Friday, December 23, 2011

Truth. What a Concept.

Everyone -- at least liberals -- is talking about Politifact's choice for "Lie of the Year." The lie -- which isn't one -- is that the Democrats continually maintain that the Ryan Budget Plan, already passed by the Republican-led House, "ends Medicare as we know it."

What does the Ryan plan do? It takes a defined benefit healthcare program, currently funded by the U.S. government, and privatizes it. Instead, seniors are given vouchers, according to need, to buy private health insurance. The amount of the voucher is not guaranteed to be sufficient to fund all of the seniors' medical needs. This is a feature, not a bug. The savings to the federal government from this plan depends on spending less -- and guaranteeing less -- on seniors' healthcare. The program will still be called Medicare and only applies to people under 55 at the time of passage, I guess. Current retirees or near-retirees will still get the same old Medicare.

What's the lie? Politifact maintains that the program is still called Medicare, still offers healthcare to seniors, and doesn't affect current seniors. Therefore, Democrats are lying when they say that it ends the current form of Medicare.

This is such an major failure in every way imaginable. The essence of this Politifact claim amounts to this: The 3 oz. Hershey's Milk Chocolate candy bar will be changing from 3 oz. to 2 oz. It will no longer have any chocolate in it. Instead, it will be made of oatmeal. The name, because it's popular and well-known, will remain Hershey's Milk Chocolate.

Of course, the reason it's completely different is that government insured healthcare and private healthcare insurance are two completely different beasts.

Here's a key point rarely emphasized: There are no current private insurance plans for seniors because everyone has Medicare! In fact, if you refuse to sign up for Medicare, you lose your Social Security. The reason for this is to keep all seniors in the same risk pool, protecting other groups from bearing any of the costs of insuring seniors. More importantly, it maintains the economies of scale such a large program can achieve.

I suppose that there are, technically, health plans that would or could cover seniors, but because no seniors buy them -- unless some really, really rich people don't want to use Medicare for some reason and are willing to forgo their Social Security checks -- there exists no risk pool that currently contains seniors other than Medicare. Does anybody actually know what will happen to health insurance rates when seniors, who have the highest risk rating because they need and use more care, are added to the risk pool???

It doesn't take a rocket scientist to figure that one out. Rates will explode, possibly influencing the rates of other younger, healthier insurance purchasers.

Like Paul Krugman, I believe this destroys Politifact's credibility and the usefulness of its project. And that's a shame because anything that brings truth to the political process is very valuable to our society indeed.

And it this same vein, while we're at it, Krugman writes today about Mitt Romney's post-truth campaign.


  1. Health insurance plans are important especially for senior citizens. I hope this project gets implemented and enable everybody to acquire major medical insurance plans.

  2. This comment has been removed by the author.

  3. Senior citizens needed the a health insurance more than anybody else. I completely agree with you that rates will explode, possibly influencing the rates of other younger, healthier insurance purchasers.

    ppi refunds

  4. Although all of use have a possibility to be in danger in a day, senior citizens probably have the highest rate. They need these insurance plans because these would be a great help when they encounter medical problems. This must be regulated properly so everything would be normal. private health insurance

  5. I just finished my medical assistant training online and one topic I had was about patient's insurance plans. I hope they would just do what is best for many people. Many patient are having troubles regarding financial aspects.