Sen. Jim Ferlo Luncheon on Medicare and Social Security.

Please Join
STATE SENATOR JIM FERLO

PA Alliance for Retired Americans
& Western PA Coalition for Single Payer Health Care
for a luncheon to discuss the need to protect Social Security and Medicare.
Friday • December 6, 2013 • 12 Noon
Wyndham Pittsburgh University Center • 100 Lytton Avenue • Oakland
Limited Seating, Registration Required.
Please call 412-621-3006 or email dlang@pasenate.com
Please bring a new, unwrapped toy to donate to Toys for Tots.
Toys will be collected by volunteers from the Marine Corps League!
LUNCHEON FORUM
Keep Social Security & Medicare Off
the Federal Budget Chopping Block!
What is happening to our great nation? The middle class is vanishing, and
income inequality is the worst in our nation’s history. Many people work their
whole lives but have too little or no retirement savings. Proposals in
Washington call for short and long term benefit reductions to both Social
Security and Medicare. The 14th Congressional District could lose over $4
million in benefits for seniors in 2015 alone! Enacting the proposed changes
will hurt older people, local economies, women, and the disabled in greater
proportion. Join us to hear from experts who will dispute the myths, and join
with advocates who are fighting back against balancing the federal deficit on
the backs of those most in need of these cherished federal programs.
GUEST SPEAKERS
Senator Jim Ferlo — Chairman
Leo Gerard — President, United Steelworkers of America
Prof. Wayne Burton — President, PA Alliance for Retired Americans
Nicole Woo — Center for Economic and Policy Research
Andrew Coates MD, FACP — President, Physicians for A National Health Program
Ed Grystar — Western PA Coalition for Single Payer Health Care
“No Grand Bargain”

Medicare Birthday Celebration Tomorrow at Sen. Casey's Office

Sen Jim Ferlo will be joining Ed Cloonan for his biweekly demonstration to protect Medicare at Sen Casey's office tomorrow, July 26 at noon, on the 48th anniversary of the creation of Medicare.  The flyer for the event can be read here. 

**Related Posts**

Sandy Fox campaigning to make TIAA-CREF more Socially Resposible on Healthcare 

 

Biweekly Vigil at Sen. Casey's Office to Protect Social Secutiy and Medicare

 

Ed Grystar on the Other Possibilities Network

Biweekly Vigil at Sen. Casey's Office to Protect Social Secutiy and Medicare

The Western PA Coalition for Single Payer Healthcare will be holding a vigil this Friday, July 5 and every other Friday.  It will be led by Ed Cloonan and details are below.

JOIN WITH US TO STOP THE ASSAULT ON   

         SOCIAL SECURITY AND MEDICARE! 

FRIDAY PICKETLINE/VIGILS

        

      Senator Bob Casey’s Office

      Regional Enterprise Tower

         425 Sixth Avenue

         Pittsburgh 15219

             12 Noon – 1PM

                     June 21

                     July 5

                     

              

                                                          

                                                           ·         Real wages have fallen since 2008, corporations are sitting on a record cash hoard of upwards of 1.78 TRILLION dollars and corporate profits after taxes were 1.7 billion last quarter, yet both major parties want to gut Social Security and Medicare.

http://research.stlouisfed.org/fred2/series/CP/  

http://economix.blogs.nytimes.com/2013/02/12/the-growing-corporate-cash-hoard/ 

·         Democrats in the US Senate are a majority and can stop these cuts to essential programs!

·         ELIMINATING THE CAP ON THE TAXABLE INCOME FOR SOCIAL SECURITY BENEFITS NOW SET AT $113,700 WILL HELP ELIMINATE ANY SHORTFALLS FOR DECADES

http://inthesetimes.com/working/entry/14725/the_ss_austerity_battleship/

·         OVER 70 % OF THE PUBLIC STRONGLY REJECTS ALL PROPOSALS TO CUT SOCIAL SECURITY AND MEDICARE.

http://inthesetimes.com/working/entry/14725/the_ss_austerity_battleship/

·         CALL OR WRITE SENATOR CASEY AND DEMAND THAT HE TAKE A PLEDGE TO VOTE  AGAINST ANY CUTS TO SOCIAL SECURITY AND MEDICARE

WASHINGTON DC – 866-802-2833 ---- PITTSBURGH 412- 803-7370

Sponsored by:

Western PA Coalition for Single Payer Healthcare

www.WPa Singlepayer.org

Save Our Community Hospitals

PA Green Party

For more information:

Ed Grystar egrystar@aol.com 412-215-4141

Tony Buba bolex12@yahoo.com 412-351-4808

Bending the Health Care Cost Curve

On One Hand . . .

A Friday report from the Medicare Board of Trustees shows that there was a slowdown in the growth of Medicare costs in 2012. The Medicare trust fund is now projected to last until 2026, two years longer than previously estimated. Medicare spending is now growing at the historically low rate of 1.7% per year. Of course, a decline in the rate of growth doesn't mean the problem is solved. Costs are still going up. But at least they are heading in the right direction. The report attributes the decline in costs to a combination of the current recession, which is causing people to cut back on health care, and the Affordable Care Act (ACA).

Dr. Ezekiel Emanuel, one of the authors of the ACA, points out that there are two types of cost control embedded in the ACA, payment reductions and what he calls “structural and incentive changes.” The two primary payment reductions affecting Medicare are:

• Reduced payments for Medicare Advantage. Medicare Advantage allows seniors to purchase private insurance in lieu of traditional Medicare. It costs the government 14% more than Medicare even though it doesn't produce any better outcomes. That 14% is presumably being pocketed by the private insurance companies, and the government is taking it back.
• Reduced payments to Medicare providers, i.e., hospitals, home care agencies, etc. Emanuel says these organizations have profited from increased productivity in recent decades, but have not passed these savings on to the consumer. Therefore, Medicare is paying them less.

In short, the ACA made $716 million in automatic cuts to the Medicare program in 2012.  This chart shows that these two payment reductions account for the bulk of these Medicare cuts. They are the primary reason for the slowdown in the growth of Medicare spending.

The structural and incentive changes include things like bundled payments, where Medicare pays a fixed rate for an episode of care rather than fee-for-service, and Medicare's Independent Payment Advisory Board, which can make specific treatment recommendations in order to reduce excess cost growth. Most of these changes are several years away.

These cost controls are an important positive changes, since they have reduced costs without eliminating benefits to Medicare recipients. However, they're only a fraction of the amount that could be saved if the country were to move to a single payer system. First of all, they only affect Medicare, which insures 17% of Americans. Secondly, they are relatively modest cuts when you consider the excess profits currently being taken by hospitals and insurance companies.

The bottom line is that these data seem to show that the ACA is working in controlling Medicare costs, but it is only a modest first step compared to what we could and should be doing.

On the Other Hand . . .

Elisabeth Rosenthal has a long article in the Sunday New York Times about the high cost of medical care in the U. S., similar to the February Time feature by Steven Brill. Her article focuses on colonoscopies, presumably because it is a vivid metaphor for what the for-profit health care system is doing to all of us. However, her chart shows several common medical costs in which the average U. S. price tag is as much as 25 times higher than the price in other countries.

The sub-heading of the article says, “Colonoscopies explain why U. S. leads the world in health expenditures,” but they do no such thing. Merely listing the costs of medical procedures does not explain why those costs are so much higher in this country. Most of Rosenthal's argument is a tautology: Prices are high because prices are high. The closest she comes to offering an explanation is buried in the nineteenth paragraph:

A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor. Many other countries deliver health care on a private fee-for-service basis, as does much of the American health care system, but they set rates as if health care were a public utility or negotiate fees with providers and insurers nationwide, for example.

Of course, she manages to make this point without mentioning the poisonous words “single payer,” which all the other countries cited in her article have. But the Medicare data show us what could happen if the government were to take a more active role in combating greed in the health care system.

You may also be interested in reading:

A New Time Magazine Article on Health Care Costs with Stewart Discussion

An Explanation of Washington Post Graphs on the Cost of Procedures

Medicaid Expansion Update

Legalized Bribery

Tom Corbett to PA's Working Poor: "Drop Dead!" Pt. 4

Part 4. What We Can Do

On Tuesday, February 5, PA Governor Tom Corbett stated that at this time he cannot recommend accepting $38 billion in federal funding to expand Medicaid, thereby denying medical assistance to more than 700,000 Pennsylvanians. So far, I've discussed empirical studies demonstrating that Medicaid improves health and saves lives, the costs and benefits of Medicaid, how those costs and benefits are distributed in Pennsylvania, and the governor's stated reasons for rejecting Medicaid expansion.

The conclusion to this series has proven to be the most difficult to write. I've already had to change the “tomorrow” in part 3 to “next time.” It's time to tie the loose ends together.

First, let me try to justify the rude title of these posts. As previously noted, the Sommers, et al, study contains an estimate of the number of lives saved by Medicaid expansion.

Results correspond to 2840 deaths prevented per year in states with Medicaid expansions, in which 500,000 adults acquired coverage. This finding suggests that 176 additional adults would need to be covered by Medicaid in order to prevent one death per year.

Granted, this is just an estimate. The real number may be somewhat higher or lower, but both mortality and Medicaid enrollment statistics in this country are usually pretty accurate. Corbett's decision will deny health insurance to 719,000 Pennsylvanians whose income is between 46% and 100% of the Federal poverty level. This too is an estimate based on 2010 census data. Using these two estimates, we can compute the number of lives per year that would be saved by Medicaid expansion.

719,000/176 = 4085

I think we can safely estimate that Corbett's decision sentences approximately 4000 Pennsylvanians to death per year, at least for the first five years (the duration of the Sommers study). These lives will be lost in order to save the state (by Corbett's estimate) $4.1 billion over eight years, while simultaneously turning down $37.8 billion in Medicaid funds from the Federal government.

Gov. Tom Corbett

As if to add insult to injury, Corbett has been extremely generous to Pennsylvania's corporate class. His budget projects that corporate tax revenues will drop $311 million (-5.9%) in 2013-14, due mostly to rate cuts in the capital stock and franchise tax beginning in 2014. He proposes to gradually phase out this tax. He also proposes to gradually eliminate the corporate income tax beginning in 2015. Corbett has pledged $1 billion in corporate welfare to Shell Oil to attract a $5 billion ethane cracker plant to Western Pennsylvania. (These are not saltines; they are dirty petrochemicals.) This plant will create hundreds of jobs, far fewer than Medicaid expansion. And Act 13, which imposes a minimal “impact fee” on natural gas drillers, has been described as “the nation's worst corporate giveaway.” Meanwhile, the Governor is not proposing to close tax loopholes, such as the Delaware loophole, which allows two-thirds of Pennsylvania corporations to completely avoid income tax.

I would argue that the humanitarian and economic arguments in favor of Medicaid expansion are overwhelming. In addition, Medicaid expansion would be easy to incorporate into a single-payer system, should the state or the nation move in that direction. I suggest that as health care advocates we immediately begin to lobby for Medicaid expansion with all the enthusiasm we can generate.

The economic logic of Medicaid expansion is so strong, and there are so many powerful economic interests that support it, that I think we will ultimately find ourselves on the winning side of this debate. Here are some of the reasons to be optimistic:

• Governor Corbett's announcement rejecting Medicaid expansion contained the hedge words “at this time,” suggesting that he may be open to changing his mind.
• He will face serious pressure from hospitals that, instead of gaining new customers, face financial losses as a result of having to provide medical services to the uninsured (“forced charity”). Other segments of the health care industry, such as pharmaceutical and medical equipment companies, are also seeing dollar signs disappearing.
• Since Medicaid expenditures ultimately circulate throughout the economy, it's likely that Chambers of Commerce and other business interests will come out in favor of expansion.
• Public opinion data collected last Summer showed 49% of Americans favor of Medicaid expansion in their state and 43% opposed. The number in favor should increase as the costs and benefits become more clear.
• The fact that several other Republican governors who initially opposed expansion, such as Govs. Brewer of Arizona, Kasich of Ohio and Snyder of Michigan, have decided to accept it has cast Corbett in the role of an ideological extremist.
• Since Pennsylvania Democrats who have spoken out so far seem to be unanimous in their support of Medicaid expansion, it may take only a few high profile Republican defectors to convince the Governor that he doesn't have majority support.
• I hedged my statement by saying “ultimately.” Even if it isn't decided to expand Medicaid this year, there is nothing to prevent Pennsylvania from accepting it in the future, should Gov. Corbett not be re-elected and the political balance of power in Harrisburg change.

However, there is no justification for complacency. The stakes for Pennsylvania's working poor are too high.

I've previously reviewed research showing that wealthy people have the greatest influence on political decisions in this country, the influence of the middle class is much less, and the influence of the poor is virtually nonexistent. This suggests that the occasional successes progressive activists have are usually due to our interests temporarily coinciding with those of much more powerful economic forces. For example, passage of the Affordable Care Act itself may have had little to do with providing health care to uninsured Americans, except insofar as this provided the cover story for a massive transfer of wealth from the government to health insurance, pharmaceutical, and other health care corporations.

Medicaid expansion is another instance in which our preference coincides with that of important segments of the economic ruling class. Our support may make a difference; we will never know for sure. But even if Medicaid expansion occurs for reasons having nothing to do with anything we say or do, this is an excellent opportunity for health care advocates to renew their faith in the effectiveness of progressive activism.

I expect more sophisticated analyses of the costs and benefits of Medicaid expansion to become available soon. Meanwhile, if you would like to reprint this analysis or if you want me to edit it down to meet your needs, please let me know.

Legalized Bribery

Ever wonder why health care costs so much in this country, and why we get such poor outcomes in return? Here's a small piece of the puzzle.

The New York Times reports that an obscure paragraph in the recent “fiscal cliff” bill extends a delay in implementation of Medicare price controls on Sensipar, a drug used by kidney dialysis patients, for two years. The drug is manufactured by Amgen. The delay will cost Medicare—and ultimately taxpayers—$500 million. The section of the bill (Section 762) is not tranparent and does not mention Amgen by name. It's one of many examples of pork that are buried in a bill that was supposed to reduce the deficit.

Here are the details. Currently, Medicare pays for dialysis drugs individually. They determined that this created an incentive to overprescribe medication that was useless and possibly harmful. The change, now postponed, was that Medicare would pay a single, bundled rate for dialysis treatment.  That was a threat to Amgen's profits.

According to the Times, this decision was made by Senator Max Baucus (D-MT), chair of the Senate Finance Committee, and Senator Orrin Hatch (R-UT), the ranking Republican on the committee. It was subsequently approved by Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden, who negotiated the “fiscal cliff” agreement. Amgen has made over $5 million in political contributions since 2007, including $67,750 to Senator Baucus, $59,000 to Senator Hatch, $73,000 to Senator McConnell, and $141,000 to President Obama's two presidential campaigns.

Sen. Mitch McConnell
(or possibly a turtle)

The Times quotes aides to Senators Baucus and Hatch and an Amgen spokesperson as saying that the delay was justified because it would “give Medicare and health care providers the time they need to accommodate complicated changes in federal reimbursement for kidney care.” The price restraints were originally scheduled to begin in 2012. Congress granted Amgen a two year delay until 2014. The “fiscal cliff” bill extends that delay until 2016. How much time do they need?

An aide to Senator Baucus added that, “What is the best policy for Montanans and people across the country is at the heart of every decision Chairman Baucus makes.” But none of the people contacted attempted to justify the decision on medical grounds.

Amgen is the world's largest biotech corporation, with $15.6 billion in revenue in 2011. It has 74 lobbyists in Washington, including former chiefs of staff of both Senators Baucus and McConnell. Senator Hatch's leading staff member on health care policy is a former Amgen employee.

On December 19, Amgen pleaded guilty to illegally marketing Aranesp, an anti-anemia drug, for purposes the FDA had explicitly not approved. The $762 million settlement was a new record for a biotech company.

I think incidents like this pose a serious threat for single-payer advocates. One of the major arguments against single payer, which resonates strongly with the general public, is that the federal government can't be trusted to run a health care system that will provide quality medical care at a reasonable price. We usually try to counter that argument by pointing out that all other countries with single-payer systems achieve better health outcomes than we do at lower cost.

However, the United States is not like other industrialized countries. It's possible that our level of political corruption is so much higher than other countries as to make us not comparable to them. If so, it's impossible to predict how single payer would fare in this country. Of course, despite our corruption, Medicare is still cheaper than private insurance. However, if Congress ever passes a single payer bill, it is important that it contain safeguards that insulate the system from corporate and political interference.

Update (1/31/13)

The liberal organization Progressives United has latched onto this story and is asking people to sign a petition to the CEO of Amgen asking him to give back the $500 million. (Good luck on that!) The petition can be found here.

The Elephant in the Room

My wife penned the following letter to the editor and submitted it to the Pittsburgh Post-Gazette this past Saturday.  I believe that you will find her presentation compelling.

Karen Wolk Feinstein, President and CEO of the Jewish Health Care Foundation, noted to a group of experts attending a day-long meeting at the foundation's training center on Thursday that "40 cents of every health care dollar spent is wasted on preventable complications, unnecessary treatment, errors and general inefficiencies".  ("What's on the horizon in health care?" October 19)  According to the Institute of Medicine the estimated total annual waste is $765 billion.  The National Academy of Sciences breaks this down as follows:  fraud and inadequate prevention, 17%; unnecessary treatment, 28%; unnecessary high prices, 14%; inefficiently delivered services due to lack of coordination among doctors, hospitals, and other providers, 14%; and, excess administrative costs as a result of too many private insurance companies and types of insurance, 25%.  The elephant in the room that no one wants to mention is that last 25% of wasted money caused by our current health insurance system.  That is $191 billion per year.  Perhaps political contributions, charitable donations, and advertising revenue keep us from pointing to the elephant.

In contrast, Medicare, our national single payer system of publicly financed, privately delivered health care, has administrative overhead of less than 5%.  Pennsylvania has its own single payer solution, the Family and Busniness Health Security Act, SB 400/  HB 2551.  When we adopt this, presto, the elephant vanishes.

Tirzah Mason
Trafford, PA

New Graphic Explaining Medicare and Medicaid

Here is a detailed graphic on the history of Medicare and Medicaid that I found on Reddit. 

Medicare and Medicaid Are superior to private insurance in certain ways

We hear so often that medicare and medicaid are unable to provide care to patients in the way that privately funded care does, as an argument for privatizing both of them.  The logic goes that if they are not as good, then let's just do away with them.  However, this is simply not true.  The two articles included address two very different aspects of these plans, but both are crucial to understanding them.  In the first (you will have to copy and paste to read it) you will find that when 3 states that expanded medicaid were compared to 4 that did not, outcomes were superior in the former.  In the second, those on medicare were more satisfied with their health care than those in private plans.  Time and again, with equal access, private plans fall short.  It is time that we Enhanced Medicare and provided adequate funding to Medicaid, to strengthen these safety nets, instead of gutting them.  Enhanced Medicare for all is not the problem but the solution.  
 

http://online.wsj.com/article/SB10000872396390444840104577549311758980038.html?mod=googlenews_wsj

http://bit.ly/OSqb2k

Why Don't Republicans support Single Payer???

It is very hard to understand whey everyone doesn't support a single

payer system in health care. If someone wants to save money, wants to lower 

society's overall cost, improve access, then there is no other system. 

The only group in our society which does not fear bankruptcy, does not 

worry about lifetime cost, does not worry about preexisiting conditions

is that of those over 65. So what we should do is strengthen and enhance

Medicare, not gut it, or equally bad, privatize it, as a small but very

 vocal minority wants to do. 

 http://www.desmoinesregister.com/article/20120716/OPINION01/307160040

Accountable to Whom?

An article by Ezekiel Emanuel and Jeffrey Liebman promises “the end of health insurance companies.” According to these former Obama administration advisors, they will be made obsolete by accountable care organizations (ACOs).

The Affordable Care Act provides for the establishment of ACOs to serve Medicare and Medicaid patients. Essentially, a group of health care providers (doctors and/or hospitals) form an ACO and sign a contract with the government to provide care for a large group of patients. They receive a bundled payment based only partially on services provided. Some part of the payment is based on the quality of the health care they provide and their ability to control costs.

In theory, cost control can be done by better coordination of patient care, for example, with the help of computerized records. Since so much of medical care is unnecessary or harmful, a lot of money could be saved, provided the incentives were greater than the profit to be made through overtreatment. It should at least be possible to measure whether money is being saved in comparison to the current fee-for-service system.

Measuring quality of care is more difficult. But it is crucial, since without it, the incentive structure of ACOs might encourage them to withhold necessary care from their patients. But what are the criteria of good health, and how could they be measured without incurring additional expense? Health care research focuses on hospital admissions and readmissions as an indicator that the patient is not healthy, but this is an imprecise measure of health which only becomes apparent after the patient's situation has deteriorated. Like other health indicators, it can be manipulated by denying treatment.

It is possible to imagine ACOs working well under Medicare with proper oversight from government. Nevertheless, there are problems. If an ACO is to be responsible for prevention as well as treatment, subscribers must remain in the system long enough for the ACO to reap the savings that come with prevention. This is possible in a single payer system, but not in this country where there is a lot of client turnover. Also, to be accountable for all their clients' health care needs, an ACO must include specialists in all health problems, which means it must be quite large. But large organizations have greater market share, which discourages competition and leads to higher prices—just the opposite of what ACOs are supposed to do.

However, Emanuel and Liebman are suggesting that ACOs will dominate the private health care market as well. In fact, hospitals are already buying out competitors and hiring more doctors, and insurance companies are merging with hospitals in anticipation of forming ACOs. This trend is evident in the Pittsburgh area. The University of Pittsburgh Medical Center (UPMC), the largest hospital chain, has bought out competitors and has gone into the health insurance business as well. Meanwhile Highmark, the region's largest health insurer, has purchased West Penn Allegheny, the only major hospital chain not owned by UPMC. Not surprisingly, this morning's paper reports that Pittsburgh has the highest hospital care costs of any city in the U. S.

Apparently we can look forward to a brave new world in which, when we purchase health insurance, either alone or through our employer, we affiliate with an ACO which promises to keep us in good health. But Austin Frakt, a health care policy expert who is sympathetic to ACOs, suggests that they “are fine and good for Medicare, but somebody needs to think through the consequences for the private side of the market.”

The dominant characteristic of today's corporations is that they are not accountable to anyone except perhaps their stockholders. A combined health insurance-medical care corporation will have strong financial incentives to charge as much as possible for health insurance while providing as little health care as possible in return. At least under the current system, the patient is caught between two corporations pushing in different directions. If their insurance company is trying to deny them care, there is a good chance that their doctor will come to their defense and insist that they receive medically necessary treatment. If the insurance company and the doctors are all part of the same corporation, who will defend the patient's interests? Without third party oversight, what is to keep the patients from being harmed when their very lives may be at stake?

It is possible that a conscientious employer might provide oversight of an ACO with which it affiliates, since companies may want to keep their employees healthy. However, this is certainly problematic, and, in any case, individual health care subscribers are on their own under this system. I don't see how the entire country can shift to ACOs without substantial government oversight. This, of course, will be strongly resisted by hospitals and insurance companies, in part because it would start to take on the characteristics of a single payer system.

Many countries—Germany, Japan and Switzerland are examples—have systems in which both health care providers and insurers are private entities. But these countries have tight government regulation of medical services and fees. These private entities are required to cover everyone and they are permitted to make only modest profits, if any. And why should they make large profits? Under a single payer system, insurance companies are completely unnecessary, while doctors and hospitals can be limited to a “reasonable” fee for their services. If they want to increase their income, maybe they should be allowed to compete for higher wages by demonstrating that they can keep their patients healthy and, as a consequence, control costs.

Although I have serious doubts as to whether ACOs will work in our private health care system, they may be a good idea when embedded within a single payer system.

Moving Backward

If you are a supporter of single payer who believes that change in the U. S. health care system will be gradual and incremental, you probably support the Affordable Care Act, and you probably think any policy changes that move us in the direction of single payer are progress, while you oppose any changes that move us toward privatization. Medicare is the largest single payer system we have in this country. The members of the Elephant Party are nearly unanimous in their support of Rep. Paul Ryan of Wisconsin's plan to privatize Medicare. Up until now, they have been unsuccessful in getting any Jackasses to sign onto the Ryan plan. That has all changed. Sen. Ron Wyden of Oregon, a member of the Jackass Party, has joined with Ryan to propose a “compromise” plan to “save” Medicare. While it stops short of privatizing Medicare, it is a major step in that direction.

When the Affordable Care Act was being debated, supporters of single payer favored a public option to compete with private health insurance plans. Our thinking was that if the public option proved more attractive to subscribers, it would move the country in the direction of single payer. The Ryan/Wyden plan offers seniors a “private option” as an alternative to the single-payer Medicare, possibly in the hope that competition from the private sector will eliminate Medicare from the U. S. health care system (although they deny that intention).

The Ryan/Wyden plan is a premium support program, similar to school vouchers. Seniors will be given a certain amount of money to spend on health care. They will choose among several alternatives, including traditional Medicare and various private health care plans, most of which will cost more than the amount they have been given.

Here is a simplified version of Austin Frakt's summary of the plan:

• Private medicare plans will compete with traditional Medicare in an exchange. Private plans must offer the “actuarial equivalent” of what is available from Medicare. In other words, the private plans don't have to offer the same coverage as Medicare, but the coverage they offer must be of equal value.
• The premium support citizens receive is equal to the cost of either the second cheapest private plan in the exchange or Medicare, whichever is lower. If you choose a more expensive plan, you pay the difference. If you choose the cheapest plan, you get a rebate.
• Private plans may not reject an applicant for any reason; that is, discrimination on the basis of pre-existing conditions is not permitted.
• If this price competition doesn't work to contain the cost of Medicare, the cost will be capped at a growth rate equal to the growth rate of the GDP, plus 1%. This will be done by reducing support for the sector or sectors (hospitals, drug companies, etc.) most responsible for the cost increase.
• Anyone now over 55 will not participate in the new plan, which will not be implemented before 2022.

There are several potentially serious problems with the Ryan/Wyden plan. Again, I am indebted to Frakt for his thoughtful posts about premium support programs (which he favors, by the way).

• Although private insurance companies will be forbidden to turn away people with pre-existing conditions, they will find all kinds of ways to enroll only the healthiest people, i.e., by directing their advertising at affluent citizens. Traditional Medicare will be left with the sickest people, who will pay the highest fees. A process called “risk adjustment” is supposed to deal with this problem by increasing the rebate to plans that cover less healthy people, but this is after-the-fact and it's not clear how it will work.
• Private insurance companies often treat their customers badly. The deny necessary care and provide poor customer service. This can also be used to drive away the least healthy people.
• When it comes time to design the plan, Medicare will have no money to spend on lobbying and campaign contributions, while the insurance companies will be stuffing Congress-critters' pockets with cash. This virtually guarantees that the playing field will be tilted in favor of the private plans.
• Since private plans don't have to offer the same coverage as Medicare, but only the actuarial equivalent, it will be hard for seniors to compare the plans. The insurance companies have almost unlimited advertising budgets with which to confuse and mislead consumers. Most seniors citizens do not have a friend with a Ph.D. to help them pick the best plan, so many of them will make bad choices.

The combined effect of these problems will be to leave Medicare with fewer and less healthy customers. This will increase Medicare's costs, while weakening its bargaining power when negotiating with hospitals or drug companies over the prices of goods and services. This could eventually lead to the demise of Medicare.

When Walmart goes into a new community, they offer consumers heavily advertised “sales” for the first couple of years. (Since they have thousands of outlets, they can afford to run some of them at a loss for a short time.) The purpose is to drive other local retail stores out of business. Once they have eliminated the competition, they quietly raise their prices. It's possible that the insurance companies will begin by setting their prices unrealistically low, in the hope of sending Medicare into a death spiral.

It's going to be difficult to oppose a premium support plan. Critics will ask: "What can be wrong with offering people more choices? If you are really confident that single payer is more cost effective, why do you worry that people will switch to private health insurance?"  Some of our objections will sound as if we oppose giving people more choices because we are afraid they will choose unwisely. This seems paternalistic, and conflicts with most Americans' mistaken view that they are too smart to be influenced by advertising.

I apologize for the length of this post, but I believe that premium support programs are a serious threat to move our health care system in the wrong direction. The New York Times has come out in favor of premium support. The insurance companies have almost unlimited funds with which to bribe Congress and the President to pass such a program. In fact, I'm afraid that dismantling Medicare is almost inevitable. If that happens, it will be nearly impossible to pass single-payer health care in this country. How can you demand Medicare for all when there is no Medicare?

Early news reports have suggested that Senator Wyden is seen by his fellow Jackasses as a traitor for breaking ranks and suggesting major changes to Medicare. (Paul Krugman refers to him as a "useful idiot.") My guess is that the reality is quite different. They are probably grateful to him for offering them cover while they quietly line up to follow his lead. The insurance companies have millions of dollars to pass out. Right now, the Elephant Party is getting most of that money. But the Jackasses want it, and if they signal a willingness to pass premium support, they are likely to get a lot more of it. The results will be disastrous for single payer, and possibly for the country.