Earlier this week, McKinsey published an employer survey which found that 30 percent of businesses could drop coverage as a result of the Affordable Care Act. Republicans quickly seized on the story to further their argument that American’s won’t be able to keep the coverage they have, even though McKinsey refused to release the methodology behind their report.

Now, Greg Sargent reports that “the White House, as well as top Democrats on key House and Senate committees, have privately contacted McKinsey to ask for details on the study’s methodology. According to an Obama administration official and a source on the House Ways and Means Committee, the company refused.” Anonymous sources are also telling Brian Beutler that “the survey was not conducted using McKinsey’s typical, meticulous methodology“:

But multiple sources both within and outside the firm tell TPM the survey was not conducted using McKinsey’s typical, meticulous methodology. Indeed, the article the firm published was not intended to give the subject matter the same authoritative treatment as more thorough studies on the same topic — particularly those conducted by numerous think tanks, and the Congressional Budget Office, which came to the opposite conclusion. And that’s created a clamor within the firm at high levels to set the record straight.

“This particular survey wasn’t designed in away that would allow it to be peer review published or cited academically,” said one source familiar with the controversy. [...]

Another keyed-in source says McKinsey is unlikely to release the survey materials because “it would be damaging to them.”

Both sources disagree with the results of the survey, which was devised by consultants without particular expertise in this area, not by the firm’s health experts.

A third source speculates that the firm may have reached its outlying conclusion by basing its questions on the firm’s own advice to clients on how best to arbitrage the new reforms.

As Paul Krugman concludes, “One has to assume that there was something terribly wrong with the study. At any rate, nobody should be citing it until or unless McKinsey comes clean.”

Austin Frakt and Aaron Carroll make the important point that Sen. Joe Lieberman’s (I-CT) proposal to increase the Medicare eligibility age won’t just increase costs for seniors — it will also “harm health”:

This is not guesswork on our part; there’s clear evidence in the literature. In several papers, Michael McWilliams and colleagues found that utilization, spending, and outcomes for age-eligible Medicare beneficiaries differed for those who had been uninsured prior to turning 65 vs. those who had been insured. Their work was based on survey data, sometimes merged with Medicare claims. This is a relatively strong analytic approach since it exploits a discontinuity in coverage that potentially applies to nearly all individuals: the vast majority of the population enrolls in Medicare at age 65.

The authors found that, relative to those with insurance before age 65, those without insurance prior to Medicare eligibility spent much more money on health care after they became Medicare eligible. In other words, people wait to get care until their Medicare kicks in. This is bad both for health and for the federal government’s bottom line.

Delaying Medicare even longer would likely make this worse. People would forego care longer, health would suffer, and Medicare would pay for the consequences later.

Look:

As Frakt and Carroll point out, “If you know you need care, and it’s expensive, then you will likely try and wait until the Medicare kicks in to get it. People do this all the time; the evidence above confirms it.”

Yesterday, during an appearance on MSNBC, GOP presidential hopeful Rick Santorum argued that up until Obamacare, “seniors could go in and use much they wanted, there was no limit or no control.” “Obamacare changed that. There is now this 15 member board that’s now going to enforce caps on Medicare…there are going to be cuts in Medicare, there is going to be lines, there is going to be rationing of care.” That’s the mindset Jonathan Cohn must have been thinking of when he wrote this important post alerting Republicans to the fact that “rationing” is inevitable and exists in today’s system — the only question is who does it:

Rationing is already a fixture of our health care system. It happens every time an insurer says no to a treatment. It happens every time a doctor or hospital recommends against a procedure because it doesn’t seem worth the cost. And it happens every time somebody forgoes care because it’s too expensive. [...]

At the moment, Medicare does its rationing primarily (not exclusively) by limiting what it pays hospitals and doctors. Under the Affordable Care Act, Medicare would limit payments even more aggressively. Republicans and fellow conservative travelers regularly excoriate these efforts as “price controls” or “socialism.” This might come as a surprise to George H.W. Bush, who first applied these changes to physician reimbursement, or to the late Ronald Reagan, who first imposed them on hospitals.

Of course, the Affordable Care Act doesn’t merely direct Medicare to cut payments more aggressively. It also directs Medicare to cut payments more judiciously, by offering financial incentives to push doctors, hospitals, and other providers or producers of care to be more efficient. As I’ve written before, optimists like myself think that this mix of “payment reforms” will allow Medicare to provide medical care of the same or better quality while spending fewer taxpayer dollars.

Democrats “ration” care — to use their language — by establishing the Independent Payment Advisory Board (IPAB), a 15-member commission that would make recommendations for lowering Medicare spending to Congress if costs increase beyond a certain point. The various stakeholders in health care — drug companies, hospitals, doctors, patients (all of whom are nominated by the president and confirmed by the Senate) would recommend lowering provider reimbursement rates — they are barred from directly rationing patient care — in a transparent, public, and accountable manner. Congress would then vote on their proposal. Democrats also invest in payment reform to improve efficiency, Cohn notes.

Republicans do this differently. As Princeton economist Uwe Reindhart put it in an email to Cohn, “Republicans favor rationing by price and ability to pay, that is, by income class, through the market place. In other words, the fight is over the distributive ethic that should govern health care.” Those are the two choices; now it’s just up to the voters.

The senator who almost single handedly killed health care reform and undercut one of the most popular progressive provisions — opening up Medicare to younger people — is out with an op-ed this morning laying out five “bipartisan” ideas for reforming the Medicare program.

As you’ll recall, Sen. Joe Lieberman (I-CT) supported lowering the Medicare eligibility age before he opposed the Medicare buy-in, but now he’s now proposing raising that age to stabilize the program:

First, I will propose raising the Medicare eligibility age every year starting in 2014 by two months until it reaches 67 in 2025. [...]

Second, I will propose reforming the complex Medicare benefit structure, which is wasteful, misunderstood by nearly all Medicare enrollees and prone to over-utilization and fraud. [...].

Third, it is time to reform the premium structure. When Medicare was designed, the premiums paid by beneficiaries supported 50 percent of the program. Today they pay only 25 percent of total costs. [...] I will propose that we raise the premiums for all new enrollees in Part B (doctor’s services) and Part D (prescriptions) starting in 2014 to 35 percent of program costs.

Fourth, we need to reform the way Medigap policies work. Many studies have found that Medicare enrollees who have supplemental coverage use as much as 25 percent more services than those with only traditional Medicare coverage. [...]

Fifth, we cannot keep Medicare working for seniors by only reducing benefits or making adjustments to the premium structure. We also need to raise more revenue. I will propose that higher-income Americans pay an additional 1 percent of every dollar they earn over $250,000 to help save the program.

Lieberman argues that he doesn’t support privatizing the Medicare program like Paul Ryan proposes, but it’s worth pointing out that raising the Medicaire eligibility age would effectively force Americans between 64 and 65 years of age to purchase coverage from private insurers in the state-based exchanges (after 2014). As a recent study from the Kaiser Family Foundation points out, this would “result in an estimated net increase of $5.6 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs.” The influx of older people into the exchanges would increase premiums by 3 percent in the exchanges and Medicare Part B, the study concluded.

And the savings themselves are slim. According to the Congressional Budget Office, “this option would have little effect on the trajectory of Medicare’s long-term spending…because younger beneficiaries are healthier and thus less costly than the program’s average beneficiary.” Even if policy makers increase the age to 70 in 2043, “outlays for Medicare would rise to 7.7 percent of GDP by 2050.”

The other big problem with Lieberman’s plan — even among potentially good ideas like changing the benefit structure — is that it doesn’t try to improve the efficiency of Medicare by expanding the delivery reforms in the Affordable Care Act or reducing some of the other cost overruns in the program. That’s where some of the big savings could eventually come from and they provide a far more sustainable solution to stabilizing the program than asking beneficiaries to pay more.

Texas is joining the ranks of states like Indiana, Mississippi and Alabama in implementing key sections of the Affordable Care Act while challenging the the constitutionality of the measure. The Texas Tribune’s Emily Ramshaw is reporting that for all his anti-reform rhetoric, Gov. Rick Perry (R-TX) has given state health officials the green light toward enacting a state-based exchange — a new insurance market place established by the Affordable Care Act that will allow residents to compare and purchase insurance coverage beginning in 2014. Under the reform law, any state that does not build its own program will be required to hand over its operations to the federal government:

[O]fficials at the Texas Department of Insurance acknowledge that since last fall, with the help of a $1 million grant from the United States Department of Health and Human Services, they have been working quietly to plan for a health insurance exchange.

“We’ve been going full speed ahead on implementation, doing the due diligence so that we can be on time with what the law says,” said John Greeley, a spokesman for the agency.

Lucy Nashed, a spokeswoman for Mr. Perry, said the governor is aware of the grant, which she said is exploratory and does not require Texas to set up an exchange. While Mr. Perry prefers local solutions to Texas’ health care problems, Ms. Nashed said the governor remains hopeful the courts will overturn the federal health law. “The governor’s firm belief that Texans should be in charge of our health care programs is unchanged,” she said.

Republicans are trying to avoid greater federal interference; they can’t be running around the state saying the federal government wants to take it over and then pass on an opportunity to mold a state-based exchange that reflects their free market ideology. But there is a certain schizophrenic undertone to the states that are politically condemning the law while privately implementing it. That will bring new challenges as they work through the complex reforms and establish new consumer protections and regulations.