Privatize Medicare? No thanks!
Under this plan, as proposed by House Budget Committee Chairman Paul Ryan, R-Wis., and former Clinton Budget Director Alice Rivlin, American seniors would receive a federal subsidy to purchase private health insurance policies from competing insurers of their choosing. In other words, Medicare would become privatized, and seniors could select from among hundreds of for-profit commercial or Blue Cross plans across the country, based on their benefit structures, provider networks and premium costs.
Is this a good idea? I think not, for the following three reasons.
The first has to do with the meaning of “choice.” When it comes to choice in health care, I believe that what Americans really want is the ability to choose their own doctors and their own hospitals, rather than their health insurer. In fact, I honestly believe that the average citizen could care less about who their employer’s insurance company is, as long as the ability to pick their own health care providers is preserved.
Under the present system, that is virtually impossible. Most working Americans get their health insurance through their jobs, and their insurance is chosen for them by their employers’ human resources department, generally on the basis of premium cost. And along with that assigned insurer comes a fixed network of providers - doctors, hospitals, outpatient labs, physical therapists, etc. - chosen by their insurer. If a worker chose an out-of-network provider, he/she would have to pay the full cost of seeing that provider, or at least incur a higher co-pay than would be the case if the chosen provider was in-network.
To explore this further, consider how you might currently choose a hospital on the basis of publicly available information. Right now, you can visit the website www.hospitalcompare.hhs.gov and, by typing in your zip code, you can compare up to three local hospitals on the quality of medical care they provide to inpatients with pneumonia, heart attack or congestive heart failure. For each hospital, you can find the typical cost and 30-day mortality rate for each of these diseases. You can also check to see how each hospital performs in preventing surgical infections and blood clots. And you can rank each hospital in terms of creature comforts, like noise level, cleanliness, doctors’ communication skills, and treatment of pain.
All of this is obviously of interest to an educated consumer, and it certainly comports with the public’s desire for more transparency in health care. But here’s the catch: What good does it do for you to know if Hospital A is better than Hospital B, if your insurance plan does not cover the costs if you go to Hospital A (or, if it does, you’d have to pay more out-of-pocket than if you went to Hospital B)? If the purpose of insurance is to limit your out-of-pocket costs for the medical care you value, why should you have to pay more to see a higher quality provider? Clearly, cost is a prime factor in personal healthcare decision-making, even more so for individuals and families of limited financial means. As a practical matter, our current system guarantees that their “choice” will be constrained by the cost of care as seen by their insurer.
The second reason is based on the proposed amount of the Medicare vouchers. Mr. Ryan’s plan, as spelled out in his “Roadmap for America’s Future”, is for those who are now under the age of 55 to receive a payment - as they become Medicare-eligible in 10 years or more - of $11,000, with adjustments for income and disease burden. With the current annual family premium for a private insurance policy averaging $14,000 and climbing, it seems obvious the proposed payment is insufficient for the typical middle-class senior to purchase an insurance policy that would provide meaningful coverage at the time of retirement.
And the third reason for opposing Medicare vouchers is the fact that privatizing Medicare would presumably remove the option of continuing the status quo. As has been the case with attempts to privatize Social Security, there are millions of Americans who prefer government financing of social insurance programs over control by profit-oriented Wall Street firms, thank you very much.
Rather than deconstructing Medicare as we know it, perhaps we should try another tack. Let’s work instead to expand and improve the Medicare we have now, so that everyone - not just seniors - would have access to the health care providers of their choice, without the financial barriers that are characteristic of for-profit health plans. Let’s make health care truly universal, for all people and for all conditions, regardless of where they live, who they work for, or how much they earn.
In other words, let’s cut out the middlemen and their inherent inefficiencies, put people before profits, and push for a single-payer health insurance program instead.
Dr. James C. Mitchiner is an Ann Arbor physician and the former president of the Washtenaw County Medical Society.