Ezra Klein: How to Look at Medicare Reform

[flpoljunkie]

(Emphasis mine)

How to look at Medicare reform

By Ezra Klein
04/04/2011


Tyler Cowen has some rules for assessing proposed reforms of the Medicare program. I have just one: Can you tell a coherent story of why these reforms make it cheaper to treat a sick person?

In health care, we know a couple of things: The cost of health care is the cost of treating sick people. We’re not willing to tell sick people — and particularly not elderly sick people — who can’t afford care that they can’t have the treatments their doctors recommend. So reforms that rely on some version of “we simply won’t give old people enough money to buy health care” won’t stick. Reforms that will work do some combination of (1) making treatments cheaper, or (2) making treatments less necessary.

If I were to make the best possible case for Ryan-Rivlin, I’d do it like this: Yes, Medicare is much cheaper than private-sector health insurance that’s similarly generous. But perhaps health insurance simply shouldn’t be that generous. Perhaps it’d be better if seniors simply chose worse plans, or plans that controlled costs more tightly. The problem is that this was sort of the idea behind Medicare Advantage, which gave seniors the option to choose managed care plans. The managed care plans ended up being more expensive than traditional Medicare. And I think we all agree that the worst possible outcome is that seniors and taxpayers end up paying more for less.

[RUMMYisFROSTED]

1. Cowen's Rules?

I'm partial to RiF's Rules.

[high density]

2. It's cheaper (to the government) because the government ends the program

Ending Medicare and Medicaid is the purpose of the proposed "reform."