I'm sure that you don't need one last health-care article for the year. But 2016 will be known as the Year of Getting What You Didn't Want, so you're getting one anyway. In any case, expect Paul Ryan and His Flying Monkeys in Congress to hit health care hard before President Trump can figure out that he can't spin his way out of the destruction of Obamacare and Medicare.
Medicare first. There's a new offensive (and I mean offensive) on the Medicare front. Ryan is still hot to eliminate Medicare in order to save it by replacing it with cut rate vouchers so that recipients can enjoy their God Given Right to choose whatever substandard product they can find on the commercial market. The new twist, however, is to allow Medicare recipients to be balance billed.
Balance billing is the technical name for forcing consumers to pay the difference between a billed charge for a service and what an insurer pays. This initiative is heavily supported by our underpaid medical community, but cynics like myself point out that it will drive many seniors into bankruptcy. As I have pointed out in the past, medical providers vastly inflate their billed charges relative to their costs (for hospitals, this inflation is generally between 400 and 1,000 percent) in order to play price negotiation games with insurers. Since commercial insurers pay about 135 percent of costs in our system while Medicare pays about 98 percent of costs, the spread between the Medicare payment and the billed charge will actually be greater than it is for commercial payers who are balance billed. So great is this spread that is it likely to kill your dying grandmother faster than the cancer. Supporters of the new law are trying to ease the pain and passage of the knife blade by claiming that of course providers won't be charging whatever they want just to get high prices on the bill, since prices will be set by "contracts."
Except that they won't. Commercial insurance companies, with their millions of contracts, don't set billed prices for services. They do set caps to keep their discounts from changing when providers increase their billed prices, but that's the best they can do. And in the commercial insurance world, the people who get balance billed are those who go to uncontracted (out of network) providers. What this proposal will do is to cause more providers to drop out of the Medicare system altogether to be able to balance bill in the same way.
Why are Republican lawmakers trying to do all of this to Medicare? We know that they have the support of the medical profession (mostly); that they believe that cutting benefits will make the program last longer (and so they don't have to pay back all of the billions they have siphoned out of it over the years); and we know that the right looks at Medicare as a corrupting form of entitlement welfare. But is there also a treasure buried in there somewhere that most of us aren't seeing?
The Republicans are after two pots of gold.
First, Ryan has his eyes on both the Medicare and Social Security programs as sources of revenue for funding the stock market. Although the government "investing" public funds in the stock market is not part of any of the current Medicare proposal, it was part of the proposal in 2011 and expect to see it rise again in the current administration. The attraction of funding the stock market with all this dough is that it would cause stock prices to spike up. This would be very tasty for stockholders, of course. And the now-privatized entitlement money would get much higher returns in the short term while this bubble lasted. These brief happy days would offset to some degree the political fallout of doing it in the first place. Maybe as long as would allow a Republican congress to be re-elected.
The other big pot of gold is all that retirement money that your hardworking grandparents (or you, for that matter) socked away all these years, plus all their physical assets. The medical system wouldn't propose balance billing for Medicare users if they didn't think they could acquire massive profits out of it. The average Medicare patient will never be able to cover billed charges, but most Medicare patients do have savings, home equity, and cars. Of course supporters of the bill know that they won't be getting billed charges from everyone. But they'll get everything else. And that's the point. Why should grandma die with any money?
As for Obamacare, I won't ruin any more of your day other than to mention that AHIP (America’s Health Insurance Plans), the main insurance lobby, fearing that Ryan will be crazy enough to murder Obamacare without providing any alternative or even thinking about them, has produced a shopping list of things they would like to see. On the plus side, now that Obamacare looks like it might start making people some money, they want the execution postponed and the subsidies to be continued (just in case). On the minus side, they want the taxes currently attached to commercial premiums in order to help pay for said subsidies to be repealed so the insurers can reduce prices (right...), and they would like to kill a lot of the pesky regulations that require them to meet universal standards, since these interfere with one's God Given Right, etc.
Have a safe New Year.