Regarding the broader future of Medicare, Gruber agreed that any plan shifting the majority of the program's beneficiaries out of the government-run Medicare program and onto private plans would “end Medicare as we know it,” a phrase Obama and his surrogates have often repeated on the trail.
“It does. I don’t think it’s a lie,” Gruber said. “In theory, [premium support] is not wrong. In practice it’s not ready yet.”
There are three key problems that still must be worked out, Gruber said. First, policymakers have to figure out how to keep insurance companies from cherry-picking healthy people and essentially forcing the sickest patients on to traditional Medicare, which would drain the program of money. Second, policymakers must find a way to make sure insurance companies design benefits so they are easy-to-understand for beneficiaries, and don’t trick seniors into buying more expensive plans that aren’t suitable for them. Third, they have to figure out just how quickly government checks for seniors to buy coverage could grow.
Still, Gruber said he could see Medicare becoming a premium-support-style plan within a five-year timetable, after the Affordable Care Act’s health insurance exchanges start enrolling an estimated 30 million people into insurance plans in 2014.
“In the first few years of the insurance exchanges we will learn a lot,” Gruber said.
Of course, anything five years away would require action in the upcoming presidential term, whether it belongs to Obama or Romney. It is unclear if Obama would be willing to approach any premium-support-style plan for Medicare — even if it meets the caveats his external advisers have now laid out. The Obama campaign did not return repeated requests for comment.
The Cutler and Gruber e-mails must be considered in the context of the challenge of securing support for long-term deficit-reduction measures. In any serious effort to rein in deficits, health care costs, mainly through Medicare, are the albatross that neither party can get off its neck. The Democrats’ health care law contains dozens of pilot programs and billions of dollars to test new ways to reduce health care costs by restructuring how hospitals and doctors are paid. But it isn’t enough to change the deficit outlook now. So it makes sense to test every theory you can.
Meanwhile, Cutler continues to warn that the Romney-Ryan Medicare plan would be catastrophic for seniors.
“Mitt Romney — like his counterparts on the campaign trail and Paul Ryan — would end Medicare as we know it, turning it into a voucher program,” Cutler wrote in March memo for the Obama campaign.
“Some Republican plans, including Romney’s, offer traditional Medicare as an option for seniors. But whether the plans force new retirees out of traditional Medicare immediately or steadily raise its cost over time, the result in the same.”
That public statement does not jibe with Cutler’s 2010 private e-mail, which proposed having the executive-branch Medicare board simply move seniors into exchanges to buy their own coverage, where traditional Medicare would not be an option. Cutler says he criticized the Romney-Ryan plan because the way they are designed will “bleed out traditional Medicare.”
“Nowhere in the campaign memo do I say that private plans are a bad idea for Medicare,” Cutler said in an e-mail to National Journal. “Indeed, my recent JAMA paper explicitly says that such plans could be more efficient than traditional Medicare — though the case is not completely clear.”
But Cutler’s JAMA article ultimately concludes that premium support plans “may offer” a solution for Medicare, if the Democrats' health care law fails to slow health care costs.
He attributes the differences in his 2010 e-mail and what he says now for the campaign and in public articles to “trying to explain health care economics to people who are not economists or health care specialists.”
“I agree, people should read my articles and books. But if they don’t, I need to communicate in pieces,” Cutler wrote.