In Part 1 of his 3-part ‘Real News’ interview, Gerald Friedman, a professor of economics at the University of Massachusetts in Amherst, explains how a single-payer plan in Maryland would cover everyone, improve outcomes and make business more competitive:
from the transcript:
PAUL JAY: So before we dig into some of your research, just sort of give us the bigger picture of why this would make sense for Maryland.
GERALD FRIEDMAN: Well, the big picture is that health insurance provided by competing private companies is inherently inefficient and destructive of people’s health. I mean, that’s a strong statement, but I think it is well founded.
The problem with private health insurance is that it’s not like selling shoes. If you’re a shoe company, you want to sell more shoes, you want to make a better quality shoe at a better price to attract more business. Health insurers don’t want more business. They want to get rid of sick people. Eighty percent of your costs as a health insurer are incurred for about 20 percent of your people. You know, in some places it’s 90-10—90 percent of your costs go to 10 percent of the people. If you can find those people, identify those people, and figure out a way to get them to go away, go to a different company, then you will be in a position to lower your prices and increase your profits. That is what health insurers try to do.
In Part 2, Gerald Friedman explains how a single-payer plan in Maryland would cover everyone, improve outcomes and make business more competitive:
from the transcript:
PAUL JAY: So let’s dig in into your study and what you found. So you have a section on savings, and point one is administrative costs. So explain what you found there.
GERALD FRIEDMAN: Okay. Well, first of all, there are the administrative costs of the health insurers themselves, who devote a great deal of energy and resources to, first, screening people and supervising what doctors do in order to drive away people who will need extensive care.
The average health insurer in Maryland has what they call a medical loss ratio of 85 percent. Now, the medical loss ratio is the proportion of health insurance premiums that are actually paid out to provide the health care. In Medicare, the medical loss ratio is 98 percent.
Wall Street doesn’t like high medical loss ratios. To them, to Wall Street, a high medical loss ratio means that you have too many sick people, you’re not running enough profit. They like the medical loss ratios to be low. We, the consumers of health care, normal people, we like a high medical loss ratio. We want the money we put into the insurance plan to be paid out in benefits.
And in Part 3, Gerald Friedman details how to pay for single payer health insurance:
from the transcript:
PAUL JAY: Alright. So in the last segment, we went through your report and we looked at the savings, which came to just over 24 percent over existing insurance coverage and health care expenditure. But that doesn’t cover everything, does it? And then so what isn’t paid for out of these cost savings, and how are you going to pay for it?
GERALD FRIEDMAN: Okay. Well, first of all, the cost savings are there. There are also extra expenses, as we were saying, with the Medicaid rate fix. Also, we would be covering everybody. Now 15 percent of the population of Maryland is currently without health insurance. Extend health insurance to them, they’re extra expenses. Also, the plan for the Maryland Health Security Act does away with copayments, deductibles, and all of those expenses. We expect that people would use health services more.
See Sue Run (or deficit polling and taxing workers to fund programs for people who could get by without help) [New]
The National Journal polled Americans on questions surrounding the federal budget deficit (linked from Jon Walker). Did Americans blame the safety-net programs for the deficit in the federal budget?
As important, the survey found Americans unconvinced that safety-net programs represent a major source of the deficit problem. When asked to identify the biggest reason the federal government faces large deficits for the coming years, just 3 percent of those surveyed said it was because of “too much government spending on programs for the elderly”; only 14 percent said the principal reason was “too much government spending on programs for poor people.” Those explanations were dwarfed by the 24 percent who attributed the deficits primarily to excessive defense spending, and the 46 percent plurality who said their principal cause was that “wealthy Americans don’t pay enough in taxes.” While minorities were more likely than whites to pin the blame on the wealthy avoiding taxes, even 43 percent of whites agreed.
Given that diagnosis, it is perhaps not surprising that relatively few respondents said they would support major reductions in safety-net programs to reduce the deficit. Fully three-fourths of those polled said Social Security should be cut “not at all” to reduce the deficit, and exactly four-fifths said the same about Medicare. Nearly two-thirds even agreed that Medicaid should be entirely spared from cuts; just 5 percent said it should be cut a lot. There was more receptivity to retrenching food stamps and housing vouchers for the poor (only 51 percent said they should be entirely spared), but even so, just 9 percent said they should be cut “a lot.” Twice as many said defense should face big cuts.
And the accompanying graphic:
The 53% who think “the government taxes workers too much to fund programs for people who could get by without help” left me wondering who exactly are those “people who could get by without help.” Because Wall Street, Big Oil, Big Banks and so on certainly don’t need any government help. Another portion will define “people who could get by without help” as those that receive help from safety net programs. Probably many of those exclude themselves from those who get government help that they don’t need. B. Deutsch at ‘Alas! a Blog’ (linked by Meteor Blades), used data from Suzanne Mettler’s “Reconstituting the Submerged State: The Challenge of Social Policy Reform in the Obama Era” that was published in Perspectives on Politics on September 2010 (pdf) and built a revealing table showing how little many people know about the government programs that they receive a boost from:
Percentage of Program Beneficiaries Who Report They “Have Not Used a Government Social Program” Program “No, Have Not Used a Government Social Program” 529 or Coverdell 64.3 Home Mortgage Interest Deduction 60.0 Hope or Lifetime Learning Tax Credit 59.6 Student Loans 53.3 Child and Dependent Care Tax Credit 51.7 Earned Income Tax Credit 47.1 Social Security—Retirement & Survivors 44.1 Pell Grants 43.1 Unemployment Insurance 43.0 Veterans Benefits (other than G.I. Bill) 41.7 G.I. Bill 40.3 Medicare 39.8 Head Start 37.2 Social Security Disability 28.7 Supplemental Security Income 28.2 Medicaid 27.8 Welfare/Public Assistance 27.4 Government Subsidized Housing 27.4 Food Stamps 25.4
Deutch based a cartoon on the data he gathered:
What the heck is that?
Paul Ryan’s (R-WI) Medicare privatization proposal won’t hurt only future retirees but current ones too [New]
To make his Republican budget more politically palatable, Paul Ryan decided to go with an age-based “divide and conquer” strategy. He promised to keep Medicare intact for those currently on it and those above 55, and will only turn it into a privatized voucher program for those under 55.
The Third Way, with whom I rarely agree, does makes the interesting point that, in reality, Ryan’s plan doesn’t actually protect current seniors Medicare. With no new people joining traditional Medicare, its pool would steadily shrink, making doctors less willing to accept it.
The traditional Medicare plan, which covers three-fourths of today’s beneficiaries, relies on its huge size to keep costs down. Doctors and hospitals are not required to participate in it, but they have little choice if they wish to treat any seniors, who are the nation’s biggest health care consumers.
Fewer doctors would participate in the traditional Medicare plan if there were an alternative. The traditional plan pays physicians about 20% less than private health insurance plans. Today, that is essentially a discount for the large volume of Medicare patients. Under the Ryan budget, it would become a reason for doctors to leave the traditional plan.
Despite the promise that people on Medicare will have their current insurance protected under Ryan’s plan, as they got older, the quality of Medicare’s coverage would actually get much worse.
Another day, another political email, this one from the Progressive Campaign Committee:
The White House announced that in a big speech tomorrow, President Obama will do what no Republican President has been able to do: Put Medicare and Medicaid on the table for potential cuts.
Many former Obama volunteers, donors, and voters are deeply disappointed. A Democratic Congressman said on MSNBC last night that Obama needs to “act like a Democrat.”
and this bit:
Below are some amazing notes from Obama volunteers who worked passionately for the President in 2008.
Many people still want to believe in President Obama. But the White House needs to understand that their actions now will have real consequences for 2012. The level of grassroots enthusiasm will be determined by whether the President fights for bold progressive change — and takes cuts that hurt grandparents, the disabled, and kids firmly off the table.
NOTES FROM ACROSS THE NATION:
Susan Carpenter, Obama volunteer from Ohio:
“Like many volunteers on his campaign, I was in love with the idea of Obama. I haven’t given up on him quite yet, but I’m mustering the energy to work on the resistance. He needs to know who we are.”
John Rotolo, Obama volunteer from Florida:
“I’m almost too heartsick to comment…I’m at a loss.”
Barbara Louise Jean, Obama volunteer from Nevada:
“It’s ludicrous to cut Medicare for seniors when Wall Street created this mess without being held accountable. At 69, I’ll be in financial trouble if Medicare benefits are lowered.”
Joelle Barnes, Obama volunteer from Pennsylvania:
“This is like a knife through my heart! This is a Republican thing!”
Suzanne Fair, Obama volunteer from Maryland:
“I know he has to compromise sometimes, but it seems that he is caving to the Republicans far too often. We elected him for real change and I would like to see him stand strong against the corporate rich.”
Margaret Copi, Obama donor from California:
“I contributed more to Obama’s campaign than I have to anything else in my life, but no more dollars from me and definitely not a moment of volunteer time, unless he makes huge shifts and starts to fight for the peoples’ interest.”
What struck me were the putative voices of Obama supporters, not the Obamabots but real people who supported Obama thinking he would challenge the status quo to some degree. Not cut Medicare and all the other Republican policies he has pushed.
[BTW, I do think Obama "joining the deficit debate" is the endgame Pete Peterson and his kind have been building for and dreaming of for decades. We're about to see the deficit become an official fetish with the ability of the government to create jobs abandoned, much needed social programs cut then gutted. The media is practically salivating all over themselves this week on this issue. You'd almost think the American public backed deficit reduction over creating jobs, punishing Wall Street, and making corporate deadbeats pay their fair share of taxes.]
Paul Ryan (R-WI) Proposes Medicare Plan Under Which Seniors Would Pay Most of Their Income for Health Care [New]
That is what headlines would look like if the United States had an independent press. After all, this is one of the main take aways of the Congressional Budget Office’s (CBO) analysis of the plan proposed by Representative Paul Ryan, the Republican chairman of the House Budget Committee. Representative Ryan would replace the current Medicare program with a voucher for people who turn age 65 in 2022 and later. This voucher would be worth $8,000 in for someone turning age 65 in that year. It would rise in step with with the consumer price index and also as people age. (Health care expenses are higher for people age 75 than age 65.)
According to the CBO analysis the benefit would cover 32 percent of the cost of a health insurance package equivalent to the current Medicare benefit (Figure 1). This means that the beneficiary would pay 68 percent of the cost of this package. Using the CBO assumption of 2.5 percent annual inflation, the voucher would have grown to $9,750 by 2030. This means that a Medicare type plan for someone age 65 would be $30,460 under Representative Ryan’s plan, leaving seniors with a bill of $20,700. (This does not count various out of pocket medical expenditures not covered by Medicare.)
According to the Social Security trustees, the benefit for a medium wage earner who first starts collecting benefits at age 65 in 2030 would be $32,200. (This adjusts the benefit projected by the Social Security trustees [$19,652 in 2010 dollars] for the 2.5 percent annual inflation rate assumed by CBO.) For close to 70 percent of seniors, Social Security is more than half of their retirement income. Most seniors will get a benefit that is less than the medium earners benefit described here since their average earnings are less than that of a medium earner and they start collecting Social Security benefits before age 65.
So, a 65 year old person in 2030 would get a $32,200 benefit from Social Security, and would have to write a check for $20,700 to the private health insurance industry. That is the definition of a death panel!
Dean Baker continues:
Read the rest of this entry »