Benemax

Readers of this blog may have noticed that postings have been a bit thin of late. That is because (1) the House has passed its Health Care Reform bill and is on hold now for the Senate and (2) the official Senate bill changes daily, sometime hourly. Reacting to each twist or turn would be a waste of time. Now, however, the provisions of the Senate bill are beginning to take shape and it’s time to do some analysis.

Most of us hoped that the legislative process would result in an on-going improvement in the bills’ provisions. We thought that debate, ammendment and compromise would winnow out the bad ideas anad bring new good ideas to the forefront. The opposite has happened!

 The bills keep growing in length (2,000 pages at last count, up from 800 at the beginning), the provisions are becoming ever more convoluted and arcane and the worst ideas seem to be winning out over their better rivals.

Case in point: earlier we had a great debate (followed closely in this blog) over the idea of creating a “public option” (government run) health plan to compete with private insurance companies. There was something to be said for both sides. But now, a “compromise” has emerged and part of that compromise is a provision that would permit people between the ages of 55 and 64 to buy into Medicare. What’s wrong with that?

Just everything! First, Medicare does not provide the comprehensive coverage most Americans want. As a result, most seniors also purchase a “Medigap” policy to pay for all the things Medicare won’t.

Second, the Congressional Budget Office (CBO) projects that the premium for single coverage would be $600/month. How is that a good deal? It’s almost double what the average single pays for health coverage now.

Third, because this plan is part of Medicare, health care providers will be paid at Medicare rates…that’s 20% to 30% below market rates. So the physicians are being asked to subsidize this product for the benefit of the 55 to 64 year old community. That subsidy is what allows the cost to be as low as $600/month. Without the subsidy…

Fourth, this is the same Medicare program that we’ve been told may go bankrupt in 10 years. It’s a bit like evacuating the passangers from the Titanic onto a ship that is already going down.

So everyone loses! Less benefit, higher premiums, lower compensation for health care providers and more stress on an already strained Medicare program. The perfect solution…if you live inside the Beltway!