Wendell Potter’s call for Medicare supporters to wake up

Priceless safety net reaches Golden Anniversary

Medicare's impressive milestone is reason to celebrate the safety net and time for supporters to wake up to threat of increased privatization

By Wendell Potter, July 23, 2015r

Happy birthday, Medicare! Happy Golden Anniversary!

The fact that we have such a special milestone to celebrate means that the opposition of wealthy, entrenched special interests can be overcome. But, as we will see, an entirely different group of special interests is now profiting as a result of a very favorable financial arrangement with what has become an immense federal program. They are making such rapid inroads that the original Medicare program may all but cease to exist over the next decade if the program’s supporters don’t wake up to what is a real existential threat.

Public program increasingly becoming private

Republican lawmakers whose goal was to privatize the program succeeded in passing legislation to enable insurance companies to provide coverage to Medicare beneficiaries – on the government’s dime. To entice them to get in the game, the government agreed to pay them considerably more than what it would cost to provide benefits to Medicare-eligible folks if they stayed in the original program. This not only enabled the insurers to make a tidy profit, it also allowed what are now called Medicare Advantage plans to offer a drug benefit before the traditional program was authorized to do so and to cover all medical costs, not just 80 percent. In exchange, beneficiaries could only get care provided by doctors, hospitals and other facilities that were in their insurance company’s provider network.

Insurance companies have spent billions of dollars over the past few years on sales and marketing campaigns to persuade beneficiaries to enroll in or switch to their Medicare Advantage plans. They’ve been so successful that a third of Medicare beneficiaries – 16.6 million at last count – are now enrolled in Medicare Advantage plans, most of which are operated as HMOs and PPOs.

Medicare’s growing value to insurers

If Medicare Advantage enrollment trends continue – and there is no reason to believe they won’t – within a few years, possibly before the end of this decade, we will reach a tipping point in which more people will be enrolled in private plans than in the original program.

That very real possibility should be of great concern to health care reform advocates who think Americans would be much better off if all of us – not just senior citizens and the disabled – were enrolled in an improved, “Medicare for All” program.

The word “improved” in that last sentence is essential. As medical costs continue to go through the roof, the 20 percent coinsurance obligation in the traditional program will make the Medicare Advantage plans increasingly attractive. If I were leading the strategy for the “Medicare for All crowd,” I would focus a lot of attention on strengthening the traditional program to make it every bit as comprehensive and attractive as a Medicare Advantage plan.

If that doesn’t happen, Medicare’s next significant birthday will be celebrated most enthusiastically by the shareholders and executives of private insurance companies.



By Don McCanne, MD

Mark Wendell Potter’s words. If we want an improved Medicare for all, we need to focus on strengthening the traditional program “to make it every bit as comprehensive and attractive as a Medicare Advantage plan.” Yes, but even more than that.

If benefits of the traditional Medicare program, especially the deductibles and coinsurance, were even better than the Medicare Advantage plans, then there would be no reason that Medicare beneficiaries would want the restrictions of the private plans, such as limiting their choices of physicians and hospitals to the networks selected by the private plans.

For those who say that we cannot afford to improve Medicare’s benefits, they will have to explain to us why it is then acceptable to give the private Medicare Advantage plans more taxpayer funds than are spent on comparable patients in the traditional program. Aren’t those in the traditional program worthy of the same level of spending? Then we need to explain to them how we could increase benefits without increasing total spending, by putting in place the substantial efficiencies of a single payer version of an improved Medicare for all.

With the release of the Medicare Trustees report, the conversation has returned to the need to control spending. The privatizers are out with their schemes to control government spending (but not total spending). Jeb Bush says that we need to “phase out” Medicare and “move to a new system” - presumably premium support vouchers which shift costs from the government to the beneficiaries.

We need to control total health care costs, not control only government spending while allowing total costs to escalate. So let’s change the conversation from that of cutting Medicare to that of improving Medicare while making it affordable - a feat which we can accomplish only if we convert it to a single payer system.