The so-called reform of Medicare will be the death of Medicare. Last week, Congress approved a bill to reform prescription drug coverage under Medicare, on sharply divided partisan lines. In the case of Wisconsin, both Senators Feingold (D) and Kohl (D) voted against the bill. In the House, the vote was split nay/yea between Wisconsin Democrats and Republicans.
Medicare is a legacy of the Great Society initiatives of former President Johnson. It is a voluntary program that provides assistance for many seniors and disabled Americans who are unable to purchase private health care coverage.
Medicare is in urgent need of attention. The premiums beneficiaries must pay are rising each year even as a gap is rising between the amount Medicare will cover for drug costs and the amount beneficiaries must pay out of pocket. As of 2000, the program cost the government $224 billion. And once the Baby Boom generation enters the system, it will endure a financial strain well beyond its resources, saddling our generation with rampant debt. But the current bill is not the path to successful reform.
The privatization process requires that private insurers, and not the government, provide prescription drug benefits. The insurers will be allowed to charge premiums for drug benefits, and Medicare would be prevented from directly providing drug coverage. By 2010, commercial health plans will be allowed to compete directly with Medicare by selling insurance alternatives to the benefits the program provides.
Proponents hope lower premiums and better benefits will encourage Americans to leave Medicare in favor of commercial carriers. But private insurers will only take the healthiest people, who would cost them less money. The sickest and oldest will be stuck in a hobbled Medicare and required to pay ever-increasing premiums, since less funding will be given to the program.
The new bill calls for a cap on what the federal government can spend on Medicare — ostensibly in the name of sound fiscal management. However, the cap provisions require the program’s trustees to declare Medicare insolvent if federal spending exceeds 45 percent of program expenses (which, of course, are rising even now).
Defining insolvency arbitrarily works to the right’s advantage, since they hope that an inevitable budget crisis will provide them with the political capital necessary to push through an even more ambitious program of reducing benefits and calling for more cost sharing. Congressional Republicans could never actually reduce benefits or hike premiums, since the existing Medicare legislation contains extensive protections against exactly that. Instead, they hope to kill Medicare by starving the program to death.
The paltry drug coverage authorized in the bill does nothing to address the growing coverage gap. The average recipient spends $2,300 (beyond what Medicare will cover) on drug prescriptions annually. By 2007, that cost will rise to $2,900 even with the new coverage allotted by the bill. Drug costs will continue to escalate, as Congress refuses to place any price controls on pharmaceuticals. Since the maximum allowable income for coverage will be lowered, fewer Americans (as many as 3 million) will be eligible for help from Medicare in buying prescription drugs. Sen. Feingold estimates that under this bill, 60,000 Wisconsin retirees stand to lose their health insurance, and 110,000 Wisconsinites will face increased, not decreased, payments for prescription drugs.
Republicans tout the support of the AARP for the bill. But the AARP had much to lose, including its tax-exempt status and the goodwill of the Republican Party. As early as 1995, when Republicans were already seeking allies for reducing Medicare’s budget footprint, Sen. Alan Simpson of Wyoming, who was investigating the tax exemption, told the AARP that “the intensity of my investigation will be directly related to your fight on Medicare.” Besides, the AARP stands to benefit handsomely from the new law, as it would see an increase in the royalties it receives for insurance marketed under its name.
Ultimately, this new bill is about splintering society in the interests of the insurance and pharmaceutical industries. The promise and the appeal of Medicare is that it provides for lower income as well as middle class Americans. It is part of the system of government guarantees first created under the New Deal and reinvigorated during the Great Society era — guarantees that we all now regard as a birthright, such as Social Security Insurance. But by denying it adequate funding, Congressional Republicans hope to replace Medicare with a wholly privatized insurance system that would leave the sickest and oldest Americans out in the cold.
The extreme right’s ideology of slashing public assistance programs and forcing those who are unable to provide for themselves out of the system shows us how much America has changed since 1963, when President Kennedy told Congress that “a society’s quality and durability can be best measured by the respect and care given its elderly citizens.”
Rob Hunter ([email protected]) is a junior majoring in political science and philosophy.
