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Originally Posted by spence
Interesting enough though, the most recent experiment along these lines (Medicare Advantage) is reported to have a higher government cost.
-spence
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It has a higher government cost partly due to its disbursments being tied into traditional medicare's administrative payment system. Ryan's plan presumably corrects that. Medicare Advantage also is more expensive because it provides a broader range of benefits than fee for service and enrollees receive higher quality care than those in traditional Medicare. In fact, the majority of Medical Advantage plan bids to provide standard Medicare benefits come in at or below government's benchmark.
The Ryan plan for competition through bidding sets the benchmark at the second lowest bid or current medicare cost, whichever is lower. If the beneficiary chooses a higher cost (higher bid) plan, he pays the difference. If he chooses the lowest cost plan, he would get a rebate for the difference. And those who choose the benchmark plan would get a voucher for the full cost. Also, vouchers would be risk-adjusted--upward for for higher risk beneficiaries, and lower for the lower risk ones. The various competing plans would have to accept anyone who applies. So companies with excess low risk enrollees would pay a fee to make up for the more profitable booking, those with excess high riskers would get a rebate.
There is a lengthy, complicated mechanism for keeping costs down and making competition work. But various critical articles don't get into the details. Various premium support plans, as is the Ryan plan, have been proposed in the past, even bipartisan ones. But they have been a tough sell, especially to seniors who have been mediscared by opponents into fearing losing medicare "as we know it." The Ryan plan solves that scare by not affecting anyone presently over 55, or those who are younger and choose to remain on traditional Medicare.
Other competing plans exist now, such as The Heritage Foundation premium support plan. When you read the actual plans, or, especially, the commentary on the plans by those who write them, or those who support them, you obviously get a far more optimistic view than that given by the critics.
Everybody seems to agree that some reform has to be made or the whole thing goes kapooie. Kinda depends on which "vector" you prefer.
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