Healthcare: Medicare Debate Reminds Us: Empowering People Is Great, but Protect Them First

Beware of magical solutions — and one-size-fits-all ideological agendas — like the idea that free markets can solve all our problems. When you think about it, it's just as silly as the idea that government can fix everything. Take the proposal by one of Washington's shining stars, Rep. Paul Ryan (R-Wis.), to reform Medicare by having recipients pick among insurance company plans rather than having basic benefits and costs set by the government.

Medicare beneficiaries will be able to choose a plan the same way members of Congress do, Ryan says in his 2012 budget proposal. It sure sounds wonderful. But the analogy between members of Congress and Medicare beneficiaries just doesn't compute. And as anyone who's had to deal with health insurance companies will tell you, the average free market Medicare beneficiary would have roughly the same chance against insurers that retail investors have trading against Goldman Sachs. But members of Congress are a lot better equipped to choose a health plan than Medicare recipients are. Congress members are surrounded by helpful staff and have ready access to experts. Most important, Congress members as a group are much more affluent than Medicare beneficiaries and don't feel compelled to pick the lowest-premium, lowest-coverage policy because they can't afford anything better.

By contrast, Medicare recipients tend to be old (the minimum age for coverage is 65) and sick (the older a group is, the sicker its members tend to be). As a group, they don't have much access to people with the time and competence to help them sort through choices. Finally, you can bet that many Medicare beneficiaries, worried about their month-to-month finances, will opt for the lowest-cost plan and hope for the best, rather than buy a higher-cost, higher-coverage plan that might better suit their circumstances. If anything goes wrong — and things tend to go wrong as you get older — they're toast.

For more, see Medicare Debate Reminds Us: Empowering People Is Great, but Protect Them First by Allan Sloan, April 14, 2011 at The Washington Post.