By Dave Anderson:
Brad Delong summarizes the CBO's take on Ryan's plan to effectively abolish Medicare:
under current law the CBO projects that the U.S. government will spend $35,000 year-2010 dollars to cover a 75-year old Medicare patient in 2050.
Under the Ryan plan, however, the CBOI projects that a 75-year old Medicare patient in 2050 will have to spend $52,000 year-2010 dollars to buy a Medicare-equivalent plan in 2050. Of this, Medicare will reimburse the patient for--a mere $10,000.
Plus there are all the Medicare copays that 75 year olds will have to pay...
Why the $15,000 difference? Because without Medicare's bargaining power on the other side for-profit hospitals and for-profit doctors will charge more, and because of the extraordinary overhead of private health insurance companies as they spend trillions trying to figure out how to craft their policies so as not to pay for sick people.
And that assumes a moderately ill/medium intensity healthcare using 75 year old can get anything issued to them as the Ryan plan would strip the ACA community rating protections from current law.
Ryan is making an excellent argument for single payer as the limited single payer in the US system has done an incredible job of holding costs below private payer costs because it has bargaining power consumnate with its size. An even larger single payer system with an even smaller "escape" hatch of secondary payers would have even more significant bargaining power.
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