Yes, Medicare needs to be modified. No, the Republican plan is far from an adequate solution. And neither is managed care an adequate solution to the health care problems of non-seniors. The long-term data is far from clear that managed care will really significantly reduce the cost of health care.
A little more than a year ago, the Congressional Budget Office released a study showing that independent-practice HMOs (the most common model) saved only between 2 percent and 4 percent from standard indemnity plans without utilization review. Indemnity plans with utilization review saved 2 percent from the baseline. Only group- and staff-model HMOs saved big dollars.
The only way the Medicare (and Medicaid) problems are going to be solved long-term is with universal health insurance. And not all universal health insurance plans are created equal. There is one plan that would work for all Americans. However, for some reason, perhaps the opposition of the insurance industry, no one wants to tell the public about it. Think single-payer.
If the single-payer bill of Rep. Jim McDermott, D-Wash., were enacted, all Americans would have comprehensive coverage, including long-term care, without the need for supplemental coverage.
It would come without deductibles and with co-pays only for long-term care, and cost a fraction of what people and businesses (that offer insurance) currently pay for coverage.
Individuals would have the complete ability to select their own health care providers. There would not be the profit-motive rationing of care so common to the system of health care that is developing today.
Oh, yes, it would also save the government approximately $175 billion annually in health care costs. And the plan has been "costed-out" by the Congressional Budget Office.
Single-payer works because it squeezes inefficient administrative costs from the health care system. In Medicare today, the administrative costs (including state fiscal intermediaries) are about 4.5 percent.
According to the U.S. General Accounting Office, the administrative costs of group Medicare supplements average about 10 percent, and non-group supplements average about 20 percent. In truth, those supplement figures are more complex than they may appear. But the insurance industry has never figured how to deliver health financing with anything approaching the government's efficiency. They just keep telling
consumers to expect and to accept less.
Consumers who care should read the October issue of Consumer Reports magazine to understand the financing and other problems with HMOs. So don't blame the Democrats for demagoguing. Blame them for doing the same thing that you have done. Ignoring a plan that would work for us all.
lbert P. Cohen
The writer is a member of Maryland Health Care for All.
Pub Date: 10/12/96