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July 12, 2008

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Medicare Advantage is the classic exemplar of a Republican health insruance plan: large private companies loot the government; health ccare declines.

Holy crap! I just heard that Tony Snow died.

Oh God, that's awful. Thanks for telling us.

So. A government subsidy is termed "competition" by conservatives. They should all hang their heads in shame.

But if the government didn't pay the private insurers 13% more, where are they going to get their 13% margins?

So. A government subsidy is termed "competition" by conservatives. They should all hang their heads in shame.

First you're going to have to find conservatives who can feel shame. Good luck with that.

Some things people may not be aware of.

The medicare reimbursement rate for physician services has actually gone down for most services each of the last three years. This would have been the most severe cut.

Note that this is during a time of increased healthcare costs over all.

Secondly, most insurance reimbursement to doctors that are in the various insurance networks is tied very closely to medicare reimbursement. Most network contracts have a doctor being reimbursed a set percentage of medicare, such as 105% to 150%. I have seen some cases where it was higher than the latter but it is rare.

Insurance companies were hoping that the rate cut would go into effect as it would lower the amount of money they would be paying doctors. I question, however, if it would have resulted in lower premiums.

While I'm pretty sure it's true that most plans are getting overpaid (a number of our clients report that what used to be a basically revenue-neutral program has in the last few years become a profit center), the numbers from the MedPAC report are a bit misleading -- they can't really do an apples-to-apples comparison of care per $$, because the government pays plans on a risk basis (for the most part) rather than a per-service basis and plans don't report encounter data. So while it's true that the per capita cost is higher in MA than traditional Medicare, you can't be sure that the amount of care is roughly the same -- perhaps the average bene who signs up for MA consumes more care than the average bene who sticks with trad. Also there are wide regional differences -- the report separates out the Puerto Rico numbers (as it should), but otherwise it lumps all the numbers together, which doesn't give a very good picture of the situation.

But the private FFS plans really do need to be limited or eliminated IMO -- I guess their purpose is to provide coverage in sparsely populated areas, but they're a pretty bad deal otherwise AFAICT.

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