Choice versus Rationing in Medicare
Writing in the New Republic, former Obama Administration official Neera Tanden argues that House Republicans have engaged in hypocrisy by passing their budget, because its plan for premium support within Medicare would result in the same kind of rationing Republicans criticized in the health care law. This criticism – accompanied by traditional liberal rhetoric about Republicans wanting to put insurance companies in charge – widely misses the mark, for one simple reason: The House Republican plan preserves (and arguably enhances) seniors’ choice of plans, while Democrats’ health care law will restrict it.
The issue is clear: If a senior is concerned about his or her health plan “rationing” care, will that beneficiary have other options from which to choose? Under the House Republican plan, seniors will be able to use their premium support payment to choose from among a wide variety of insurance plans (all subject to federal standards). The Medicare Part D program, which shares some characteristics with the premium support model in the Ryan plan, provides literally thousands of choices for seniors – in 2011, more than 2,500 stand-alone prescription drug plans (PDPs) or Medicare Advantage plans offering prescription drug coverage (MA-PD). According to the Medicare Payment Advisory Commission, “Medicare beneficiaries continue to have 28 to 38 PDP options, along with many (sometimes dozens) [of] MA-PD plans.”
Conversely, if seniors are dissatisfied with the unsustainable payment reductions imposed by bureaucrats on the Independent Payment Advisory Board (IPAB) under the health care law, will they be able to choose another option? The answer may be no. The Medicare actuary predicts Medicare Advantage enrollment will be cut in half by 2017, meaning seniors in some areas may not have access to a Medicare Advantage plan. Moreover, the IPAB payment reductions called for in the law – and increased under the President’s deficit proposals – may cut Medicare Advantage plans even further. For both reasons, seniors may end up with no choice but to enroll in government-run Medicare – thus subjecting themselves to IPAB and the decisions it may take to restrict access to treatments.
Democrats, scare tactics notwithstanding, have the argument entirely backwards. If a senior is dissatisfied with his or her plan under Part D now and premium support in the future, that beneficiary will have plenty of options to change it. Under Democrats’ health law, however, few other choices stand between seniors and the arbitrary decisions of the unelected bureaucrats on the IPAB.