Health Care BS

Health Affairs asks the following question relating to Marsha Gold’s new piece on MA: Are Medicare PFFS plans worth it? I would respond with a qualified yes.

The caveat involves some very real marketing abuses. My staff, which includes registration, scheduling, and customer service people who routinely interact with our Medicare patients, confirm that stories such as those discussed in yesterday’s Health Blog are not isolated or exaggerated. In fact, as I wrote back in March, I have been frustrated at how long it took the news media to focus on this story.

Nonetheless, I still believe the Medicare Advantage program, including its PFFS component, offers important benefits that should not be abandoned because of fixable marketing issues. For example, as Grace-Marie Turner points out, the MA program has provided minorities and low-income patients with an important safety net:

The NAACP … recently urged lawmakers not to reduce funding for MA plans, telling them that MA plans “disproportionately provide coverage to low-income and racial and ethnic minority beneficiaries.

Turner also points out that concerns over cost may be based on faulty calculations:

In 2006, a Medicare advisory panel concluded that MA enrollees cost on average 12 percent more than those covered by traditional Medicare … But the Medicare agency in Washington calls these calculations flawed, determining that MA plans are paid just 2.8 percent more than the cost of traditional Medicare.

Most objections to MA seem to come from “progressives” who (rather ironically) seem heavily invested in “traditional” Medicare. An illustrative example can be found in Paul Krugman’s conspiracy theory about the “plot” to undermine that venerable program:

The plot against Medicare … the stealth privatization embedded in the Medicare Modernization Act … is proceeding apace.

I would submit, however, “privatization” should not be viewed with such alarm. In fact Joseph Antos, of the American Enterprise Institute, makes a good case for free-market competition as Medicare’s only hope for future solvency.

As the Part-D experience has shown, the best way to lower costs is through more competition … Congress should build on this success and allow tradition Medicare to adjust its benefits … in response to changing consumer demand.

So, again, I think MA and its PFFS plans are indeed worth it.