a priority for the new Democratic majority in Congress.

Republicans framed the issue as a choice between government-run health care and a benefit managed by the private sector. The benefit is delivered and administered by private insurers under Medicare contracts....

[Republicans are doing all they can to destroy Medicare, because, well, because they are Republicans.]

[a]

Krugman may be right, or he may be wrong - who knows? His record of distortion and deliberate omission is so strong that one would be foolish to believe anything which he says.

[anne]

http://www.cbpp.org/4-3-07health.htm

April 3, 2007

Low-Income and Minority Beneficiaries Do Not Rely Disproportionately on Medicare Advantages Plans: Industry Campaign to Protect Billions in Overpayments Rests on Distortions
By Edwin Park and Robert Greenstein

The Medicare Payment Advisory Commission (MedPAC), Congress' expert advisory body on Medicare payments, reported this month that Medicare is losing billions of dollars each year because of excessive payments to private insurance plans through the Medicare Advantage program. (Under that program, Medicare beneficiaries may elect coverage through private "Medicare Advantage" plans rather than through traditional fee-for-service Medicare.) Although private plans ostensibly were brought into Medicare to introduce competition and reduce costs, MedPAC has found that, on average, the federal government is paying the private plans 12 percent more than it costs to treat comparable beneficiaries through traditional Medicare.

In testimony before Congress, MedPAC chairman Glenn Hackbarth warned that these overpayments are driving up Medicare costs substantially and making the task of sustaining Medicare more difficult. Hackbarth stated that Medicare faces "a very clear and imminent risk from this overpayment that will put this country in an untenable position."

MedPAC has called on Congress to rein in the excessive payments to private plans and has recommended several specific reforms. The Congressional Budget Office (CBO) estimates that the largest of these reforms — MedPAC's proposal to "level the playing field" by adjusting the payment formula so private plans essentially are paid the same amounts it would cost to treat the same patients under regular Medicare — would save $65 billion over five years and $160 billion over ten years. Other MedPAC recommendations to address excessive Medicare payments to private plans would save tens of billions of dollars more.

In response, the private plans have launched a campaign contending that curbing the overpayments would harm low-income and minority Medicare beneficiaries. The plans claim that these beneficiaries rely disproportionately on private plans for "supplemental coverage" — that is, for help in paying Medicare premiums and cost-sharing and for some supplemental benefits not covered by traditional Medicare fee-for-service....

[anne]

http://www.cbpp.org/4-3-07health.htm

April 3, 2007

Private "Medicare Advantage" health plans were brought into Medicare to reduce costs, but Medicare pays them 12 percent more than the cost of treating comparable beneficiaries through traditional Medicare, adding billions to Medicare's costs.

Private plans argue that curbing the overpayments would harm low-income and minority Medicare beneficiaries, who they claim rely disproportionately on Medicare Advantage for supplemental coverage. This claim, however, is based on misleading use of data.

Medicaid, not Medicare Advantage, is the main form of supplemental coverage for low-income and minority Medicare beneficiaries. The most cost-effective way to help these individuals would be to strengthen the programs within Medicaid on which many of them rely to supplement Medicare coverage and to pay the Medicare premiums for them.

Moreover, the overpayments are harming millions of minority beneficiaries by raising their monthly Medicare premiums. The overpayments also are weakening Medicare's finances and ballooning its costs, thereby building pressure for sizable Medicare cuts in the future.

Curbing overpayments to Medicare Advantage plans would benefit Medicare beneficiaries by reducing costs and premiums and improving Medicare's long-term fiscal sustainability....

[anne]

What should be shocking and infuriating is that when there are simple ways to limit medical care costs, thereby improving long range medical care prospects of Medicare and showing the way for health care broadly, the simple ways are blocked by the health care industry and Congressional Republicans. Over and over and over. This is what Republicanism has come to.

[anne]

http://economistsview.typepad.com/economistsview/2007/04/paul_krugman_ch.html

April 6, 2007

Paul Krugman: Children Versus Insurers
Edited by Mark Thoma

Since resources are limited and choices must be made, what types of health care programs should the government support?:

NY Times: Consider the choice between two government programs.

Program A would provide essential health care to the eight million uninsured children in this country.

Program B would subsidize insurance companies, who would in turn spend much of the money on marketing and paperwork, and also siphon off a substantial fraction ... as profits. With what’s left, the insurers would provide additional benefits, over and above basic Medicare coverage, to some older Americans.

Which program would you choose? ...

[anne]

http://select.nytimes.com/2007/04/06/opinion/06krugman.html

April 6, 2007

Children Versus Insurers
By PAUL KRUGMAN

As I said, it's hard to see how anyone can, in good conscience, think that preserving subsidies to insurance companies is more important than providing health care for children. But that is, of course, exactly the position taken by the Bush administration, which is adamantly opposed both to any attempt to expand the children's health insurance program — in fact, the administration wants to cut its reach — and to any attempt to reduce Medicare Advantage payments.

The official reasons given for this position are evasive and dishonest....

[Children versus insurers; whose interests would we suspect this Republican Administration would favor?]

[anne]

I am continually grieved at the extent to which American health care is affordable and can remain so indefinitely, while Republican health care policy is bringing about less and less affordability. This, while we are tragically squandering resources on the lunatic occupation of Iraq. This is Republicanism.

[lonesome moderate]

There’s no nice way to say it: the NAACP and the League of United Latin American Citizens have become patsies for the insurance industry.

Wow. Say what you will about Krugman, he is certainly not a slave to political correctness. It will be interesting to hear what the "useful idiots" of the NAACP have to say in response.

[evagrius]

Has anyone tried assisting a senior to apply for the part D subsidy?

My impression is that it's somwhat like urging a swimmer to enter a pool of sharks.

[kharris]

"What seems to have happened is that both groups have been taken in by insurance industry disinformation...."

I would hazard a further guess. It may not be that the groups have been taken in by disinformation. It may be that the people they represent have been taken in. It may be easier to misinform the lay public on issues of great importance to them than it is to misinform professionals. Certainly, you'd want to do both, if you could. Didn't we see AARP flip in odd ways during the debate prior to passage of the Part D legislation?

[ken melvin]

Same tactics all over again.

[real person from the real world]

PK says it right here: "As a result, Medicare — originally a system in which the government paid people’s medical bills — is becoming, instead, a system in which the government pays the insurance industry to provide coverage. And a lot of the money never makes it to the people Medicare is supposed to help.

In the case of the drug benefit, the private drug plans add an extra, costly layer of bureaucracy. Worse..., they have much less ability to bargain for lower drug prices than government programs like Medicaid and the Veterans Health Administration. ...

Meanwhile, those Medicare Advantage plans cost taxpayers 12 percent more per recipient than standard Medicare. In the next five years that subsidy will cost more ..."

Insurance companies always used to be the bigest building in town, now they are developing privateers...
for months now, I get phone ads for "Affordable" health insurance in email or Taped Phone msgs at work, One sorry looking lady came by promoting health insurance 'alternatives' where you pay someone to bargin for cheaper costs, so not only do you pay for the bogus insurance, you're still stuck with a medical bill that you cannot afford.

Do we have so many people, this is the next entrepreneurial wave?

They used to help even out the vissisitudes of life, but with computer technology, they can weed out all the risks and risky people now....
Frankly, I suggest we just do away with insurance companies. They don't seem to perform any function other than funneling money to their investors.

[Bob Dobbs]

A friend of mine, a retired attorney, sat down last year to determine whether any of the drug coverages available thourhg Medicare would be better than what he had privately. With all his skills for analyzing and organizing data, it took him three days to figure it out. The average person doesn't have a chance.

This law was conceived in corruption and cynicism, and frankly I don't expect the Democrats to be any different about it all than the Republicans. They're going to believe what the people who put real money in their pocket say, and that's not you or me.

[Why So Expensive?]

Since there is not a child in the United States who abuses Lipitor, why is it necessary to drive up the cost of Lipitor by using such an expensive distribution system? Simply allow the elderly to buy Lipitor off the shelf like aspirin. The cost will go down dramatically. No negotiations needed. No expensive part D needed.

A simple warning label not to use Lipitor unless their doctor says to is enough. I trust the American people to do what is in their best interest.

[anne]

"There’s no nice way to say it: the NAACP and the League of United Latin American Citizens have become patsies for the insurance industry."

Notice, importantly, and sadly, AARP has decided to become a prime private health care insurance company. So, suddenly we have completely lost the use of AARP as an independent lobbying agent on behalf of our parents and grandparents.

[anne]

So, we have lost AARP as a trustful health care lobby while the NAACP and United Latin American Citizens have also been lost as public health care advocates. The change in advocacy of AARP has been 6 years in the making, but becoming a private insurer is nonetheless a saddening loss.

[anne]

http://www.matthewyglesias.com/archives/2007/04/good_news_for_people_who_like/

April 17, 2007

Good News for People Who Like Bad Health Care Policy
By Matthew Yglesias

The AARP makes a definitive move to becoming a major private insurance provider. But, yes, it intends to also be a major Beltway lobbying force. In essence, from here going forward it will be harder than ever to reform health care policy in a sensible direction.

[anne]

These setbacks in a necessary push to a national health care program are indeed serious, and the seriousness is coupled by the lack of a national health care proposal by any prime presidential candidate other than John Edwards.

John Edwards has set down a fine proposal for natioal health care, but Barack Obama has no health care plan after months of promising and even Hillary Clinton has failed to describe a plan. We must insist otherwise, and now.

[save_the_rustbelt]

I think PK is getting paranoid.

All Medicare health service, and most of the claims processing, has been privitized for decades. By Democrats.

If he wants to debate how the system should be structured and financed, fine. If he sees evil everywhere, his contributions have no value.

[robertdfeinman]

Just for the record AARP has always been a registered insurance company. It's lobbying activities have just been their PR cover.

They are expanding in health care, but have offered other insurance products for years.
From their annual report:

"Our total operating revenue in 2005 was $936 million, an increase of 6.6 percent
over 2004. Membership dues ($229 million) and royalties and service provider relationship management fees ($379 million) continued to be the two largest sources of revenue supporting AARP programs and services."

[anne]

No; this is different, AARP which refused to support negotiating drug prices for Medicare, will now be an arm of Aetna Insurance in offering health care coverage. AARP has been compromised these 6 years, and more so now.

Robert, however, makes a fine point about conflicted interests. AARP does not represent an older public, AARP markets to them.

[paine]

anne:

like the outside of third floor windows
i never DO real reseach

but could those two orgs
the naacp
and
latinos unlimited
be thinking of getting into
the health insurance biz like aarp???

[anne]

Paine:

"but could those two orgs
the naacp
and
latinos unlimited
be thinking of getting into
the health insurance biz like aarp???"

Quite a clever question; even if not directly thinking, the pull to private representation is strong and can easily skew public advocacy.

[evagrius]

"All Medicare health service, and most of the claims processing, has been privitized for decades. By Democrats."

You mean the federal government, with its rules and regulations, is a privite entity?

[Barry]

Posted by: a:

"Krugman may be right, or he may be wrong - who knows? His record of distortion and deliberate omission is so strong that one would be foolish to believe anything which he says."

It's always nice when a new poster immediately identifies themselves as a liar.

[anne]

Much to the continual reget of Republicans Social Security and Medicare have been immensely successful, popular and efficient since inception. That has not precluded a continual attempt to undermine each program. The programs transformed the lives of older Americans, making them immeasurably more secure. Fortunately the programs have been protected till this combination of Republican Administration and Congress, and the need is to understand and limit the current dangers. Even now, Democrats are not able to set aside a Republican block on negotiating Medicare drug prices which I find a disgraceful block.

[anne]

The worry of Republicans who will battle against health care reform is the Medicare can be used as a comparative health care program along with private insurers. Of course, that would be a delight for the rest of us.

[kthomas]

General Krugman strikes again!

I am particularly fond of his "useful idiots" line.

[Bruce Webb]

It is always interesting that the people who assert that Krugman has a known record of distortion never actually, you know supply any examples.

It is why the Right Wing has largely dropped the verb "fisking" from their vocabulary. From their point of view opponents of this war from the beginning were willfully blind and Robert Fisk by reporting things going badly was not only supporting the enemy but dishonest. So they "fisked" his stories, deconstructed them in terms of the propoganda they were happily swilling down, and basked in their sense of superiority. Only problem is that on the whole Fisk turned out to be right on the money and gleeful "fiskers" got themselves redefined as "chumps". So they dropped the term.

A lot of the Krugman failed track record falls into that exact category. He told us things were going badly, the Cornor Crowd 'knew' that wasn't so, and so the narrative hardened: shrill and wrong Krugman there, reasoned and right war supporters here. That subsequent events proved Krugman correct and any perceived 'shrillness' coming from the same well as me shouting "Holy Shit, watch out for that oncoming train!" has yet to penetrate certain thick skulls.

If in the face of Bush approval in the 80 range you were not 'shrill' in opposing him in the face of blank complacency you really were not doing your patriotic duty. We had a dangerous buffoon in charge of the country whose strings were being pulled by a cabal led by Cheney whose instincts could charitably be called "Authoritarian". Democracy called out for supporters to raise their voices and we did.

Sinclair Lewis wrote a book called "It Can't Happen Here". Well it almost did and if it took a certain amount of shrillness to knock 50 points off of Bush approval so be it.

Where and when did Krugman actually get anything seriously wrong? The plural of self-validating assertions is still not data.

[maria]

This is a good example of how money trumps democracy in the USA. If money wants X or doesn't want Y, X is passed and Y is not, irrespective of public wishes. Americans need to realize that the US is a democracy mainly in name, not in fact. More a plutocracy with some democratic "decorations".

[anne]

http://www.cbpp.org/4-20-07health3.htm

April 20, 2007

Forthcoming Medicare Trustees' Report May Contain Dubious "Medicare Funding Warning"
By Robert Greenstein and James Horney

While Medicare faces a serious long-term financing problem that must be addressed, the annual report of the Social Security and Medicare trustees to be released on April 23 may contain a dubious "Medicare Funding Warning" that is based on a deeply misleading measure of the program's health.

Under a last-minute provision slipped into the 2003 Medicare prescription drug bill, the Medicare trustees are required to estimate in their annual report on the program's financial status whether general fund revenues will pay for more than 45 percent of total Medicare expenditures in any of the next six years.[1] The law also requires that if two consecutive trustees' reports estimate that the 45-percent threshold will be exceeded, a "Medicare Funding Warning" must be issued and the President must submit, and Congress must consider, proposals to prevent the threshold from being reached.

Last year's Trustees' report contained a projection that the threshold would be exceeded in 2012. If this year's report projects the threshold will be exceeded in any year through 2013, this "trigger" will be pulled.

Unfortunately, the 45-percent threshold misdefines the basic challenge facing Medicare — which is how much the program is projected to cost, not what share of that cost comes from any given revenue source....

[anne]

Notice then how Congressional Republicans in 2003 were setting up Medicare to fail.

[James Killus]

Actually rustbelt, you bring up a good point.

Deprivatizing the health care part of Medicare would probably save a great deal of money. The reason why we have our current system is because of decades of the AMA shouting "No Socialized Medicine!"

But expanding upon the VA model to supply public health, clinical, and emergency services to small communities and urban areas that currently lack such services would make a great deal of sense and could be quite cost effective. And experience with an insurance-industry dominated world has made many physicians more receptive to this idea. It would go over especially well if such service were to substitute for the ruinious loans that are needed by many to complete medical school these days.

[bob]

I don’t agree with all of Krugman’s claims and columns, but he’s right on the money here.

I don't think that it's simple or easy to save money on healthcare. It will require greater use of generic drugs, which most Americans have been brainwashed into believing would hurt them. In reality, there is not one single published trial of generic versus brand name drug that showed superiority of brand name. Americans really believe that business is efficient, the government is not and that Medicare Advantage and similar schemes to benefit private business "get the fat out". Most Americans, when they vote, have voted against gun control and for privatization of healthcare. Just as many Muslim countries honestly vote for Islamist governments, democracy can become a race to the bottom controlled by angry slogans. Public opinion polls after a crisis don't mean sticking power.

[Jim in Chicago]

Bob Dobbs says...

"I don't expect the Democrats to be any different..."

Bob,

I'll be the first to criticize the Dems when they diserve it, but on this one you must have missed the part about how EVERY Democrat in the Senate voted to break the Republicans' filibuster.

[anne]

http://www.nytimes.com/2007/04/21/opinion/21sat1.html

April 21, 2007

The Medicare Privatization Scam

If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?

About a fifth of elderly Americans now belong to private Medicare Advantage plans, which — thanks to government subsidies — often charge less or offer more than traditional Medicare. As Congress struggles to find savings that could offset the costs of other important health programs, it should take a long and hard look at those subsidies.

The authoritative Medicare Payment Advisory Commission estimates that the government pays private plans 12 percent more, on average, than the same services would cost in the traditional Medicare fee-for-service program. The private plans use some of this money to make themselves more attractive to beneficiaries — by reducing premiums or adding benefits not covered by basic Medicare — and siphon off the rest to add to profits and help cover the plans’ high administrative costs.

Although the insurance industry insists that the subsidies are much lower and are warranted by the benefits provided, Thomas Scully, who headed the Medicare program for the Bush administration until 2003, told reporters recently that the subsidies were too large and ought to be reduced by Congress.

The largest private enrollment is in health maintenance organizations, which typically deliver care a bit more cheaply than standard Medicare and should not need their 10 percent subsidies, on average, to compete. The biggest subsidies — averaging 19 percent above cost — go to private fee-for-service plans, which are the fastest-growing part of the Medicare Advantage program. Unlike the H.M.O.’s, which at least manage a patient’s care and bargain hard with doctors and hospitals, these plans ride on the coattails of standard Medicare, typically providing access to the same doctors and paying them at the same rates. Thanks to the big subsidies they get, such plans are often a good deal for beneficiaries, charging less for the same benefits or adding benefits without raising prices.

The main losers are the beneficiaries in the standard Medicare program, whose monthly premiums are roughly $2 higher to help pay for the subsidies, and the taxpayers who pick up part of the tab. The subsidies also erode the long-term solvency of Medicare, which needs to rein in costs, not increase them with handouts to insurance companies.

When the Democrats first won control of Congress, it seemed possible that they might eliminate the subsidies — saving some $54 billion over five years — to finance a $50 billion expansion of a health insurance program for low-income children. But the insurance industry has mounted a furious lobbying campaign to head off any cuts....

[paine]

permitt me to let you in on the corporate gig here

uncle same will pay for all medical costs now
paid for by corporations

but the administrative distributive
monitoring system will remain as private
and as anarchic and inefficient as it is now

so long as corporations get off the hook
totally
and the huge private berhemouths
in the private health insurans industry
are protected

all this private option crap is pathway to universal uncle plus U provision

[wjd123]

I think Krugman could have strengthened his argument and avoided a lot of needless confusion by identifying where subsidy funds come from. He still hasn't done this.

Here are some examples of why this is important.

Sometimes Krugman talks about tax payer dollars and other time he talks about Medicare funds. Are the subsidies being given to private insurers coming from tax dollars ear-marked for Medicare such as the yearly premium taken out of social security and the FICA tax paid to Medicare by you and your employer during your working years, or are the subsidy dollars coming from non-dedicated general revenues? If it's the first, his idea of taking from Medicare funds to pay for uninsured children is objectionable. If it's the second, it's not.

So when he asks where would you rather have your tax dollar go, subsidizing insurance companies or paying for uninsured children? The answer for most people, I believe, would be neither if that tax dollar is a dedicated one. If it's a general fund dollar the answer would be insuring children.

However, like Medicare SCHIP can also insure children by using the private health insurance market rather than using traditional Medicaid. So his question isn't as either/or as Krugman indicates.

Another problem in not stating where the dollars for subsidies are coming from is that some writers seem to be saying that the subsidy money that is being spent on insurance companies would be better used bringing down Medicare cost. Which would indicate that all funds should stay with Medicare. But if they are general funds that becomes a weaker argument. General funds could be spent anywhere. This poses another problem for Krugman when he brings children into the argument: is he making a comparison or an only-this recommendation?

Krugman's argument that if the subsidies to health insurance companies are done away with it would strengthen Medicare's ability to compete would be true no matter where the subsidy dollars came from. However, if they are from dedicated funds the problem of fairness to all beneficiaries is also involved rather than just the problem of competition.

It seems to me that simply by indicating where the dollars for subsidies come from, most of his statements could be more easily understood.

If the Medicare Part D dollars for subsidies were taken form general revenues and put into the Medicare fund and then passed along to health insurance companies rather than just given outright to health insurance companies you couldn't make the argument that those dollars are fungible. They might be harder to trace, but their source is clear.

Krugman might think that where the funding comes from is obvious. That's being presumptuous.

[anne]

http://www.nytimes.com/2007/04/22/health/22infant.html?hp

In Turnabout, Infant Deaths Climb in South
By ERIK ECKHOLM

The reversal after years of progress in reducing infant death has raised questions about the impact of cuts in welfare and Medicaid and of poor access to doctors.

[anne]

Now, imagine having to read such a story in the New York Times. Medicare is threatened, Medicaid is threatened, 47 million Americans, most adult and most working lack health care insurance, welfare (shudder) is everywhere disparaged. Infant deaths? Please.

[anne]

About funding, please bear with me while I point out that we can somehow manage to afford to spend $14 billion a month directly on Iraq, but Medicare and Medicaid are threatened, and, yes, Medicaid has been threatened these last few years especially in the "South." The choice has been guns or butter and we have chosen guns, while continually denying a choice is even necessary.

[anne]

Medicare is threatened over a mere $54 billion that will be needless spent over the coming 5 years, and could easily be saved. But, we will spend $56 billion in the coming 4 months on the tragic insanity of Iraq. And, we wonder where the funding is to come for health care.

says...

This is a comment from Joyce. I think it is worse than you think. It is not just part D that is being privatized. I kept receiving mail from Healthnet and tossed it thinking it was an agressive private plan. But now I learn MediCal (California's Mediaide) is funneled thru them.

joyceroy@earthlink.net

[anne]

The health care columns by Paul Krugman over the months are critical and need to be set in context of this cursed war in and occupation of Iraq which is so crippling us in caring for ourselves let alone others. Ask me whether I will relent in my criticism of Iraq and I answer no, and no because of the direct morality as well as the crippling economic effects which we deny.

There was earlier a lunatic study from the University of Chicago showing how the war and occupation were cheap at twice the price, costless really, the dead and wounded nonetheless. Still there is the refrain of how cheap Iraq is as a portion of national income. Rubbish; complete rubbish. Iraq is cripplingly expensive here and abroad.

[anne]

Medicaid, by the way, has been made increasingly restrictive in the South, as though there were no price to be paid, but beyond initial complaints the new patterns supplant the old and little is heard till the price comes.

[wjd123]

Received a letter today from my Blue Cross/Blue Shield Medicare Advantage provider. They want me to join the Coalition for Medicare Choices. I do that by filling out a postage paid card and sending it to them. If I choose I can write a few sentences telling them why my Medicare health plan coverage is important to me. If I'm not sure why, they have provide a number of suggestions.

At the bottom of the card it reads "Neither the Centers for Medicare and Medicaid Services nor the Medicare program has reviewed these materials for accuracy or misrepresentation."

I think I know why they make this disclaimer. It's their claim that by joining the coalition it will "Ensure Congress does not cut your Medicare benefits or limit your choices."

Congress isn't doing anything to me, it is doing something to health insurance companies that offer Medicare Advantage plans: It's cutting their subsidies. They in turn are hinting quite strongly that they will cut my coverage or raise premiums if Congress acts.

[anne]

http://www.nytimes.com/2007/04/28/opinion/l28medicare.html

Medicare and the Market

To the Editor:

“The Plot Against Medicare,” by Paul Krugman, and your editorial “The Medicare Privatization Scam” correctly noted the higher costs of private for-profit health insurance. They might also have noted that a recent J. D. Powers survey found consumers more satisfied with not-for-profit private insurance plans than with investor-owned plans.

Even more important, as I have documented in my new book, “A Second Opinion,” there is good evidence that investor-owned medical care facilities are usually less efficient than comparable not-for-profit facilities. Further, their services are often of lower quality — occasionally with serious consequences for the health of patients.

Until we rid ourselves of the myth that the private market outperforms other alternatives in health care, we will never develop a good-quality, affordable system that covers everyone.

Arnold S. Relman, M.D.
Boston, April 21, 2007
The writer, professor emeritus of medicine and social medicine at Harvard Medical School, was the editor of The New England Journal of Medicine, 1977-91.

[anne]

WJD

"Congress isn't doing anything to me, it is doing something to health insurance companies that offer Medicare Advantage plans: It's cutting their subsidies. They in turn are hinting quite strongly that they will cut my coverage or raise premiums if Congress acts."

[anne]

http://www.nytimes.com/2007/05/01/opinion/l01krugman.html

Medicare Advantage

To the Editor:

We take offense at Paul Krugman’s column, “The Plot Against Medicare.” Not only was the column insulting, but it also ignored our goals to ensure adequate, affordable health care for the communities we represent.

Many African-American and Latino seniors prefer Medicare Advantage plans to traditional Medicare. Of those low-income seniors who make just enough to be ineligible for Medicaid but who lack access to employer-sponsored supplemental coverage, 54 percent of Latinos and 38 percent of African-Americans choose Medicare Advantage.

We are strong supporters of Medicare and have consistently fought for full financing. We reject the notion that additional benefits and options provided by Medicare Advantage should be scrapped so that the funds can be used elsewhere.

This is an immoral dichotomy; not only do we advocate for continued funding of Medicare, Medicare Savings Programs and Medicare Advantage, but we also advocate passionately for universal quality health care.

We will continue to support all programs that benefit our communities.

Hilary O. Shelton
Brent Wilkes
Washington, April 26, 2007
The writers are, respectively, director of the N.A.A.C.P. Washington bureau; and national executive director for the League of the United Latin American Citizens.

[anne]

When AARP is becoming a health care insurer and the NAACP and United Latin American Citizens are lobbying on behalf of the interests of private insurers who are unwilling to compete with and are being subsidized against Medicare, we have a public interest problem that is quite worrying.

[wjd123]

Anne,

Thanks for posting the letter from Shelton and Wilkens. It would seem to debunk Krugman's claim that African Americans and Latin Americans don't benefit disproportionately from Medicare Advantage Plans. The figures they gave for their participation are greater than their percentage of the population.

What seems to have happened is that both groups have been taken in by insurance industry disinformation, which falsely claims that minorities benefit disproportionately from this subsidy. It’s a claim that has been thoroughly debunked...— but apparently the truth isn’t getting through.--Krugman

The title of Krugman's column is "The Plot Against Medicare." His argument is that Republicans are using subsidies to Medicare Advantage plans as a way of making traditional Medicare uncompetitive. This in turn will lead to more privatization, which in the long run will hurt all Medicare recipients. I agree with Krugman on this point.

If this is the point of his "useful idiots" remark I understand his point. But why throw the claim about minorities not benefiting disproportionately from the subsidy into the argument when it appears form the statistics that Krugman's claim is untrue.

He still hasn't given a link to the study that "thououghly debunks" the argument that minorities don't benefit disproportionately.

[anne]

http://www.cbpp.org/4-3-07health.htm

April 3, 2007

Low-Income and Minority Beneficiaries Do Not Rely Disproportionately on Medicare Advantages Plans: Industry Campaign to Protect Billions in Overpayments Rests on Distortions
By Edwin Park and Robert Greenstein

Findings

Private "Medicare Advantage" health plans were brought into Medicare to reduce costs, but Medicare pays them 12 percent more than the cost of treating comparable beneficiaries through traditional Medicare, adding billions to Medicare's costs.

Private plans argue that curbing the overpayments would harm low-income and minority Medicare beneficiaries, who they claim rely disproportionately on Medicare Advantage for supplemental coverage. This claim, however, is based on misleading use of data.

Medicaid, not Medicare Advantage, is the main form of supplemental coverage for low-income and minority Medicare beneficiaries. The most cost-effective way to help these individuals would be to strengthen the programs within Medicaid on which many of them rely to supplement Medicare coverage and to pay the Medicare premiums for them.

Moreover, the overpayments are harming millions of minority beneficiaries by raising their monthly Medicare premiums. The overpayments also are weakening Medicare's finances and ballooning its costs, thereby building pressure for sizable Medicare cuts in the future.

Curbing overpayments to Medicare Advantage plans would benefit Medicare beneficiaries by reducing costs and premiums and improving Medicare's long-term fiscal sustainability....

[anne]

http://www.cbpp.org/4-3-07health.htm

April 3, 2007

Conclusion

Claims that low-income and minority Medicare beneficiaries rely heavily and disproportionately on private plans for supplemental coverage are not valid. Such claims rest on skewing the data by failing to count Medicaid or employer-based retiree coverage as supplemental coverage. Medicaid, not private plans, is the principal form of supplemental coverage for low-income and minority Medicare beneficiaries.

Nor does the claim that low-income and minority communities would be particularly hurt by reining in the Medicare overpayments stand up under scrutiny. Millions of minority beneficiaries who are not enrolled in the private plans are forced to pay higher Medicare premiums every month to subsidize the large overpayments the private plans receive. Curbing the overpayments would raise these people's disposable incomes. In addition, some of the savings from curbing the overpayments could be used to provide substantial, targeted help to low-income and minority individuals, both by strengthening the Medicare Savings Programs and by expanding health insurance coverage and reaching more uninsured children through SCHIP and Medicaid. Such a package of reforms financed by savings from curbing the overpayments would significantly benefit low-income and minority communities, not harm them.

[anne]

WJD, thank you, but in this case Hilary Shelton and Brent Wilkes are simply not representing the broad needs of African American and Latino Medicare recipients.

[anne]

http://www.nytimes.com/2007/04/21/opinion/21sat1.html?ex=1334808000&en=e9fa0ff2aaeacec6&ei=5090&partner=rssuserland&emc=rss

April 21, 2007

The Medicare Privatization Scam

If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?

About a fifth of elderly Americans now belong to private Medicare Advantage plans, which — thanks to government subsidies — often charge less or offer more than traditional Medicare. As Congress struggles to find savings that could offset the costs of other important health programs, it should take a long and hard look at those subsidies.

The authoritative Medicare Payment Advisory Commission estimates that the government pays private plans 12 percent more, on average, than the same services would cost in the traditional Medicare fee-for-service program. The private plans use some of this money to make themselves more attractive to beneficiaries — by reducing premiums or adding benefits not covered by basic Medicare — and siphon off the rest to add to profits and help cover the plans' high administrative costs....

[anne]

http://www.cbpp.org/4-20-07health.htm

April 20, 2007

Private Plan Overpayments Weaken Medicare's Financing and Hasten the Program's Insolvency
By Edwin Park and Robert Greenstein

Under the Medicare program, beneficiaries may elect coverage through private "Medicare Advantage" plans rather than through the traditional fee-for-service Medicare program. Although private plans were introduced into Medicare to spur competition and reduce program costs, both the Medicare Payment Advisory Commission (MedPAC) — Congress' expert advisory body on Medicare payments — and the Congressional Budget Office have determined that, on average, the federal government is paying the private plans 12 percent more than it costs to treat comparable beneficiaries through traditional Medicare.

MedPAC has called on Congress to rein in these excessive payments to private plans and has recommended specific reforms. CBO estimates that the largest of these reforms — MedPAC's proposal to "level the playing field" so private plans essentially are paid the same amounts that it would cost to treat the same patients under regular Medicare — would alone save $54 billion over five years and $149.1 billion over ten years....

[anne]

Paul Krugman always sets down sources for his columns within a day of the writing, a remarkably valuable resource and rather unique for columnists. However, Krugman is relentlessly bullied which is certainly becuase he is so methodical and incisive and precise in writing as to constantly worry those who would have it otherwise.

No matter the typical and expected complaints of Hilary Shelton and Brent Wilkes, Krugman is right about the "disadvantage to Medicare recipients, minority or otherwise, of subsidies to private insurers. But, the complaints show the difficulty in generating rational health care policy.

[anne]

http://www.cbpp.org/4-3-07health.htm

April 12, 2007

Low-Income and Minority Beneficiaries Do Not Rely Disproportionately on Medicare Advantages Plans: Industry Campaign to Protect Billions in Overpayments Rests on Distortions
By Edwin Park and Robert Greenstein

[Please read this extended documented study digest carefully, if you have the slightest doubt as to the validity and importance of Paul Krugman's column for all Medicare recipients, and especially for low-income recipients, and assuredly for African American and Latino recipients.]

[anne]

http://www.nytimes.com/2007/05/07/washington/07medicare.html

May 7, 2007

Hard Sell Cited as Insurers Push Plans to Elderly
By ROBERT PEAR

WASHINGTON — Insurance companies have used improper hard-sell tactics to persuade Medicare recipients to sign up for private health plans that cost the government far more than the traditional Medicare program, federal and state officials and consumer advocates say.

Insurance agents, spurred in some cases by incentives like trips to Las Vegas, have aggressively marketed the private plans, known as Medicare Advantage plans. Enrollment in them has skyrocketed in the last year, and Medicare officials foresee continued rapid growth in the next decade.

In Mississippi, George R. Dale, the state insurance commissioner, said, "Abusive Medicare insurance sales practices are spreading rapidly throughout the state." State Senator Terry C. Burton, a Republican, said, "My office is receiving calls daily from seniors who have been victims of unscrupulous salespeople."

Proponents of private plans say they are indisputably good for many older Americans because they coordinate care and may offer extra benefits, like discounts on eyeglasses, hearing aids and dental care.

But federal officials said that the fastest-growing type of Medicare Advantage plan generally does not coordinate care, does not save money for Medicare and has been at the center of marketing abuses.

These "private fee-for-service plans" allow patients to go to any doctor or hospital that will provide care on terms set by the insurer. In most cases, no one manages the care. And some patients have found that they have less access to care, because their doctors refuse to take patients in private fee-for-service plans.

Moreover, those plans may be more expensive than traditional Medicare for some patients, because the co-payments for some services may be higher. The Medicare Payment Advisory Commission says that the cost to the government is also higher because it pays the private fee-for-service plans, on average, 19 percent more than the cost of traditional Medicare.

Richard S. Foster, chief actuary for the Medicare program, said "the additional payments to Medicare Advantage plans, above and beyond the costs" of traditional Medicare, were causing higher premiums for all beneficiaries and speeding the depletion of the Hospital Insurance Trust Fund for Medicare.

Almost one-fifth of the 43 million Medicare beneficiaries are now in some type of private plan.

Much of the growth in private fee-for-service plans has come in rural areas, where doctors and hospitals are often in short supply.

In Georgia, two insurance agents were arrested last month and accused of conspiring to defraud Medicare beneficiaries.

"The agents signed up unwilling consumers and even deceased individuals for private Medicare plans," said John W. Oxendine, the Georgia insurance commissioner. "This appears to be a national problem, based on my conversations with insurance officials around the country."

In an interview, Bobbie S. Whatley of Columbus, Ga., a 69-year-old nurse practitioner, said that a young man wearing a blue denim shirt with a WellCare logo showed up on her doorstep in November and talked to her about her insurance.

Mrs. Whatley did not sign up, she said, but he "forged my signature," and a month later she received mail thanking her for joining one of WellCare's private fee-for-service plans.

"It turned into a nightmare," she said. "I spent two months trying to cancel my enrollment. I have all my mental faculties. If I let somebody like this come into my home and take advantage of me, then I am really concerned about older people who are more debilitated and not able to take care of themselves."

John N. Aberg, a spokesman for WellCare, said the company had terminated contracts with 10 independent sales agents who had engaged in door-to-door solicitation and other prohibited marketing practices in Georgia and several other states.

"We have zero tolerance for any behavior that violates marketing guidelines," Mr. Aberg said.

The Louisiana insurance commissioner, James J. Donelon, said some agents were using "overly aggressive sales tactics," including false promises, "to market Medicare-related products with little or no concern for the needs of the consumer."

James E. Long, the insurance commissioner in North Carolina, is investigating complaints that insurance agents switched residents of an assisted living community from traditional Medicare into private plans without their permission. Officials in Kansas, Oklahoma and Wisconsin said they were investigating similar complaints....

[anne]

We have a plot against Medicare, and a plot against older Americans, and save for a Paul Krugman astonishingly little understanding of what is happening broadly and less concerted action to undo the plot.

[anne]

Notice always that Paul Krugman is able to show a severe problem, and in the showing draw immediate complaints only to be able to show the complaints unjustified even as the problem presented though grows worse for the masking by critics.

So that we understand the tragedy that we have encompassed in policy. Not only are Republicans intent on doing harm to Medicare and Medicaid, the $564 billion already budgetted directly for the insanity of Iraq makes a mockery of the $54 billion we could save ojn Medicare over the coming 5 years by ending the absurd harmful subsidies to private Medicare insurers.

[anne]

Then we are paying private insurance companies $54 billion in subsidies to harm Medicare recipients, especially lower income or minority recipients, while recruiting low income and minority recipients and supposed representatives for the same harmful subsidies.

Where are the many echoes of concern, and the intent to protect Medicare?

[longnow]

WOW!!! Shelton and Wilkes are deliberately misrepresenting the facts and selling us all out.

"Killing the beast" is the term Republicans use for gutting government programs (except the DoD) and replacing them with hydras that are more wasteful, corrupt, and harder to kill. The war in Iraq has the same purpose in diverting more and more funds away from the economy and into the MIC and private contractors. The only "Second Opinion" I need now is the book.

[anne]

[Explaining this latest complaint with which I agree; the full letter is above.]

http://www.nytimes.com/2007/05/01/opinion/l01krugman.html

Medicare Advantage

To the Editor:

We take offense at Paul Krugman’s column, “The Plot Against Medicare.” Not only was the column insulting, but it also ignored our goals to ensure adequate, affordable health care for the communities we represent.

Hilary O. Shelton
Brent Wilkes
Washington, April 26, 2007
The writers are, respectively, director of the N.A.A.C.P. Washington bureau; and national executive director for the League of the United Latin American Citizens.

[Wilma Janszen]

Thanks for the info