The Agenda: Entitlements. The financing systems for Social Security and Medicare/Medicaid have been crumbling for some time. Exhaustion of the funding sources looms. What to do? For the Democrats, the standard answer has been “Make the rich pay their ‘fair share,’[1] then spend the money like a drunken sailor.” For Republicans, the standard answer is “Dump the dependency-fostering bureaucratized systems in favor of sensible market-based solutions; you know, like Boeing and Wells Fargo.”
The Republican favorite, “Medicare Advantage” plans, are private health insurance plans that can be chosen by customers as an alternative to regular Medicare. “Advantage plans” cover hospitalization and surgery, visits to doctor, prescription drugs, and vision, dental and hearing care. They also limit out-of-pocket spending.[2]
How do they do this? They strive to be more efficient and cost-saving than regular Medicare. For one thing, members are offered a more limited pool of network doctors to consult. No insisting on the doctor whose manner or reputation you prefer.[3] For another thing, they require prior authorization by the company for many treatments and services. Insurance companies often refuse authorization for things that they regard as CYA or treatment-padding.[4] Beyond these “sensible, market-based solution,” the plans are also accused of “up-coding” procedures. That is, they turn whatever was done into something higher on the scale, the bill the government for the more costly thing. Then there is the complaint that they deny services recommended for patients by doctors. On the one hand, they increase the money paid by the government; on the other hand, they dodge around providing costly procedures.
Then there is the touchy question of end-of-life spending. Seventy percent of Americans die from a one or more chronic diseases. The last few years of life often involve treatments for those chronic diseases. This makes chronic diseases “the leading drivers of health care costs.”[5] Almost 950,000 Americans die of heart disease or stroke every year; and more than 600,000 die from cancer. Shedding end-of-life patients by denying them desired coverage could be good for the bottom line of Advantage Plans by pushing them to shift to Medicare.
The new administration may actually try to carry out a sweeping overhaul of entitlements. They’re going to start with Medicare. President-Elect Donald Trump has nominated Dr. Mehmet Oz to head the Center for Medicare and Medicaid Services (CMS). Oz has a track-record of having supported the expansion of “Medicare Advantage” plans. He also “criticized the drug industry over high prices” during his 2022 Senate campaign. Will the new administration sustain, and build on, the Biden administrations negotiation of drug prices?
Leaving things just the way they are doesn’t seem like a good choice.
[1] “Fair share” is never defined beyond my beloved sister-in-law’s “More, we’ll tell you when to stop.” Honest.
[2] “Dr. Oz: Expanding Medicare’s private option,” The Week, 6 December 2024, p. 33.
[3] This is a big issue for many people, but if you get hurt in a car wreck or have a heart attack, you go to the nearest ER. Nobody says “I want to see MY doctor and I’ll wait until they’re available—don’t slip on the blood pooling on the floor.” Why should it be different with an annual visit?
[4] See, for example, Nicholas Bakalar, “Overtreatment is Common, Doctors Say,” NYT, 6 September 2017; Ryan Levi and Dan Gorenstein, “When routine medical tests trigger a cascade of costly, unnecessary care,” NPR, 14 June 2022, When routine medical tests trigger a cascade of unnecessary care : Shots – Health News : NPR
[5] Fast Facts: Health and Economic Costs of Chronic Conditions | Chronic Disease | CDC
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