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This is nothing more than a token display of resistance. He can talk big because he knows Reid is going to use the first day of the session, when a point of order can be passed by simple majority, to change the Senate rules to marginalize the Republican’s ability to block legislation via filibuster.

Looks like something from the old Market Wrapup threads.

I don’t need much tinfoil on my hat to say that this bill looks like a trojan horse to usher in a single payer system.

Not surprising. Do you remember the Medicare Catastrophic Coverage Act (or similar name) in 1989? It provided catastrophic coverage for seniors and charged them a premium for it. I remember footage of an elderly woman chasing Rostenkowski (Ways and Means chairman at the time) down the street. The bill was repealed shortly thereafter. So, I hear your point. The issue now is will they be forced to do it for financial reasons. I still think they will cut MA rates (the Dems are chomping at the bit to do this), but cuts to regular FFS benefits would be much more explosive. They will only do that as a last resort. Instead, they will try to squeeze providers. The reform bill does this in a number of ways.

Medicare Advantage rates were cut for 2010. The way they are postponing the fix of the physician fee schedule reduces MA 2011 payment rates by several percentage points. Reduction of MA payment rates is a given. The extent of the reduction is open to debate. In general, I agree with you that gutting Medicare is political dynamite. The problem is we are out of money and out of time. Pretty soon, we are going to find out it’s not so easy to borrow $1T+ for years on end, and then the S is going to hit the F. Unti then, they will try to squeeze providers, increase means testing (means testing has already crept into Medicare in that Part B premiums vary based on income level), and do whatever else it takes.

You need to distinguish between Medicare and Medicare Advantage. Medicare Advantage (MA) is the program where Medicare beneficiaries sign up with a private health plan and the govt pays the plan a per capita amount that is intended to cover the regular fee-for-service (FFS)Medicare benefits. The Medicare Advantage plan can then fill in some of the cost sharing, add additional benefits, and charge the member a premium.

Due to various changes in the law over time, the rates the govt pays MA plans have crept up over time relative to the FFS costs, so that now plans are being paid somewhere in the neighborhood of 114% of FFS costs. These additional payments get passed along to beneficiaries in the form of lower premiums and richer benefits. Of course, the govt paints it as the greedy health plans are lining their pockets.

There is definitely the political will to lower these payments and virtually everyone in the industry expects something to happen- at best payment rates won’t keep up with health cost trends. At worst, they will be cut significantly.

As a policy matter, you could argue that it is not fair that MA members are getting a greater subsidy than regular FFS members, and that payment rates should be cut. The reality though is that this will mean premium hikes and benefit cuts for MA members.

Hey, I was thinking of selling a kidney so I can afford to buy more vitamins. So Pelosi’s plan makes perfect sense to me.

I had to come out of the shadows to bump that comment. Right on!

Guy Fawkes Day connection?

3 people means not a pyscho going berzerk.

These guys had to know there was no chance of escape, so they were highly dedicated to their “cause”. That means they weren’t your ordinary thugs.

Adds up to terrorism. Whether domestic or muslim, too early to say.

These problems started under Clinton. They were greatly magnified under the Bush administration, and then pushed beyond the point of no return by Obama. We all know the left is clueless. What I hope Freepers are starting to see is that Republicans have failed us. Back under the Bush administration, people who pointed out the emerging economic problems were ridiculed here on FR. Now, it is clear those problems were real, and devastating. We have constantly heard on FR the refrain that third party votes are a waste, that we should hold our nose and vote Republican as a preventive measure. What do you expect from a party that you fail to hold accountable? You reap what you sow. The Republicans are as much to blame as the Democrats for these problems.

The right thing to do economically right now is to let the recession purge the economy of failed businesses, and to prosecute anyone that engaged in fraudulent activity. Do you think a Republican administration would have the balls to do that? No way. Politicians always try to push off the consequences of their reckless policies to after the next election. And so they blow ever larger bubbles via deficit spending. Now that consumer borrowing is saturated, the feds have become the borrower of last resort, and in the process they will destroy the dollar, and the result is not going to be pretty.

They actually make their money via an explicit profit load (and also from investment income on their reserves). They build the average claim level into their rates, which means people who incur low claims (like you mention) offset those who incur high claims. The problem you alluded to is that if insurers are forced to cover anyone who wants insurance then people are more likely to wait until they are sick to buy insurance, which will raise the average claims cost and therefore raise premiums, making insurance less affordable.

Similarly, denying claims (where appropriate) keeps insurance more affordable. The biggest problem in health insurance is that the person “buying” health care services is for the most part not paying for it. Yes, they pay for the insurance, but when it comes time to “buy” health care services, they want the Cadillac regardless of cost because the insurance company is paying for it. No one thinks in the abstract that unnecessary utilization is going to raise premiums. This is where insurers can step in to control unnecessary utilization. Studies have shown that you can achieve lower utilization and higher quality. Most providers are paid on a fee-for-service basis, so the more services they provide, the more they make. So they have little incentive to control utilization, and in fact, the threat of medical malpractice claims encourages unnecessary utilization. This resulted in the insurer stepping in to “manage” the level of care as insurance became unaffordable. During the economic boom years, people rebelled against managed care restrictions, and as a result insurers backed off. But as premiums rose, pressure increased to find some new way to control cost. “Consumer driven healthcare” emerged, where the idea is that there is more member cost sharing so that the consumer (the patient) has more skin in the game, and therefore makes more prudent purchasing decisions.

I agree with your point that denying claims is not how they make their money. Claims are usually denied because they are for a service that is specifically excluded from the coverage the person purchased or because the service is not deemed to be medically necessary (which can be a judgment call, and the patient can appeal the decision). And besides, they build the average expected claims into their rates, which would reflect the degree to which claims are denied, so if they denied more claims, it would ultimately mean lower premiums, not necessarily higher profits.

Insurers are usually not paying claims out of profit. Premiums are typically set based on expected claims + expected admin + target profit margin. Note I said “expected” claims and admin because these items are not known. Actuaries project these amounts based on past experience and expected changes between the experience period and the rating period. The actual claims will vary from the amount built into the premium rates. Sometimes they are higher, sometimes lower. When the claims are higher than expected over an inusrer’s entire book of business, losses occur. Then the insurers must pay claims out of the reserves they maintain. One important purpose of profits is maintaining the reserve levels. Another is capital investment. Many insurers are non-profit, but they still build a “profit” component into their rates, they just call it something like risk charge or contribution to reserves. The for-profit insurers typically have profit margins that are higher than the 3% cited in the article. 3% is more typical of a non-profit BCBS plan, but that can be misleading because they may be making 3% on group business, but losing a ton of money on things like individual and Medigap due to political pressure to keep these lines “affordable”.

On average Medicare Advantage plans are currently being paid about 13% more than Medicare FFS costs. The administration makes it sound like MA plans just pocket this subsidy. The reality is plans use the “extra” money to provide extra benefits (or reduce premiums) to Medicare Advantage members. If CMS cuts these payments, naturally Medicare Advantage plans will need to cut benefits and/or raise member premiums to compensate.

To be fair, MA plans do benefit from the excess payments. The additional money creates a large incentive for Medicare beneficiaries to enroll in MA plans. When payment rates were cut in the late 90s, there was a large decrease in MA enrollment and many MA carriers exited the market. When they were increased again after MMA passed in 2003, enrollment rose rapidly.

The Baucus bill replaces the current payment methodology with a competitive bidding process which will greatly reduce the amount of funds provided to plans from CMS. Plans will essentially get enough to cover FFS benefits, plus up to a 3% quality bonus they can use to fund supplemental benefits. They will need to charge a member premium for any benefits they offer beyond that.

It probably depends on what part of CMS you work for. I frequently deal with CMS actuaries, and they refer to MA and MA-PD plans. In fact, the bid instructions and call letter published by CMS refer to it this way. For example:

http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/2010CallLetter.pdf

The insurance industry is notorious for varying terminology, so it doesn’t surprise me at all that there are variations. Before Medicare Advantage, it was Medicare+Choice, and before that Medicare Risk. Sometimes you also hear Medicare HMO, although less so these days since there are now other options than just HMO.

Ah, I just noticed your sig, but I don’t understand it.

Not sure what your point is. People in the industry commonly refer to it as MA, and I defined my abbreviation in my post so it would be clear what I was referring to.

The govt pays out over $9000 per year per beneficiary, on average. And that’s after you consider that the rates Medicare pays providers (e.g. hospitals) can be as low as 15% of the hospital’s billed charge. Granted, most insurers have significant discounts off billed charges, but nowhere near that low. So, not only do taxpayers foot the bill for the $9000/year, they get stuck paying higher prices for hospital and physician services as providers compensate for low Medicare payment rates by charging private payers more (known in the industry as cost shifting).

Combine that with the fact that middle-aged people like myself probably won’t get a dime from Medicare because the system will have long since gone belly up. Most likely means-testing will be implemented in the near future (it’s already started with the Part B premiums). Probably, for Social Security too. So, if you’ve been responsible, worked hard and saved all your life, your reward will be the govt telling you that it’s not fair that you should get SS and Medicare benefits when others have greater need.

Plus, you could buy a Medigap policy for about $150/month and have virtually all your medical costs covered with no copay. Or buy an MA plan for an even lower premium and have some modest copays. Bottom line: you have it pretty good compared to what’s in store for the generations following you.

The background is that Humana (a Medicare Advantage plan sponsor) sent out a letter to their members saying that the current health reform legislation contains significant cuts to the rates CMS pays to Medicare Advantage plans, and therefore, it is likely Medicare Advantage benefits will be cut and/or the premiums that the member pays will go up. Baucus had a hissy fit and contacted CMS, who contacted Humana and told them to cease and desist.

When the administration is saying Medicare benefits will not be cut, they are talking about traditional fee for service Medicare. Medicare Advantage is the program where members voluntarily sign up with a private plan, which can be an HMO, PPO, PFFS, etc. The Medicare Advantage (MA) plan receives funding from CMS and may also charge members an additional premium. They offer benefits that are richer than traditional Medicare benefits, in some cases, much richer.

It seems pretty obvious that if the CMS payments are lowered, that MA plans will have to compensate by adjusting benefits or premiums. But somehow, the govt thinks there is this magical fat in the system and they can reduce payments by 100s of billions and benefits and premiums won’t be affected. Actually, I don’t think they are that stupid. They are most likely just pretending (i.e. lying).

I didn’t see the exact statement, but from what I heard, it was pretty innocuous (e.g. it’s likely benefits will go down and premiums up. no duh!). But CMS claimed Humana was making misleading statements.

There’s been a gold bubble alert for the last 8 years, all the way up from sub-$300. When the majority of Freepers are finally bullish on gold, it will be time to sell.

Same tired arguments I’ve been reading since gold was below $300. They pull these out every time the gold shorts get nervous.