The battle to save Medicare
Saul Friedman
Gray Matters
Newsday
June 26, 2008
Reader Jack Wajda, 69, of Orlando, a retired AT&T executive and financial planner, identifies the single greatest problem with the American health-care system as well as anyone. He writes: “To allow private for-profit insurance companies to decide whether and what type of care we receive is incomprehensible to me.”
If you’ve been reading my columns and mail in reaction to what I’ve written, that private insurers have the power to virtually run American health care is also incomprehensible to most doctors, nurses, technicians, as well as patients.
Don’t get me wrong. I have auto, homeowners and life insurance. The risk pools for these coverages are fairly predictable and we can largely depend on the insurance protection. But consider what happened on the Gulf coasts and even in parts of Long Island after recent hurricanes. Insurance was canceled or premiums raised sky high because of the slim possibility of another storm.
But one’s health should not be held hostage to the profit motive. Health is too important to be left to the insurance business. It is not like a car or a roof that can be replaced.
Yet that is how for-profit health insurance works. As long as you’re young and reasonably healthy, insurance companies are glad to take your money and cover your bumps, bruises and routine doctor visits. But if you’re really ill and your costs run into the thousands, your insurer will have second thoughts about your coverage. And if you’re elderly and more likely to suffer costly health problems, the risk pool suddenly becomes too risky for the profit-seeking health insurers.
Those costs are why the Republicans, who seek to replace Medicare with private insurance companies, took the first step toward that in 1995, with the assent of the Clinton administration, when Newt Gingrich’s Congress required Medicare to bring in private so-called Medicare HMOs. Gingrich, you recall, promised insurers that Medicare would “wither on the vine.” The HMOs bugged out on Medicare because they weren’t making sufficient profits. But they were replaced by “Medicare Plus Choice.”
Now, as Wajda correctly writes, taxpayers pay the private Medicare Advantage plans at least $9,000 a year more per patient than for traditional Medicare, with salespeople getting commissions. On top of that, the prescription benefit, Part D, has also been given to the insurance companies, which are earning high profits.
Medicare Advantage and Part D have been so confusing and corrupted by greedy sales practices and deception that even this administration has taken measures to crack down. But more important, the privatization of Medicare has come at great cost to the principles and the budget of our most popular public health-insurance program. As Judith Stein, of the Center for Medicare Advocacy, writes, private insurance is in danger of killing Medicare.
So will someone tell me why even Medicare’s well-wishers, including Sens. Barack Obama and Hillary Clinton, continue to look to the private insurers to strengthen the nation’s health-care system and cover the 47 million uninsured Americans? Both would subsidize the coverage for millions of Americans, but most of the insurance would be private. And many would not be covered. Sen. John McCain, who would slash spending for public health insurance, except for federal employees such as himself, would provide tax credits to purchase private insurance.
As columnist (and my former Newsday colleague) Marie Cocco writes, these proposals would not bring everyone into the system, and without universal coverage, the risk pool is bound to fail. Besides, patients and physicians would still be at the mercy of a profit-seeking business, with large administrative costs, bureaucrats checking and second-guessing your coverage, executive salaries, salespeople’s commissions and stockholders to satisfy.
Stein and other Medicare advocates have been lobbying to strengthen the program by canceling a potentially devastating 10 percent slash in physicians’ fee and easing the assets test to permit more of the near poor to take advantage of low-income programs. And Democratic lawmakers would pay for these changes by cutting the excessive payments to private Medicare Advantage plans.
But Mike Leavitt, the Secretary of Health and Human Services, who has been on the road telling audiences and reporters that Medicare is in financial trouble, has told Democrats that President George W. Bush will veto any bill that touches the fund for the private insurers.
As Democrats seek a Medicare bill that will pass, AARP has launched a nationwide advertising campaign to “Keep Medicare Fair.” AARP’s Andrew Nannis told me the organization favors the bill’s proposals to loosen the assets tests and cancel the physician cuts, without raising Medicare premiums. He added that AARP favors cutting the subsidies to private plans, but it’s not clear how hard their lobbyists are pushing for it. AARP’s insurer, UnitedHealthcare, is lobbying hard to retain the subsidies, which earns AARP $700 million a year in royalties.
Traditional Medicare is still the nation’s most popular health insurance, even among the young. Why not save the system with Medicare for all? Rep. John Conyers’ bill, HR 676, would cover every person for all health-care issues, and eliminate the expense of dozens of other programs, such as Medicaid, and the high overhead and profits of the private-insurance industry. The bill has 90 co-sponsors, and the support of organized labor, nurses and thousands of doctors. Take a look at the bill at thomas.loc.gov.
http://www.newsday.com/news/columnists/ny-bzsaul0627,0,4451877.column