Digging Out

With Washington paralyzed by snow this week and Congress out of session, there were few developments on the health policy front until Thursday, when The Wall Street Journal reenergized the Medicare conversation by launching a debate with itself.

The issue was whether the Federal Employees Health Benefits Program is a good model for Medicare reform. Reflecting the Journal’s well-publicized schizophrenia, the editorial page says “yes” and the Washington Bureau’s Politics and Policy page says “maybe not.”

The lead editorial, “GOP Medicare Wimp-Out?”, reports on the difficulty that Republicans are having getting control of the issue. But the paper encourages them to hold fast in “preserving the link between reform and the drug benefit” and giving seniors private plan options. (We’re providing hot links to the articles, but access requires a subscription.)

Then The Heritage Foundation’s Bob Moffit writes in a commentary on the same page that “Medicare needs far more than a facelift.” He says new retirees should be allowed to take their private health plans with them into retirement in addition to accumulated balances in health savings accounts like MSAs, flexible spending accounts, and health reimbursement arrangements.

Then correspondent Sarah Lueck writes in the news columns that the FEHBP may not be such a good model after all, since FEHBP costs have been rising faster than either private health insurance or Medicare. (Thank you, Mr. Clinton, for all of the rules and regulations that you imposed on this program. The bill is now coming due. This is a lesson for Congress: Don’t over-regulate your new program.)

Finally, the paper also reports, in “Medicare will reward HMOs treating the sickest patients,” that Boston University statistician Arlene Ash has developed a program that will allow risk adjustment for Medicare payments.

Risk-adjusted payments would encourage health plans to seek out older sicker patients as well as younger and healthier ones. This could be a huge leap forward in the debate over whether or not private plans would participate in a reformed Medicare program and treat patients fairly.

We hear that the Medicare issue has been reengaged at the highest levels of the White House and principles, principles-plus, and even a plan are still options. X.?

Head’s up: At least 16 non-profit organizations and large associations, from the U.S. Chamber of Commerce to the AFL-CIO, are planning a major push the week of March 10-16 to get attention for the importance of helping the uninsured.

Funded primarily by the Robert Wood Johnson Foundation, a week of activities is planned, including a major advertising campaign. Hundreds of grassroots events are expected around the country, from town hall meetings to health fairs that surely will generate network news coverage. You can read more here.

While the Cover the Uninsured coalition doesn’t recommend policy solutions, about half of its members support expanded government programs. This will be a great opportunity for those of us who believe in free market ideas to have our voices heard through an extra effort to produce commentaries, radio interviews, and speeches.

Grace-Marie Turner



Grace-Marie Turner is president of the Galen Institute, a public policy research organization that focuses on free-market ideas for health reform. She can be reached at P.O. Box 19080, Alexandria, VA 22320, or at galen@galen.org

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With Washington paralyzed by snow this week and Congress out of session, there were few developments on the health policy front until Thursday, when The Wall Street Journal reenergized the Medicare conversation by launching a debate with itself.

The issue was whether the Federal Employees Health Benefits Program is a good model for Medicare reform. Reflecting the Journal’s well-publicized schizophrenia, the editorial page says “yes” and the Washington Bureau’s Politics and Policy page says “maybe not.”

The lead editorial, “GOP Medicare Wimp-Out?”, reports on the difficulty that Republicans are having getting control of the issue. But the paper encourages them to hold fast in “preserving the link between reform and the drug benefit” and giving seniors private plan options. (We’re providing hot links to the articles, but access requires a subscription.)

Then The Heritage Foundation’s Bob Moffit writes in a commentary on the same page that “Medicare needs far more than a facelift.” He says new retirees should be allowed to take their private health plans with them into retirement in addition to accumulated balances in health savings accounts like MSAs, flexible spending accounts, and health reimbursement arrangements.

Then correspondent Sarah Lueck writes in the news columns that the FEHBP may not be such a good model after all, since FEHBP costs have been rising faster than either private health insurance or Medicare. (Thank you, Mr. Clinton, for all of the rules and regulations that you imposed on this program. The bill is now coming due. This is a lesson for Congress: Don’t over-regulate your new program.)

Finally, the paper also reports, in “Medicare will reward HMOs treating the sickest patients,” that Boston University statistician Arlene Ash has developed a program that will allow risk adjustment for Medicare payments.

Risk-adjusted payments would encourage health plans to seek out older sicker patients as well as younger and healthier ones. This could be a huge leap forward in the debate over whether or not private plans would participate in a reformed Medicare program and treat patients fairly.

We hear that the Medicare issue has been reengaged at the highest levels of the White House and principles, principles-plus, and even a plan are still options. X.?

Head’s up: At least 16 non-profit organizations and large associations, from the U.S. Chamber of Commerce to the AFL-CIO, are planning a major push the week of March 10-16 to get attention for the importance of helping the uninsured.

Funded primarily by the Robert Wood Johnson Foundation, a week of activities is planned, including a major advertising campaign. Hundreds of grassroots events are expected around the country, from town hall meetings to health fairs that surely will generate network news coverage. You can read more here.

While the Cover the Uninsured coalition doesn’t recommend policy solutions, about half of its members support expanded government programs. This will be a great opportunity for those of us who believe in free market ideas to have our voices heard through an extra effort to produce commentaries, radio interviews, and speeches.

Grace-Marie Turner



Grace-Marie Turner is president of the Galen Institute, a public policy research organization that focuses on free-market ideas for health reform. She can be reached at P.O. Box 19080, Alexandria, VA 22320, or at galen@galen.org

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About the author