Tag Archives: Medicade


“We’ll cut hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid…” President Barack Obama’s op-ed on health care reform in the New York Times.

Brilliant! Why didn’t Presidents Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, or Bush II think of this?

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President Obama has said that his proposed public health insurance plan (let’s call it the “insurance GSE” for a government sponsored enterprise) will be competitive with private insurers because it will “negotiate” “fair” reimbursement rates with America’s doctors and hospitals. The presumption is that these rates will be lower than what private insurers pay.

Why do the President’s advisors believe a government negotiator can jawbone a significantly better deal than the hard-charging commercial insurers backed by the clout of their tens of millions of members? Without something extra on the government’s side, it’s just not a credible argument (remember the $800 toilet seats?).

The widespread fear is that the “something extra” will be health care reform legislation that allows the insurance GSE to cram down rates on providers—perhaps even the same rates Medicare underpays. As an added incentive, it could require doctors to participate in the GSE or lose the ability to treat Medicare patients.

Posted in Government vs Markets, Health Costs, Health Insurance | Tagged , , , , | 1 Comment