By Karolyn Roberts
In an op-ed piece for Business Week, House Budget Committee Chairman Paul Ryan (R, WI) blames the high cost of Medicare on the fee-for-service system.
"This system leads to higher costs and lower quality for two reasons: First, the patient is disconnected from the cost... We all pay for Medicare with our tax dollars, and Medicare patients also pay premiums, but someone else pays the actual bills — and so the true cost of care is hidden. When we pay directly for something, and we know how much it costs, we have a strong incentive to demand the best value. In health care, we don't. Is it any wonder that the costs keep rising?"
There is truth in that statement, but fee-for-service is the industry and societal norm in the U.S. Anyone who uses health insurance is on a fee for service system. Those who don't have coverage are paying on a fee for service system.
Ryan's solution - let seniors pay for standard health insurance like the rest of us. To address ridiculously expensive premiums, he says "when providers are forced to compete for patients' business, they will look to lower the costs and increase the quality of their services..." Since when? United Healthcare & Kaiser Permanente don't lower their costs - in fact they increase premiums every year.
The average plan is upwards of $5000 per year for one person. Someone earning $80k per year would have trouble fitting that into the budget, much less the average senior (over 65 years of age) whose annual income is about $22,000. Forcing seniors over 65 to pay outlandish premiums for the same fee-for-service system they get using Medicare makes no sense. It will only increase poverty in that demographic, and add to even more record profits for Kaiser and Aetna, and skyrocketing bonuses to their CEO’s.