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!) 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.

Obama: Government Health Care will be like...the Post Office
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