No doubt a drop in spending per beneficiary is good news for future budget projections. However, it seems to me that total Medicare spending is more important. What is that trend? I’d be in favor of some sort of voucher system whereby Medicare beneficiaries are given $ to buy a health insurance policy AND invest in an HSA to cover non-covered services. Medicare would act as the stop gap, however. Example: Medicare would pay expenses above a certain annual amount of out-of-pocket expenses, say $50,000 but this would be based on a person’s available assets which they would have to divulge in order to have Medicare help.
Why is total spending more important, Greg? If we're going to provide health care, isn't it most important to do so most efficiently as possible? I don't agree that vouchers and HSAs would be better. Medicare already is far too complex as it is, and HSAs mostly benefit high income households. See: https://www.morningstar.com/alternative-investments/hsas-may-be-best-used-tax-shelters
Why is total spending more important? Because that tells us the current total impact of Medicare spending on the federal budget. If per capita spending is dropping, but total spending is increasing, how does that help the federal budget? To expect more efficiency from any federal program is a wild dream. As you wrote, Medicare is far too complex now. I worked on the front lines of an outpatient clinic for 40 years and was a supervisor for much of that time. I saw how the medical center finance people had to play a shell game with pricing to make up for the difference in allowed payments from Medicare vs. private insurance. I believe the entire Medicare program needs a complete overhaul. I suggest separating the Medicare program as far away as possible from Washington, DC. Bureaucrats in DC should not be making health care coverage decisions. Perhaps it would work better if managed by the states. I will work on my voucher system and get back to you.
Medicare (and Social Security) are both, in fact, more efficient than their private sector counterparts if you look at the expense of providing the service. Good luck with your voucher program - just be sure to figure out a way to design the HSA component in a way that makes them valuable to people who aren't wealthy (that's actually impossible). Also make sure to design it so that seniors can shop it simply and efficiently, not like the current Part D and Medicare Advantage marketplaces (unlikely(.
I appreciate your work on this topic. Indeed, it is all too complex for the average Joe and Josephina. I think that is by design to keep most beneficiaries in the dark, to maintain and grow a huge bureaucracy and private market for seniors, AND to just delay the inevitable failure of any socialistic system.
I just finished my first year of retirement. I found the cross-over from employer sponsored insurance to Medicare to be quite challenging. I tried Medicare Advantage, but decided to switch to Medicare with a supplement last February, because the Medicare Advantage (MA) plan we chose couldn't settle on a contract with the clinic we have used for 40 years. Also, being in the rehab field, I never liked that most MA plans had high co-pays per visit for PT, OT, ST, cardiac and pulmonary rehab. My experience (and my daughter's, who works at a PT clinic) is that many patients referred for rehab either don't participate or limit their recommended therapy because of $30-50 co-pays per visit. Recently, I had a discussion about this with Senator Murray's office. I am a hoping to get somebody in Congress to listen to my plea to put a cap on per visit co-pays for the various rehab services (my goal would be $10 per visit).
Regarding HSA's: I wish I could have started one earlier in my career. The one offered through my employer was very helpful for our family over the past 10 years. During that time, our annual income was $65-85,000, so I would not classify that as wealthy with 5 kids at home. We were still able to tuck away a little bit with each paycheck.
What do you think of proposed new legislation from Congressman Greg Steube and Congresswoman Kat Cammack of Florida to offer HSAs to lower-income families, which they could use to purchase medical items and personalized services directly – even if they’re not covered by insurance?
Dean Clancy of Americans for Prosperity writes: "....it’s not just lower-income Americans who would benefit, because the HSA option will increase competition throughout the healthcare system, costs will be lower for everyone. Taxpayers would benefit, too. The bill would also make existing health subsidies more efficient, saving taxpayers an estimated $30 billion over ten years."
Perhaps the HSA idea needs to be disconnected from taxes. Maybe HSAs could be offered by banks and provide high interest rates. Re: "so that seniors can shop it simply and efficiently," I agree that should be the over-arching goal. I'll keep thinking about a voucher system.
Thanks again for writing about this important topic!
Thanks for the note, Greg - on your question, did you review the article link I sent earlier on HSAs? It reviews research demonstrating my point that the benefits flow to the upper income bands, as a rule. I can resend if you like, but see above. Regarding Americans for Prosperity, we've been running the experiment with market-driven healthcare for many years in the Medicare system, and it hasn't demonstrated the ability to bring down costs through competition. So, I'm not impressed by those arguments.
No doubt a drop in spending per beneficiary is good news for future budget projections. However, it seems to me that total Medicare spending is more important. What is that trend? I’d be in favor of some sort of voucher system whereby Medicare beneficiaries are given $ to buy a health insurance policy AND invest in an HSA to cover non-covered services. Medicare would act as the stop gap, however. Example: Medicare would pay expenses above a certain annual amount of out-of-pocket expenses, say $50,000 but this would be based on a person’s available assets which they would have to divulge in order to have Medicare help.
Why is total spending more important, Greg? If we're going to provide health care, isn't it most important to do so most efficiently as possible? I don't agree that vouchers and HSAs would be better. Medicare already is far too complex as it is, and HSAs mostly benefit high income households. See: https://www.morningstar.com/alternative-investments/hsas-may-be-best-used-tax-shelters
Why is total spending more important? Because that tells us the current total impact of Medicare spending on the federal budget. If per capita spending is dropping, but total spending is increasing, how does that help the federal budget? To expect more efficiency from any federal program is a wild dream. As you wrote, Medicare is far too complex now. I worked on the front lines of an outpatient clinic for 40 years and was a supervisor for much of that time. I saw how the medical center finance people had to play a shell game with pricing to make up for the difference in allowed payments from Medicare vs. private insurance. I believe the entire Medicare program needs a complete overhaul. I suggest separating the Medicare program as far away as possible from Washington, DC. Bureaucrats in DC should not be making health care coverage decisions. Perhaps it would work better if managed by the states. I will work on my voucher system and get back to you.
Medicare (and Social Security) are both, in fact, more efficient than their private sector counterparts if you look at the expense of providing the service. Good luck with your voucher program - just be sure to figure out a way to design the HSA component in a way that makes them valuable to people who aren't wealthy (that's actually impossible). Also make sure to design it so that seniors can shop it simply and efficiently, not like the current Part D and Medicare Advantage marketplaces (unlikely(.
I appreciate your work on this topic. Indeed, it is all too complex for the average Joe and Josephina. I think that is by design to keep most beneficiaries in the dark, to maintain and grow a huge bureaucracy and private market for seniors, AND to just delay the inevitable failure of any socialistic system.
I just finished my first year of retirement. I found the cross-over from employer sponsored insurance to Medicare to be quite challenging. I tried Medicare Advantage, but decided to switch to Medicare with a supplement last February, because the Medicare Advantage (MA) plan we chose couldn't settle on a contract with the clinic we have used for 40 years. Also, being in the rehab field, I never liked that most MA plans had high co-pays per visit for PT, OT, ST, cardiac and pulmonary rehab. My experience (and my daughter's, who works at a PT clinic) is that many patients referred for rehab either don't participate or limit their recommended therapy because of $30-50 co-pays per visit. Recently, I had a discussion about this with Senator Murray's office. I am a hoping to get somebody in Congress to listen to my plea to put a cap on per visit co-pays for the various rehab services (my goal would be $10 per visit).
Regarding HSA's: I wish I could have started one earlier in my career. The one offered through my employer was very helpful for our family over the past 10 years. During that time, our annual income was $65-85,000, so I would not classify that as wealthy with 5 kids at home. We were still able to tuck away a little bit with each paycheck.
What do you think of proposed new legislation from Congressman Greg Steube and Congresswoman Kat Cammack of Florida to offer HSAs to lower-income families, which they could use to purchase medical items and personalized services directly – even if they’re not covered by insurance?
Dean Clancy of Americans for Prosperity writes: "....it’s not just lower-income Americans who would benefit, because the HSA option will increase competition throughout the healthcare system, costs will be lower for everyone. Taxpayers would benefit, too. The bill would also make existing health subsidies more efficient, saving taxpayers an estimated $30 billion over ten years."
Perhaps the HSA idea needs to be disconnected from taxes. Maybe HSAs could be offered by banks and provide high interest rates. Re: "so that seniors can shop it simply and efficiently," I agree that should be the over-arching goal. I'll keep thinking about a voucher system.
Thanks again for writing about this important topic!
Thanks for the note, Greg - on your question, did you review the article link I sent earlier on HSAs? It reviews research demonstrating my point that the benefits flow to the upper income bands, as a rule. I can resend if you like, but see above. Regarding Americans for Prosperity, we've been running the experiment with market-driven healthcare for many years in the Medicare system, and it hasn't demonstrated the ability to bring down costs through competition. So, I'm not impressed by those arguments.