{"id":830,"date":"2013-07-07T06:27:03","date_gmt":"2013-07-07T10:27:03","guid":{"rendered":"http:\/\/www.dougsbriefcase.com\/blog\/?p=830"},"modified":"2013-07-06T09:43:20","modified_gmt":"2013-07-06T13:43:20","slug":"obamacare-we-dont-need-no-innovation","status":"publish","type":"post","link":"https:\/\/www.dougsbriefcase.com\/blog\/obamacare-we-dont-need-no-innovation\/","title":{"rendered":"Obamacare: We Don\u2019t Need No Innovation"},"content":{"rendered":"

<\/p>

\"The<\/a>

The Ford Edsel did\u00adn\u2019t last, but the anti\u00adquat\u00aded Medicare ben\u00ade\u00adfit did, still large\u00adly unchanged near\u00adly 50 years lat\u00ader. 
[Cred\u00adit: phrenicea.com]<\/p><\/div>Begin\u00adning next Jan\u00adu\u00adary, it will be ille\u00adgal for insur\u00adance com\u00adpa\u00adnies to sell poli\u00adcies mod\u00adeled on the ben\u00ade\u00adfit that mil\u00adlions of seniors receive through Medicare.\n

And that\u2019s a good thing.<\/p>\n

As with most good things about the new health care law, though, it comes with poten\u00adtial\u00adly neg\u00ada\u00adtive impli\u00adca\u00adtions for your health coverage.<\/p>\n

Let\u2019s start with the good things. Sec\u00adtion 1302<\/a> of the law requires that all cov\u00ader\u00adage sold through the new health insur\u00adance exchanges include the new gov\u00adern\u00adment-defined \u201cessen\u00adtial ben\u00ade\u00adfits pack\u00adage.\u201d  The ben\u00ade\u00adfits that Medicare offers to 50 mil\u00adlion seniors and peo\u00adple with dis\u00adabil\u00adi\u00adties do not meet these new require\u00adments<\/a>.  That doesn\u2019t help seniors very much, but it means that the gov\u00adern\u00adment won\u2019t inflict the anti\u00adquat\u00aded Medicare pack\u00adage of ben\u00ade\u00adfits on peo\u00adple under 65.<\/p>\n

Medicare cov\u00ader\u00adage is wide\u00adly acknowl\u00adedged by mem\u00adbers of both polit\u00adi\u00adcal par\u00adties and by out\u00adside experts to be a rel\u00adic.  Con\u00adgress has refused for almost half a cen\u00adtu\u00adry to change the ben\u00ade\u00adfits pack\u00adage in any mean\u00ading\u00adful sense. There are sep\u00ada\u00adrate deductibles<\/a>,<\/span> for exam\u00adple, for inpa\u00adtient ($1184) and out\u00adpa\u00adtient ($147) care.  There\u2019s even a \u201c<\/span>blood deductible\u201d<\/a> \u2013 you have to buy 3 pints of blood before Medicare will pay for med\u00adical\u00adly nec\u00ades\u00adsary trans\u00adfu\u00adsions.  Once the deductible for out\u00adpa\u00adtient care is met, ben\u00ade\u00adfi\u00adcia\u00adries are respon\u00adsi\u00adble to pay 20 per\u00adcent of their bills for most treat\u00adment and care. Unlike with most pri\u00advate plans, there is no pre\u00adferred provider net\u00adwork where Medicare ben\u00ade\u00adfi\u00adcia\u00adries can get physi\u00adcian care for a small copay. On the inpa\u00adtient side, Medicare lim\u00adits the num\u00adber of days in the hos\u00adpi\u00adtal it will pay for both on an annu\u00adal and life\u00adtime basis.<\/p>\n

While there is a lim\u00adit on what Medicare will pay for, there is no lim\u00adit on what ben\u00ade\u00adfi\u00adcia\u00adries are expect\u00aded to pay. And they often have to pay plen\u00adty. In recent tes\u00adti\u00admo\u00adny before the House Ener\u00adgy and Com\u00admerce Com\u00admit\u00adtee, Har\u00advard econ\u00ado\u00admist Kate Baick\u00ader<\/a> quan\u00adti\u00adfied how much Medicare ben\u00ade\u00adfi\u00adcia\u00adries spend out of their own pock\u00adets for care:<\/p>\n

\u201c<\/span>With\u00adout sup\u00adple\u00admen\u00adtal insur\u00adance, 14.5% of ben\u00ade\u00adfi\u00adcia\u00adries would have faced out-of-pock\u00adet expens\u00ades of more than $2,500 in 2009, and more than half of ben\u00ade\u00adfi\u00adcia\u00adries would have had at least one year between 2000\u20132009 where they faced $2,500 or more in out-of-pock\u00adet expens\u00ades (see Exhib\u00adit). 15% would have had at least one year between 2000\u20132009 where they faced more than $5,000 in out-of-pock\u00adet expens\u00ades \u2013 or more than a third of the aver\u00adage annu\u00adal Social Secu\u00adri\u00adty income for a retired work\u00ader. And these fig\u00adures are for hos\u00adpi\u00adtal, out\u00adpa\u00adtient facil\u00adi\u00adty, and physi\u00adcian care only \u2013 ben\u00ade\u00adfi\u00adcia\u00adries face addi\u00adtion\u00adal cost-shar\u00ading lia\u00adbil\u00adi\u00adty for oth\u00ader cat\u00ade\u00adgories of care such as pre\u00adscrip\u00adtion drugs, med\u00adical equip\u00adment, and skilled nurs\u00ading facilities.\u201d<\/p><\/blockquote>\n

Medicare\u2019s most glar\u00ading omis\u00adsion is that it places no over\u00adall caps on out-of-pock\u00adet spend\u00ading, putting its ben\u00ade\u00adfi\u00adcia\u00adries at risk of finan\u00adcial ruin. That is exact\u00adly what the pro\u00adgram was designed to prevent.<\/p>\n

\u201c<\/span>No longer will ill\u00adness crush and destroy the sav\u00adings that they have so care\u00adful\u00adly put away over a life\u00adtime so that they might enjoy dig\u00adni\u00adty in their lat\u00ader years,\u201d Lyn\u00addon John\u00adson<\/a> said in sign\u00ading the pro\u00adgram into law.<\/p>\n

Despite that promise, Baicker\u2019s research found that Medicare exposed 2.4% of seniors to annu\u00adal out-of-pock\u00adet expens\u00ades for hos\u00adpi\u00adtal inpa\u00adtient and physi\u00adcian care in excess of $10,000 in at least one year between 2000 and 2009. So much for not crush\u00ading and destroy\u00ading their savings.<\/p>\n

Pres\u00adi\u00addent John\u00adson wasn\u2019t try\u00ading to hood\u00adwink seniors when he spoke those words. The gov\u00adern\u00adment sin\u00adcere\u00adly believed that it was pro\u00advid\u00ading them with the pro\u00adtec\u00adtion it promised by giv\u00ading them state-of-the art Blue Cross-Blue Shield health cov\u00ader\u00adage \u2026 for 1965.<\/p>\n

In a 2012 report to Con\u00adgress, the Medicare Pay\u00adment Advi\u00adso\u00adry Com\u00admis\u00adsion (Med\u00adPAC<\/a>), a group that advis\u00ades Con\u00adgress on the Medicare pro\u00adgram, wrote:<\/p>\n

\u201c<\/span>Medicare\u2019s ben\u00ade\u00adfit pack\u00adage \u2026 has remained sub\u00adstan\u00adtial\u00adly unchanged since 1965. Dur\u00ading that time, insur\u00adance prod\u00aducts in the pri\u00advate sec\u00adtor have under\u00adgone numer\u00adous changes, med\u00adical tech\u00adnol\u00ado\u00adgy has evolved rad\u00adi\u00adcal\u00adly, and Medicare pay\u00adment sys\u00adtems have changed as well. Over the years, Medicare FFS<\/span> prices and the amount of ser\u00advices ben\u00ade\u00adfi\u00adcia\u00adries receive have grown dra\u00admat\u00adi\u00adcal\u00adly; as a result, some ben\u00ade\u00adfi\u00adcia\u00adries may now incur very large cost-shar\u00ading lia\u00adbil\u00adi\u00adty because under the cur\u00adrent ben\u00ade\u00adfit design no upper lim\u00adit exists on the amount of Medicare cost-shar\u00ading expens\u00ades a ben\u00ade\u00adfi\u00adcia\u00adry can incur.<\/p>\n

 <\/p>\n

\u201c<\/span>Cur\u00adrent law makes it dif\u00adfi\u00adcult to change Medicare\u2019s ben\u00ade\u00adfit design as our health care sys\u00adtem evolves. Although the prac\u00adtice of med\u00adi\u00adcine and med\u00adical tech\u00adnol\u00ado\u00adgy change rapid\u00adly, fair\u00adly rigid statu\u00adto\u00adry para\u00adme\u00adters give Medicare\u2019s pro\u00adgram man\u00adagers lit\u00adtle flex\u00adi\u00adbil\u00adi\u00adty to change its ben\u00ade\u00adfit design in response, even as oth\u00ader insur\u00aders change their ben\u00ade\u00adfit packages.\u201d<\/p><\/blockquote>\n

Med\u00adical care evolves and pri\u00advate insur\u00adance cov\u00ader\u00adage evolves with it. That evo\u00adlu\u00adtion is nev\u00ader even and often not pret\u00adty, as the excess\u00ades of some HMOs in the 1990s proved. But the pri\u00advate sec\u00adtor gen\u00ader\u00adal\u00adly finds a way to accom\u00admo\u00addate change. Gov\u00adern\u00adment does not.<\/p>\n

Near\u00adly half a cen\u00adtu\u00adry lat\u00ader, the gov\u00adern\u00adment is about to repeat Pres\u00adi\u00addent John\u00adson\u2019s mis\u00adtake. Under the new health care law, all insur\u00aders will have to sell poli\u00adcies that cov\u00ader a gov\u00adern\u00adment-defined \u201cessen\u00adtial health ben\u00ade\u00adfits pack\u00adage.\u201d  Every health plan sold to indi\u00advid\u00adu\u00adals and small busi\u00adness\u00ades in a state has to be iden\u00adti\u00adcal. Only deductibles and cost-shar\u00ading can vary and, along with them, pre\u00admi\u00adums. High\u00ader deducible poli\u00adcies will cost less than poli\u00adcies with small\u00ader deductibles but cov\u00adered ben\u00ade\u00adfits can\u00adnot vary. The state will choose a \u201cbench\u00admark\u201d plan, gen\u00ader\u00adal\u00adly the one with the largest enroll\u00adment in the small group mar\u00adket. In many states, that would be Blue Cross. Sound familiar?<\/p>\n

The same gov\u00adern\u00adment that offers seniors 1965 state-of-the-art health ben\u00ade\u00adfits will now offer 2013 state-of-the-art health ben\u00ade\u00adfits through the new health insur\u00adance exchanges. If expe\u00adri\u00adence is a reli\u00adable guide, peo\u00adple liv\u00ading in 2060 will also get 2013 state-of-the-art coverage.<\/p>\n

Back\u00aders of the law will say that the \u201cessen\u00adtial health ben\u00ade\u00adfits\u201d pack\u00adage will change with the times because the Sec\u00adre\u00adtary of HHS<\/span> is required to review it peri\u00adod\u00adi\u00adcal\u00adly. Sub\u00adsti\u00adtut\u00ading the judg\u00adment of a polit\u00adi\u00adcal appointee for that of Con\u00adgress is hard\u00adly an improve\u00adment. What the Sec\u00adre\u00adtary will do is ref\u00ader\u00adee fights among lob\u00adby\u00adists, with dis\u00adease groups ask\u00ading for more gen\u00ader\u00adous cov\u00ader\u00adage of their favored con\u00addi\u00adtion and insur\u00aders object\u00ading that such addi\u00adtion\u00adal cov\u00ader\u00adage will result in high\u00ader costs to indi\u00advid\u00adu\u00adals (pre\u00admi\u00adums) and the gov\u00adern\u00adment (since high\u00ader pre\u00admi\u00adums will trig\u00adger high\u00ader sub\u00adsi\u00addies). Future Sec\u00adre\u00adtaries will favor one group or the oth\u00ader on an ad hoc basis, ren\u00adder\u00ading judg\u00adments that reflect their own pref\u00ader\u00adences and the polit\u00adi\u00adcal imper\u00ada\u00adtives of the moment.<\/p>\n

More\u00adover, the new health law, unlike Medicare, freezes the pri\u00advate mar\u00adket in place. The law for\u00adbids insur\u00aders to sell a prod\u00aduct in the indi\u00advid\u00adual or small group mar\u00adket that devi\u00adates from the essen\u00adtial health ben\u00ade\u00adfits rigidi\u00adties. It makes inno\u00adva\u00adtion ille\u00adgal. The Medicare ben\u00ade\u00adfit looks so quaint and dat\u00aded only because we can com\u00adpare it to the ben\u00ade\u00adfits that most of the rest of us have in pri\u00advate plans. Since gov\u00adern\u00adment now dic\u00adtates what those plans will sell, we will lose our point of comparison.<\/p>\n

Oba\u00admacare res\u00adur\u00adrects Pres\u00adi\u00addent Johnson\u2019s con\u00adceit that gov\u00adern\u00adment knows exact\u00adly what insur\u00adance should cov\u00ader.  Gov\u00adern\u00adment knows which health ben\u00ade\u00adfits are \u201cessen\u00adtial\u201d and which are not, leav\u00ading no room for inno\u00adva\u00adtion or indi\u00advid\u00adual pref\u00ader\u00adence.  That there is lit\u00adtle rea\u00adson to hold this con\u00adceit \u2014 and sub\u00adstan\u00adtial rea\u00adson to doubt it \u2014 doesn\u2019t mat\u00adter to the gov\u00adern\u00ading class. They are con\u00advinced in their bones that they are right and that we all will be bet\u00adter off if we sub\u00admit to their judgment.<\/p>\n

Ken\u00adneth Minogue<\/a>,<\/span> who until his recent death was a Pro\u00adfes\u00adsor at the Lon\u00addon School of Eco\u00adnom\u00adics, cap\u00adtured the essence of this mind\u00adset when he wrote:<\/p>\n

\u201c<\/span>An ide\u00ado\u00adlog\u00adi\u00adcal move\u00adment is a col\u00adlec\u00adtion of peo\u00adple, many of whom could hard\u00adly bake a cake, fix a car, sus\u00adtain a friend\u00adship or a mar\u00adriage, or even do a qua\u00addrat\u00adic equa\u00adtion, yet they believe they know how to rule the world. The uni\u00adver\u00adsi\u00adty, in which it is pos\u00adsi\u00adble to com\u00adbine the\u00ado\u00adret\u00adi\u00adcal pre\u00adten\u00adsion with com\u00adpre\u00adhen\u00adsive inep\u00adti\u00adtude, has become the nat\u00adur\u00adal habi\u00adtat of the ide\u00ado\u00adlog\u00adi\u00adcal enthusiast.\u201d<\/p><\/blockquote>\n

Peo\u00adple \u201cwho com\u00adbine the\u00ado\u00adret\u00adi\u00adcal pre\u00adten\u00adsion with com\u00adpre\u00adhen\u00adsive inep\u00adti\u00adtude\u201d no longer con\u00adfine them\u00adselves to acad\u00ade\u00admia. They have found a new habi\u00adtat: government.<\/p>\n

And a new ves\u00adsel into which to pour their the\u00ado\u00adret\u00adi\u00adcal pre\u00adten\u00adsions: Obamacare.<\/p>\n","protected":false},"excerpt":{"rendered":"

Begin\u00adning next Jan\u00adu\u00adary, it will be ille\u00adgal for insur\u00adance com\u00adpa\u00adnies to sell poli\u00adcies mod\u00adeled on the ben\u00ade\u00adfit that mil\u00adlions of seniors receive through Medicare. And that\u2019s a good thing.<\/p>\n","protected":false},"author":3,"featured_media":839,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","wp_typography_post_enhancements_disabled":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"nfd_image_url":"","nfd_onboarding_generated":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[17,16,35,124],"tags":[391,389,386,119,122,385,388,392,390,1183,387,1188],"class_list":["post-830","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-entitlements","category-health-care","category-medicare","category-obamacare","tag-blue-cross","tag-energy-and-commerce-committee","tag-essential-health-benefits","tag-health-insurance","tag-hhs","tag-innovation","tag-kate-baicker","tag-kenneth-minogue","tag-lyndon-johnson","tag-medicare","tag-medpac","tag-obamacare"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t