Democrat Healthcare Strategy: Cut Choice, Reduce Benefits

The only way that Democrats favoring government-run healthcare are going to get their way is by eliminating free market choices, to increase dissatisfaction so that Democrat proposed nationalization panaceas will be seen as the only alternative.

That’s their strategy in attacking Medicare’s Part D prescription benefit, the premium costs of which have come in well lower than government forecasts due to sharp price negotiating by experienced insurance companies. Democrats point to the Veterans Administration direct negotiating sometimes lower prices, but fail to mention that the VA’s list of drugs is far narrower than available to Medicare Part D participants.

Now, Democrats want to undermine the HMO Medicare Advantage alternative to conventional Medicare, which offers broader benefits at lower out-of-pocket costs to seniors. Democrats want to reduce the subsidies that go to insurance companies that offer Medicare Advantage, saying it goes to insurers’ profits. However:

The insurance industry counters that the payment gap varies by region. In urban areas, the payments for managed care are comparable to fee-for-service. It's in rural areas where the difference is most dramatic, said Karen Ignagni, president and CEO of America's Health Insurance Plans.

But that is by design, she said. Medicare also has a subsidy for rural hospitals. If it didn't, then there would be fewer hospitals in rural parts of the country. The same concept applies to insurers.

If the payments are lowered, she said, "there would be a contraction of choices, and members of Congress have worked very hard to get choices in those areas." …

Insurers get only a portion of that funding. Most of the money is passed through to the health care providers they contract with.