Jacob Hacker claims that his reform proposal, called “Health Care For America,” “promises better care, lower costs, more choice, healthier citizens, and immensely stronger guarantees for workers and their families.” (Italics mine).
In the next paragraph, he states,
What Health Care for America would do is simple: every legal resident of the United States who lacks access to Medicare or good workplace coverage would be able to buy into the “Health Care for America Plan,” a new public insurance pool modeled after Medicare. This new program would team up with Medicare to bargain for lower prices and upgrade the quality of care so that every enrollee would have access to either an affordable Medicare-like plan with free choice of providers or to a selection of comprehensive private plans.
First, Medicare does not “bargain.” It sets prices through a formula; if a doctor or other health care provider doesn’t like the Medicare price, then Medicare will not reimburse him. Generally, the price that Medicare pays is lower than what private insurance companies pay.
Despite that, premiums for Medicare for Part B have, in recent years, grown much faster than the rate of inflation. Here are the years and the rate increases: 2001-9.9%; 2002-8%; 2003-8.7%; 2004-12.4%; 2005-18.5%; 2006-13.3%. In 2007 the rate increase is going to be lower, 5.6%. Yet that is due in part to the fact for the first time, Part B will require wealthier seniors to pay higher premiums, thereby subsidizing the premium costs for non-wealthy seniors. It won’t be possible to do that under Hacker’s plan because under his plan the wealthy will be able to stay with private insurance.
I just wish once that when someone on the left decided to model health care reform on Medicare, he would look at how Medicare has fared at keeping costs down in recent years before saying his reform will “cost less.”