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Make original Medicare the foundation for health care reform

By JOHN GEYMAN and MALINDA MARKOWITZ
Guest Columnist
Seattle Post Intelligencer
Thursday, July 31, 2008

As Medicare celebrates its 43rd birthday this week, it's time to take stock of one of the most popular government programs of all time that guarantees all Americans 65 years of age and older universal coverage of comprehensive health care benefits.

At the time of its passage, American seniors were having great difficulty affording health care, especially the costs of hospitalization. They were paying 15 percent of their annual income on health care. Many millions were unable to afford either insurance or their medical bills. Enactment of Medicare gave them access to a set of benefits defined by law, as an earned right for which they contributed, without regard to their health status or income.

Medicare today covers about 43 million American seniors and the disabled, paying about one-half of their health care expenses. Amidst an increasingly unaffordable health care market, Medicare recipients have a solid rock of coverage. The program is administered with an overhead of about 3 percent, less than one-fifth the overhead of competing private programs, while offering defined benefits with free choice of physician and hospital.

A survey by the Commonwealth Fund in 2002 found that Medicare beneficiaries rate the program much higher than private health insurance in terms of quality, help with access to care and payment of their medical bills. A binding social contract has been established and kept with eligible beneficiaries that they can trust and depend on. Even at that, seniors are paying much more out of pocket now than they were in 1965 for health care -- 22 percent of their annual income.

Despite its many successes, Medicare has been under relentless attack by conservatives, market stakeholders and their lobbyists pushing to "save" Medicare by killing it. Their agenda is to siphon off more affluent seniors to private plans and shrink Medicare to a much smaller program. There is no ambiguity in this goal. As then Speaker of the House Newt Gingrich said at the time, this kind of "reform" could "solve the Medicare problem" and cause the program to "wither on the vine."

Private Medicare plans have proven themselves to be more expensive and less reliable. Despite their claims of more choice, better benefits and value, their track record is one of exploitation, made possible only by generous subsidies by the government. The original premise was that these plans would save the government money, but that soon fell by the wayside. Private insurers lobbied early and successfully for generous overpayments. Today's overpayments average about 12 percent, with the fastest growing private fee-for-service plans at 19 percent.

What do we get for this privatization boondoggle? In the late 1990s, 2.4 million seniors were forced to find new coverage, and often to change doctors, when many Medicare plus Choice plans left the market due to insufficient profits. The 2003 Medicare Prescription Drug Improvement and Modernization Act continued generous government subsidies while also prohibiting the government from negotiating bulk discounts from drug manufacturers as the VA does so effectively with discounts of about 45 percent.

The Government Accounting Office has concluded that private Medicare plans are more expensive, offer fewer benefits than claimed and are of questionable value as public policy.

All incremental efforts to control health care costs have failed over the last 30 years. There are now 75 million uninsured and underinsured, both categories which are growing rapidly with no end in sight. Access to health care for middle-class Americans is seriously threatened, and medical bills have become a leading cause of bankruptcy.

Amidst this deteriorating landscape, original Medicare stands as a shining example of a needs-based program that has consistently served the public interest. Despite being weakened by privatizing, it gives us a solid foundation for real health care reform, when access to necessary health care is even more difficult than in the 1960s.

It is time to expand Medicare as a social insurance program for all Americans through a single risk pool of all 300 million of us. This is the most efficient, fair and sustainable way to insure us all against the costs of illness and injury, coupled with the strengths of our private delivery system. Expansion and improvement is the best way to "save" Medicare.


John Geyman is professor emeritus of family medicine, University of Washington, and past president, Physicians for a National Health Program. Malinda Markowitz is co-president of the California Nurses Association/National Nurses Organizing Committee.