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Home Publications Blogs Beat the Press NYT Forgot to Mention That Ryan's Medicare Plan Raises Costs

NYT Forgot to Mention That Ryan's Medicare Plan Raises Costs

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Thursday, 15 December 2011 05:21

The NYT neglected to mention that the Congressional Budget Office has repeatedly found that adopting plans providing more choice within Medicare, like the one by Representative Paul Ryan and Senator Ron Wyden touted in this article, raise rather than lower the cost of providing care. The basic problem is that private insurers are very good at cherry picking patients -- better than government bureaucrats in preventing cherry picking. This means that private insurers will find ways to get patients who cost them less than the average payment, or less than the average risk-adjusted payment, for Medicare beneficiaries.

This is the reason that Medicare Advantage and its precedessor in the 90s, Medicare Plus Choice, raised the cost of Medicare. The Congressional Budget Office has also found that private insurers are less effective in controlling costs, which is why they projected that Representative Ryan's proposal for privatizing Medicare would increase the cost of providing Medicare equivalent policies by $34 trillion over the program's 75-year planning period. 

Comments (2)Add Comment
cherry picking arguments
written by frankenduf, December 15, 2011 8:17
not to mention the hypocrisy of the 'medicare reformers' who propose providing the choice for a public option for 65ers, but at the same time deny providing the choice for a public option for the rest of the citizenry, on the grounds that they dont like it one bit
Isn't it kinda Lake Wobegon to say
written by JHM, December 15, 2011 9:57
"[average -- or all] private insurers will find ways to get patients who cost them less than the average payment"?

Happy days.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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