INTERESTING STUFF: (Feline Edition) – 10 December 2010
ELDER MUSIC: Michael Martin Murphey

GRAY MATTERS: Potential Medicare Dangers

SaulFriedman75x75 Pulitzer Prize-winning journalist Saul Friedman (bio) writes the weekly Gray Matters column which appears here each Saturday. Links to past Gray Matters columns can be found here. Saul's Reflections column, in which he comments on news, politics and social issues from his perspective as one of the younger members of the greatest generation, also appears at Time Goes By twice each month.


Before Gray Matters leaves the dismal subject of President Obama’s misbegotten Frankenstein monster, the deficit reduction commission, there is one tiny sliver of decent news from its lone genuine liberal, Illinois Representative Jan Schakowsky.

In one of her many television interviews, she noted that the information that the members of the commission had at last come to terms with the fact that Social Security’s pension insurance system, which is self-supporting with payroll taxes and minimal administrative costs does not, repeat, not add to the deficit.

Therefore, she said their “proposed reforms,” like slowly raising the retirement age, are meant only to stabilize its finances for the next 75 years. We now know that nothing so drastic as cutting benefits, which is what raising the retirement age will do, is simply not necessary, as Obama has said.

But alas, our unpredictable president, of questionable principles, as Time Goes By as demonstrated on the past few posts, has done his damnedest – with the suspension of the payroll taxes – to make life more difficult than it needs to be for Social Security.

But that’s not what I wanted to draw from Schakowsky’s observation. Her fear is not for the long term future of Social Security, but the more immediate dangers for the 47 million of us who depend on Medicare.

It is true that the Affordable Care Act strengthened Medicare’s Part A trust fund, and that cutting the subsidy for Medicare Advantage has helped the finances and the fortunes of Part B. But except for Schakowsky, virtually every member of the commission is about to pounce on Medicare because health care – but not necessarily Medicare - is the largest and fastest growing target for cutting the deficit.

Never mind that our for-profit health care system is filled with greed and corruption and is a drag on Medicare.

But its advocates are being heard. As I mentioned last time, a coalition of liberal economists in a Citizens Commission, including former Labor Secretary Robert Reich, economist Dean Baker and, this time, joined by separate statements from AARP, have protested strongly that the problem is not Medicare.

As the Citizens Commission wrote,

“Alarming long-term projections of growing debt almost completely come from uncontrolled growth in health care costs. We do not have an entitlement crisis; we have an unaffordable health care system.”

Nevertheless, the key members of the deficit commission, with nods of approval so far from its creator, the president, would pick on what Obama’s co-chairman, Alan Simpson, called the “lesser people” for the unkindest cuts.

Even the mildest medicine, proposed by Simpson and his buddy, former Clinton aide Erskine Bowles, would put a cap on and stunt the growth of Medicare even though other health costs are mostly responsible for that growth. In addition, as I wrote, the eligibility age for Medicare – for your children – would rise to 68.

Your expensive Medigap policy will be worth less: Bowles-Simpson would exclude the first $500 of coverage and limit coverage to 50 percent of the next $5,000.

Your annual out of pocket costs could rise to $7,500.

And, as I mentioned, the experiment for getting the feds into long term care, called CLASS, proposed by a dying Ted Kennedy, would be abandoned. From Bowles-Simpson, the gutting of original Medicare goes from bad to worse.

Former Clinton Budget Director Alice Rivlin and former Senator Pete Domenici would raise the already onerous 20 percent co-insurance for Part B to 35 percent.

And starting in 2018, their plan would substitute the present system - the government pays the bills - with a “premium support” system in which the beneficiary would get a certain amount of money to shop for his/her coverage.

Can you imagine going from the current system, which is confusing enough, to one in which beneficiaries, including the oldest men and women living in nursing homes, must shop each year for private insurance? Who would regulate the insurers?

Even worse, Rivlin and her new ally, right-wing ideologue Representative Paul Ryan [R-Wis], would completely privatize what most Americans consider the best health insurance they can get.

What makes this a dangerous possibility is the fact that Ryan will become chairman of the House Budget Committee. Under his market-oriented proposal, we would take the system that accounts for most of the present problem and make it worse.

Starting in 2021, people who turn 65 will receive vouchers to buy private insurance through a new Medicare Exchange. Vouchers would be worth $11,000 (surely that will be enough to treat a cancer), although adjustment may be made depending on the illness.

Of course, it will be up to the sick or dying beneficiary to argue his/her case with the insurer.

“I don’t think there’s any question that there’s intensifying pressure to control Medicare costs and that pressure is going to intensify more over time when you look at the deficit and you see that really Social Security is a minor contributor. It’s mainly health care,” said Jonathan Oberlander, professor of social medicine at the University of North Carolina. “Medicare has long been about budget politics.”

While Medicare makes a tempting target for cuts, John Rother, AARP’s executive vice president said,

“The burden of Medicare’s out of pocket costs is already very high, to the point where many people are literally having to choose between the necessities of life and health care. I don’t think it’s possible or advisable to further load people of modest incomes with very high health care costs.”

Rother has signaled that AARP, which successfully fought off the 1995 Bush administration effort to privatize Social Security, will be even more militant on Medicare’s behalf.

As important, the American Medical Association, has become a strong Medicare defender, especially since the Congress last week stopped for a year the pending 23 percent cut in the program’s payment for doctors. The year is expected to give lawmakers time to rewrite the formula for setting the fees.

Tricia Neuman, director of the Kaiser Family Foundation’s Medicare Policy Project, decries the premium support and voucher proposals and says the Affordable Care Act can help keep Medicare costs down.

Recently, the Department of Health and Human Services began writing regulations for an important part of the new law, called the Medical Loss Ratio, requiring insurers to spend 80 to 85 percent of health care premiums on actual health care rather than executive salaries and other administrative costs.

Getting back to Ms. Schakowksy, she had only one Medicare reform to propose that would require Medicare to scrap Part D and establish a Medicare drug plan and that Medicare be required to negotiate prices with drug companies.

Since the deficit commission seems to agree that the present system is flawed and too costly, I’d go one step further and propose what Obama used to favor, Medicare for All. But that was before he lost whatever it is that he once believed.

Contact saulfriedman@comcast.net

Comments

Two points going forward re healthcare:

1) Before they do anything else about Medicare, they should have to allow drug importation. I paid $2.57 for a week's course of an antibiotic in Kathmandu; I paid a $25 copay and the insurance co. paid god knows what for a similar antibiotic last week here. There is no difference between Indian generics and US pharmaceuticals except the pharma profit margins. Drug importation, even from as close as Canada, is popular and a "free market" solution. Let us do it!

2) The present Great Recession masks this, but state experiments are the next battleground for progress on getting a better health care system. Vermont wants to create single payer. California (and we're BIG) is not far behind. If a few places can do it, the for-profit system crumbles. That's how Canada got their system.

Amen, Jan! I remember thinking how bitterly ironic it seemed to me that a Republican president was blocking a free market from working, when G (W?) Bush made it illegal to buy Rx drugs from Canada.

The whole thing spells disaster for poverty level elders like me. Republicans hate poor people and, obviously, so does Obama. Neither wants my vote.

While I pretty much dismiss, the dire predictions for Social Security -- one analyst told me that it may not even be necessary to raise the payroll tax cap -- Medicare is another matter. The combination of a growing population of elders supported by a proportionally smaller population of workers, a truly perverse system of compensation, and the compounding of rising health care costs financed by flat growth in income has endangered both Medicare and the general economy.

The eventual solution -- and we'll reach it one way or another -- is to roll our fragmented system (Medicare, Medicaid, employer insured, self-uninsured, uninsured) into a single program of universal coverage.

Unless a mass movement develops to support it, I don't see single payer happening in this country. That will leave vouchers, universal insurance, or punting to the states. There's already a short-sighted lawsuit in the works which, if it wins, will take universal insurance off the table (because it requires mandates).

Vouchers/HSA's (so-called Consumer Driven Health Care) are a bad answer for many reasons, and I doubt that the states are up to the job. For sure, I'd rather be old in New England than the Deep South (except for the weather!).

Other things are necessary to bring down the costs of health care: Concentrated and coordinated federal, state, and community efforts to reduce the effects of the chronic diseases that afflict everyone but elders in particular; reduction the obesity rate, increasing the number of primary care physicians, and increasing our commitment to public health.

Society can't afford old people care like they use to. We have big problems here. They are trying to limit or ration the big hospital bills. Obama made it pretty clear when he spoke of him mother's surgery, a joint replacement was it, soon before she died; More or less implying it was a waste of money? Didn't he? That's where all this is heading, not to mention that the small stuff, like pills, is getting more expensive. Young people hardly go to the Dr. office; You ever notice how many of us old people fill waiting rooms? It's going to be very costly to keep us alive as long and in a fashion to our liking from here on out.

The thing about Medicare is that it's there for everyone when they turn 65 if they're part of the Social Security system, available for purchase if not, no medical questions, no problems getting it. And then a Medicare supplement is available at the same time.

Until Medicare Part C and D, that is, when things got more complicated. Now seniors must navigate through a particularly complicated system, because of the private insurance companies involvement. Drugs become more expensive because Congress wanted to protect the drug companies from losing their cash cow - the American seniors.

The logical process would have been to make Medicare Part D part of traditional Medicare, similar to the VA's prescription drug program, with negotiated prices.

Instead of moving in that direction, Congress and the President seem to be going the other way, toward more complication. As we age, we are less likely to be able to negotiate a complicated system, nor do we want to. We want security and stability.

A while back Ronni posted an annual comparison of medical procedures in developed countries, and the US was in some cases an order of magnitude more expensive.

That won't change until doctors are on reasonable salaries instead of fee-for-service and medical schools don't impoverish future physicians and hospitals don't seek bigger profits, meaning it will never change.

As everyone who reads this blog knows, the system is rotten to the core because it is based on greed. An entire industry is allowed to profit from people's illness, and the industry's enablers (too many to list here) are allowed literally to ruin people if they get sick.

I recently observed an 89-year-old woman who was plowing through the annual Medicare enrollment period, and the whole thing just made be so dang mad. Hasn't an 89-year-old earned the right not to have to endure such stress? Not in the USA.

And I am truly sorry to say I don't see that ever changing except for the worse. I could weep.

Oops -- I forgot to mention the evilest of them all, for-profit insurance companies whose quest to limit "loss events" in order to max out profits for capitalist investors means they must deny medical services.

I think Lee Anderson is right on, except for the very last statement. It is not hopeless. When enough people decide that greed is the problem, we can get together and decide to enhance the human condition and not balance sheets.

Lee, if that doesn't happen, I will weep with you.

I think Scrooge had it right...lets just decrease the "old" population - surplus - especially once they have used up their assets because - you can make up the rest...the whole thing is awful and trying to keep it all together is just too much.

Great post thanks for sharing

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