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should? But may not?

The money has to come from somewhere. FedGov has done little to prove they are capable of reducing true costs and still little else to reduce claims.

Isn't part of the right's complaint about Medicare and Medicaid that they won't pay as much as the private market for reimbursement?

As to where the money can come from, just to give a concrete example of how it doesn't have to be a zero sum game:

Strategic Formulary Design in Medicare Part D Plans

What the study did essentially was show that a fix in the benefit structure of a part of Medicare could save up to 475 million a year.

They did this by looking at past studies of consumer behavior and their own analysis with an eye on the Medicare stand alone drug plan. Which they mark as the culprit of 475 million in yearly extra costs.

On the one hand you could look at that and say "see, government is shite!"

But part of how they came to this conclusion is by comparing it with Medicare Advantage. What is different that they do(and other policies do), is they are comprehensive and connected(Advantage that is), unlike the stand alone drug plans many elderly people choose that are just focused on drugs, Advantage includes those interconnected aspects of healthcare.

People like the drug plan over Advantage plans because it has low premiums. The catch is it has high out of pocket expenses that completely offset the lower premiums. But people are people and so we gravitate to the easy to digest lower premiums.

When costs increase on drugs people spend less, so people that end up on the stand alone plan tend to consume less drugs...Including the ones they need to be taking.

In a vacuum maybe on the government side of the ledger that is good.

But what that has led to is more people in the hospital or sick because they didn't take their medicine as prescribed, in order to save on out-of-pocket expenses. And they can do this by comparing the two programs.

Since the drug plan is not connected to hospital visits and treatment, the drug plan has no incentive and no signal that their behavior is driving up costs elsewhere and would be better off changing the structure so people would take their meds and reduce the more expensive cost of hospitalization and treatment for failing to do so.

Combine that with Medicare negotiating drug prices and you have a nice cocktail of some pretty meaningful savings. That doesn't involve the usual framing of "raise everyones taxes."

This post was edited on 5/8/17 at 5:02 pm