Newt Gingrich’s Plan to Bankrupt Medicare

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So what would Newt Gingrich do to rein in Medicare costs? Today he told Ben Domenech that he likes the idea of premium support — that is, giving seniors a lump sum and having them buy private insurance — but he also likes the idea of making it voluntary:

And then I would go to the insurance industry and say to them, is there a way you could make a premium support option really desirable? Well, it turns out Medicare Advantage has 25% of the market despite the opposition of the bureaucracy. So, if you had a bureaucracy that favored market oriented systems, you might actually get to 50% much faster than you think.

God help us. Here’s the problem: Medicare Advantage costs more than traditional Medicare. A recent study suggests that in 2009 (the most recent year available) it added 3.5% to the total cost of Medicare. That’s about $17 billion. If Gingrich’s enthusiastic bureaucracy managed to double the number of seniors choosing Medicare Advantage, it would cost us an extra $35 billion per year.

And what do we get for that money? A research report by Austin Frakt and others estimates that only about 14 cents out of each dollar goes for additional services. So under Gingrich’s plan, Medicare costs would go up by $35 billion, and of that, about $30 billion would be wasted.

I’d like to say that this is just typical Newt, shooting off his mouth about some clever idea without really thinking it through. But it’s not. It’s part of the continuing conservative infatuation with Medicare Advantage, something that’s nothing short of breathtaking considering its gruesome record so far. Then again, maybe it’s not so breathtaking. After all, $30 billion in waste to you and me is $30 billion in extra profit to the insurance industry. That’s who Newt wants to ask for advice, and as far as they’re concerned, Medicare Advantage is already really desirable.

If you want to rein in the growth of Medicare, you’ll have to look elsewhere. Premium support models that incorporate competitive bidding might help keep costs down a little bit, but Medicare Advantage won’t. It just makes the problem worse — and doubling it will only make a big problem twice as bad.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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