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View Diary: "Medicare Buy In" is a Winner (13 comments)

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  •  Suggestion - minor conflict in 2 parts (3+ / 0-)
    Recommended by:
    wader, lcrp, maybeeso in michigan

    of your diary at first reading.

    Near the end -

    It may also be possible to raise the amounts paid by Medicare to providers and STILL have a much more cost effective health care system.

    First and foremost, Medicare is already receiving forward funding from everyone working - it comes from employee and employer HI contributions seen as payroll deductions. Of course, any improvement in payouts to doctors and institutions would also surely raise the effective rates for Par "A" and "B" and drug coverages which are earlier used by you in the middle section cost modeling arguments, like this ...

    We can see that the hospitalization part of the total cost really climes into the stratosphere as we get really old.  But taking all these numbers one on one we can then fit a curve to these numbers and project the costs for the younger people.  I say "we" but I mean someone other than ME because I am mathematically illiterate.  I can average the numbers and say that in 1994 it cost $329.50 per month for each of the participants in the pool in 1994 (no drug benefits).

    We can project a drug benefit back to 1994 in proportion to the other cost differences.  If the cost of "A" plus "B" was 329.50 in 1994 and that cost is $861 today then 861 is to 329.50 as 150 is to X.
    X = 57.4 per month (or 688 per year).  We add that to the average monthly cost of 329.5 and get $387 as the inferred AVERAGE cost of Medicare with drug benefits in 1994.  

    The conflict in logical flow is almost a case of have our cake and eat it too ...

    Now, here is how I think the conflict implied might be resolved. The later conclusion - raise the rates paid by Medicare, (honorable aim in my view - as more providers helps the system) is supportable if we accept that the rates paid by our new entrants are not going to be so clearly calculable by reverse age rated extrapolation from existing part "A" and "B" coverages.

    I'm absolutely certain that your core point will remain sound, that opening up a Medicare buy-in is a winning plan, resulting in overall lower rates than PI. But, I think it will require a cost model in which the burden of system support for needed care is shared in a manner that has less focus on age rating, more focus on establishing a simplified flat premium plan.

    I hope the above is something you can follow - perhaps it is an idea that merits totally separate discussion - meanwhile, thanks for diary.

    •  You can't get there all at once (2+ / 0-)

      You MAY get there if and when people are mature enough to think on a whole life basis as opposed to the shorter horizon.  The interim step of age based BUY IN is a necessary political exercise because the evidence for cost control is so overwhelming.  The first bridge was the ACA that moves the cost of caring for the working poor off of the middle class insurance premium payers and onto the wealthy by way of increased Medicare taxes on the wealthy to subsidize the low income people.  This is what the repeal of ACA is all about.  It is the Republicans objecting to the progressive shift.  Much more time needs to be spent on driving this point about middle class relief home.  The same tax and subsidize system that is ACA applies to early retirees as well as to the working poor.  ACA will reduce the cost of health insurance and thus the cost of health care for the older (but not yet 65) retired people.  A flattening of the Medicare tax is not advisable nor politically or economically very smart IMHO.  I may be missing something in all of this (probably a lot).  But I have been looking at the way Medicare adjusts what it pays based on local cost of living.  That is a very appropriate thing to do.

      I first selected Independence Missouri as one of my example insurance places.  The premiums for insurance in Independence Missouri are lower than the projected Medicare costs.  But I can buy a nice home there for $25k.  The schools of Kansas City (Independence is s burb) lost accreditation and the place is not good for the young.  But coots can do very well there.  If I wasn't already 66 and getting my health care at the VA I'd think about relocating.  One size fits all sounds nice and simple. And it may actually work in very small nations.  But it is not real smart to try to do it here.  The differences you see in the price for insurance from place to place are more indicative of REALITY.

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