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This is How Government Competes with Private Health Care Companies

Mike Feehan at Insureblog has the data dump on government playing umpire and competitor in matters of health care. He uses Medicare and its private insurance competitor Medicare Advantage as an example:

As of March 2009, Kaiser Family Foundation estimated total Medicare Advantage enrollment was about 10 million seniors. That's 22% of the total Medicare-eligible population of 45 million - about one out of five. Wait, there's more: since 2003, the enrollment in Medicare Advantage plans has doubled. Sounds like the private companies are doing a great job competing with Medicare, right? Wait, there's more.

President Obama announced before his Inauguration his intention to eliminate Medicare Advantage plans. Obama said:

"We've got to eliminate programs that don't work, and I'll give you an example . . . We are spending a lot of money subsidizing the insurance companies around something called Medicare Advantage, a program that gives them subsidies to accept Medicare recipients but doesn't necessarily make people on Medicare healthier."

But is it true that Medicare Advantage plans "don't work"? No. It's not true. If they didn't work 10 MILLION people would not have voluntarily enrolled. If they didn't work the enrollment would not have DOUBLED in the past 5 years. Medicare Advantage plans work just fine.

Well then, is it true that the government "subsidizes" private Medicare Advantage policies? No. It's not true. It pays premiums to the insurance companies that it would otherwise have paid to itself. That is not a "subsidy".

Well, then, what is really going on?

Here it is: the private plans are beating Medicare fair and square, and the new administration doesn't like that one bit. Why? Because it shows that a single-payer plan might not be needed, and might not be such a good idea anyway. So Obama decided to change the rules - NOT to make Medicare more competitive - but to eliminate its competition. And that is EXACTLY how the government can be expected to act to protect its public health insurance option against private companies.

So when Obama says that a public option is necessary in order to "keep the private insurance companies honest," he's is passing on some of the worst disinformation that's out there (someone, quick, report him to [email protected]!) because the reality is, the government will always make sure that it wins, even if a significant number of the American people want its competitor, as is the case with Medicare Advantage. And note how Medicare Advantage is advertised by the government (emphasis mine):

"[Medicare Advantage] offers beneficiaries new insurance options that broaden the ways in which they can receive health care. Importantly, that also includes the option to stay right where they are. If beneficiaries are happy with the way they get their health care now, they don't have to do anything."

Nancy-Ann Min DeParle,
Former Administrator of the Centers for Medicare & Medicaid Services
(The agency that administers the Medicare program.)

Sound familiar? Please note that Nancy-Ann DeParle is now President Obama's Director of the White House Office of Health Reform. That's just fancy talk for Health Care Czar. Expect her to play a very important role in ObamaCare.

Michael F. Cannon at The Cato Institute's blog writes this, which is in line with Mr. Feehan's remarks above:

Medicare Advantage allows seniors to choose a private health plan rather than get their health coverage from the traditional Medicare program. The Left has complained Medicare Advantage costs taxpayers more than if those seniors remained in the traditional Medicare program. (I agree, though the reason is not because government is more efficient than private insurance.) The Left has long dreamt of eliminating Medicare Advantage, in part because it poses a threat to their plans for a completely government-run, single-payer health care system. Yet the Left has had to settle for attacking and attempting to eliminate the "overpayments" that Medicare Advantage plans receive. Of course, one can eliminate Medicare Advantage stealthily by reducing payments to private plans until none will participate.


So, what does this tell us? President Obama isn't for more competition; he's for less by eliminating the private insurance option that millions of seniors prefer to use over Medicare. It also is more proof that Obama really does want a single payer health care system, which he admitted to years back but denies now. If you don't think the same thing with happen with private health insurance if ObamaCare is passed and implemented, you are a fool.


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Comments (18)

No! You've just taken that... (Below threshold)

No! You've just taken that all out of context, Kim!


I just clicked on comments ... (Below threshold)

I just clicked on comments and a big red sign flashing WINNER was displayed. If I click on it like it says, is this a scam, or a real deal type thing. Please answer. Thanks

I pay $130 a month for my s... (Below threshold)

I pay $130 a month for my supplemental plan and I want to keep it. It gives me more flexibility and options as the reimbursement rate for treatment is higher then just medicare.

So my question is, I don't understand what the problem is? Can some one explain it , please.

" So my question is, I don'... (Below threshold)
Les Nessman:

" So my question is, I don't understand what the problem is? Can some one explain it , please. "

The problem is, if they tweak the existing system (clean up waste, fraud, abuse in gov't programs, tort reform, allow insurance over state lines, etc..) then they couldn't say the system is 'broken' and have the gov't take it over.

They are not interested in 'fixing' healthcare unless it involves massive gov't control.

Nessman NAILED IT!... (Below threshold)

Nessman NAILED IT!

CONTROL! It's what the Dems have always been about. Being the 'elite' of society, it is up to them to apportion all benefits in order to "level the playing field" and to insure "fairness" throughout the land. All Hail The Obamassiah and His Prophets Pelosi and Reid.

Now, if we all go to those ... (Below threshold)

Now, if we all go to those town hall meetings and ask polite, respectful questions of our politicians, I'm sure all of this can be explained in a polite, respectful way.

All the way until this bag of crap gets passed into law. Then the story will change. Costs will go wildly out of control as we absorb 20 million illegal aliens, who largely pay no income tax at all, into public healthcare, make employer-based insurance a sucker deal for businesses, and drive insurance companies out of business. Then the bureaucracy grows like it has in the UK until it's the largest employer in the world, and costs soar out of sight.

It will only be reasonable then that we must come together to find ways to reduce the growth in medical care costs before it destroys our economy. There must be a way to fund all those abortions, sex change and cosmetic surgery operations. Why, the largest and fastest growing segment of healthcare is the tremendous cost of caring for old people. Something must be done, our politicians will say. If only we could find a way to deal with all those inconvenient old people, our problems with healthcare costs, dwindling fossil fuels, global warming, deforestation, air and water pollution, and our overused public lands would simply disappear.

Maybe we could make a movie about it. Call it Logan's Run or something. The only thing we would have to change from the original is the year. We won't have to wait until the year 2774.

If you don't get this, you're probably under 50 and a Democrat.

"Now, if we all go to th... (Below threshold)

"Now, if we all go to those town hall meetings and ask polite, respectful questions of our politicians, I'm sure all of this can be explained in a polite, respectful way."

Yeah, the Chicago way. "Sit down, STFU, or we're gonna break your heads. Obama 'won', you don't get no input on this, so SIT DOWN AND STFU!"

Madalyn -It's just... (Below threshold)

Madalyn -

It's just an ad.

Basically, they're trolling for folks who aren't familiar with things like that. You can click on it, but you're not going to find anything there but (usually) a pitch for something you 'won' that'll cost a shipping and handling fee.

In other words, it's a scam. Looks nice, promises something great, delivers nothing worthwhile, costs a lot more than the value you receive.

There's a lot of stuff like that out there. The thing to remember is the old saying:

"If it looks too good to be true - it usually is."

Excellent post, Kim.<... (Below threshold)

Excellent post, Kim.

Medicare Advantage is one of the few smart moves made by the Federal Government. It gives seniors the option to have real private health insurance (with better coverage than Medicare could provide) for less money than Medicare would spend providing those same services.

If you are enrolled in a MA plan, you continue to pay your monthly Medicare premium (which is deducted from your monthly Social Security payment) and your MA HMO bills Medicare directly for the cost of your monthly MA policy premium. Thus seniors have no extra out of pocket costs, and Medicare only pays a monthly HMO premium, which is generally much cheaper than paying for medical care and associated red tape. And currently you also have the option to purchase a private supplemental medical plan in addition to Medicare, which will cover costs that Medicare doesn't pay. These are often included in standard retirement benefits packages.

Les Nessman, you are right on the money. Medicare Advantage works; the only reason to eliminate it (and private Medicare supplemental insurance) is so that seniors have no other option but Medicare.

Thank you Michael, that is ... (Below threshold)

Thank you Michael, that is exactly what I was asking about. kathie

Very insightful article. H... (Below threshold)

Very insightful article. Here's the lesson I draw from it: Allow a public option because in a competitive marketplace, the private insurance companies will thrive. That way, people who have no insurance now will be covered -- a comparative advantage to them. Those who are happy with their private insurance get to keep -- no harm to them. And, the insurance companies still come out on top because they can out-compete the public option. Looks like we should have consensus then.

To JLawson - Thanks for the... (Below threshold)

To JLawson - Thanks for the info. Being new to all this I was curious. I usually am very careful about not falling for the old "get something great and it will cost you nothing". I appreciate the heads up. Looks like you are one of the "good guys" looking out for us that are not as knowlegeable. It is truly appreciated. Also, I would like to say a big Thank You to Wizbang for all the info that has been put out in the open so we can all make informed decisions. I don't know anything about blogging, is this a one-person type website, or is it a group of people? You really don't have to answer any questions, I was just curious. I went to another website (will not be named) that was so filled with vile and unfounded accusations regarding Ms. Palin, J. McCain, G. Bush, etc. that I was appalled. I posted a comment and had to sign up for their newsletter. All I said in the comment was that Ms. Palin had class and morals, which a lot of Dems don't, and they would not publish my comment. I guess if you are not a supporter of the following you are useless to the other side:
O'Coma (President)
Mudshell (Wife of Said President)
Marxist (Daughter of said yuk yuk yuk)
Socialist (other daughter)
Sen Chris Duh (Dodd)
Sen Ted Killer (Kennedy)
House Speaker Nancy Pissoli Pelosi)
Barney Flanks (Franks)
Arlen Spectacle (Spector)
Robert Glibbs (Gibbs)
Reverened Wrong (Wright)
Bernadette Dong (Dohrne)
William Slayers (Ayers)
Father Finger (Phflager)
There are hundreds of others, but I think I made my point VERY CLEAR!

I think you all get the picture. They claim their side (the Dems) are not vile, but didn't the Huffington Post place a comment that they "Hope Nancy Reagan falls down and dies". What a sick thing to say. I also remember the Dems making fun of Tony Snow when he was dying of cancer. SICK SICK SICK. Is this what we have as a leader and his cronies? At least when I called Ted Kennedy a killer, HE REALLY IS!!!

Madalyn: Wow! Do your par... (Below threshold)

Madalyn: Wow! Do your parents know you're surfing this site?

"Mudshell"? Why would you r... (Below threshold)

"Mudshell"? Why would you refer to Michelle as "Mudshell"?

Madalyn's not a racist because she says she isn't!

There are hundreds of others, but I think I made my point VERY CLEAR!

That you're a pissed-off eight-year-old racist? Yes, you sure did.

My name is Madalyn - I am g... (Below threshold)

My name is Madalyn - I am going to try and answer what was commented on regarding my comments. I am pushing 70 years of age. I have 9 kids, 24 grandkids (w/1 in heaven) and 4 great-grandkids. I have worked hard all my life to better myself, and I resent those who want to steal from me to pay for the lazy bastards that want to do no more than sit around collecting welfare whining about how awful things are for them. All the while their kids are wearing designer clothes, the babies have pierced ears with diamonds, and everyone has a cellphone. I can't afford it, and I resent my being forced to pay for it for some lazy piece of shit that won't get off their duff and get a friggin job.

I don't believe my parents know I am surfing these blogs because my father has passed on and my mother is in a nursing home. Do I want Obamacare for my mom? HELL NO!! She is fine the way she is. Do I want Obamacare for myself? HELL NO!!

I am a cancer survivor, and I totally resent anyone making fun of someone who is dying of cancer.

Now do some of you who keep your heads in the sand understand why some of us have had enough of lies and bullshit that comes out of Obama's mouth? I can cuss with the best of them, and I learned the hard way. I grew up in a family of 13 kids and we were POOR. We never asked for a handout and we didn't get one. We did without. That included coats in the wintertime in Montana, and shoes with holes in the bottom that we put paper in to keep the snow out when we walked to school. We NEVER had enough to eat, but none of us ever expected someone else to feed us. So, don't you snotty nosed little pukes start critizing me for wanting to keep what little money I make and not be forced to support lazy undisciplined brats.

Now in response to hyperbolist. I called Ms Obama Mudshell because she is as ugly as a mud fence. It has nothing to do with race. She is ugly and I made a point. Somehow that is going to make me a racist now. Am I also a racist against Ted Killer Kennedy because I stated a fact about him? How about Arlen Spectactor? Now, I want to make something PERFECLY CLEAR: I am not a racist. I have nothing against anyone who is trying their best to better themselves and their community. I don't care what color or nationality they are. Their morals and their conscience is what is important to me. Obama and his clan and cronies are the racists. They hate white middle class people unless they are on the Obama bandwagon. I repeat. I am not a racist. I call it like I see it. If you don't agree, fine. Just go ahead and keep on pushing for all the crap Obama is trying to shove down our throats.

Well, I guess I've ruffled enough feathers for one day.

Again to a lot of you commenting on Wizbang. Keep up the good work, and maybe some light will be shed upon those who refuse to see.

Thanks for letting me vent; I will be reviewing comments because it's fun - Madalyn

Nice to meet you, Madalyn.<... (Below threshold)

Nice to meet you, Madalyn.

I resent those who want to steal from me to pay for the lazy bastards that want to do no more than sit around collecting welfare whining about how awful things are for them. All the while their kids are wearing designer clothes, the babies have pierced ears with diamonds, and everyone has a cellphone.

Do you know a single person who fits this caricature? Have you ever seen a baby whose mother is on welfare wearing diamond earrings? You shouldn't believe everything you hear on the radio (or read on the internet, for that matter).

I am a cancer survivor, and I totally resent anyone making fun of someone who is dying of cancer.

I think everyone here resents anyone making fun of someone who is dying of cancer. One would hope that that would go without saying.

As for expressing your distaste with Michelle Obama's appearance: it's a strange criticism to make of a public figure, but of course you're entitled to your opinion. Might I suggest that you choose words that do not carry a racist undertone, especially if you don't intend for people to think of you as a racist? In case you weren't aware, 'mudperson' is a very derogatory label used against non-whites by white supremacists.

Have a nice day!

To Hyperbolist: I have neve... (Below threshold)

To Hyperbolist: I have never heard of the term "mudperson" before in my life. If I had known it was a derogatory name, I would never have used it. I was making a point about how all the MSM is glowing about how "beautiful" she is and she is the "classiest" First Lady we have ever had. Sorry. Jackie Kennedy is the only one in modern history who was beautiful and classy. Nancy Reagan comes in second. Michelle wears her belts up around her boobs like it is a bustier. She does not have any class as far as I am concerned. I do apologize to everyone I have offended by the name Mudshell. I can guarantee you it will never be used by me again. There was never any intention to make a racist statement. I am very sorry.

Regarding making fun of someone who is dying of cancer. How about Keith Olbermann and there was one other guy and I can't remember his name. If I do remember, I will publish it.

Now, do I know of ANYONE who is on welfare and is sporting designer clothes, Nike shoes, diamond earrings on babies, cell phones. Yes as a matter of fact I do. I was recently standing in line to pay for some items on sale at a department store. There was a woman in line who was pushing a stroller with a baby girl in it. She was holding the hand of a small boy about 3. I commented on how cute the baby was, and the mom pulled the cover back enough for me to see her more clearly. I commented on her ears because they were kind of red and looked infected. The mom actually had the nerve to tell me they had just bought diamond earrings several days earlier at a cost of over $400.00 so she could get her daughters ears pierced. I did not ask, this information was volunteered. The little boy was wearing tommy hilfiger clothes, and the mom said she gave her welfare card to a friend in exchange for the money to buy the armload of items she had at the department store. This was a hispanic woman. That is just one example. I lived in Ventura, CA for many years, and there were some people that were neighbors who were on welfare and point blank made no bones about it, they liked being on welfare and were not going to look for a job. I even offered the mom to babysit while I worked, and she said no, it would cut into the money the state was paying them,. I was PISSED. This was a white family, so don't get the idea I am saying this about a black family. I have known all races on welfare (except Asian) during my many years on earth. I have worked with or lived near many people who had relatives or friends sucking off the people who pay taxes. It is not just me. Look around.

Now, I hope I have answered all your questions. I am lucky to be alive because of the health care plan I had when I had my surgery for cancer. That is why I don't want Obama taking it away from me. I am also at an age where I don't want any government run plan telling me I don't deserve the medication or surgery because I have outlived my usefullness. That is what we will be getting with Obamas plan. Please don't dismiss what I am saying. Take a hard look at what he has said, then said he didn't say, then said it again. Don't go party-line on this. It is too important. Think about how this will affect you, your parents, your children (if the case applies). Don't listen to some jibberish just because you are a Democrat and you think you need to back a democratic president. Just think about it.

To everyone reading this bl... (Below threshold)

To everyone reading this blog: I unintentionally used a "racist" word according to some of your readers. I thought I had made up a new word that rhymed with Michelle. I did not know the word even existed. I made a hateful remark concerning Michelle Obama, and I am sorry.

When I was growing up, we were VERY poor, and the other kids made fun of me. My 1st grade teacher printed in large letters on a piece of paper the following:
THERE IS NO BODY IN THIS WORLD THAT IS ANY BETTER THAN YOU ARE. THERE IS NO BODY IN THIS WORLD THAT YOU ARE BETTER THAN. I carried that piece of paper with me all thru school. I have tried very hard to live by that rule.
So this post is to ask everyone I have offended or upset by my comment for their forgiveness.
Thank you






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