Medicare is forced to compete with Private Insurers. Private Insurers have the ability to lower their costs to patients, whereas Medicare does not. Private Insurers have every incentive to lower costs AND improve services to gain additional customers. Medicare is an unmovable monolith, without any flexibility. Medicare costs will be kept down as it dies on the vine, because so few people will stay in that program with better, cheaper options available to them.
I have read the plan, and I wish more of you folks would do so too.
If that is the case, then why is it that every estimate of this bill suggests that it will cost more and more into the future. What happens when private health insurers start dropping people who are too expensive to cover? To operate efficiently, they must be allowed to charge higher premiums which will meet stiff resistance from the senior lobby. Also, the "demonstration project" suffers from key problems.
1. It doesn't even start until 2010.
2. It only takes place in 6 metropolitan areas, and not the whole country. There is no guarantee it will be taken up by the rest of the country.
3. Most importantly, various providers who wanted to be insulated from both price competition and congressional micro-management or obstruction have deliberately undermined previous Medicare demonstration projects.If you want to know why demonstration projects like this fail, read this:http://www.heritage.org/Research/HealthCare/BG1708.cfm