A new Medicare debate

A new Medicare debate

May 27th, 2011 in Opinion Times

Democrat Kathy Hochul's surprising victory Wednesday in a special election in a heavily Republican congressional district in upstate New York turned mainly on the victor's opposition to the Republican House plan to slash and privatize Medicare. Now, national Democratic leaders seem to believe Hochul's campaign paves a path for 2012 to win back some of the seats they lost in the last election. But as bad as the House plan is, Democrats would do themselves, and the nation, a disservice to use that election as a model for trying to turn the tables on Republicans in the 2012 elections.

The Republicans' slash-and-burn plan, sponsored by House Budget Committee chairman Paul Ryan and passed enthusiastically by the overwhelming Republican majority in the House, isn't the right medicine to cure what ails Medicare. But Medicare clearly needs an overhaul.

Under current estimates, the program's $544 billion annual cost will rise by 80 percent by 2019; that's unaffordable, and reforms must be made. But it will take a bipartisan approach to fix it. That can't happen without both sides agreeing to quit demonizing the other over proposals to change the health care system.

A poisoned well

That hardly sounds possible at the moment, of course. The grenades lobbed by Republicans against health care reform and rational Medicare improvements over the past two years have virtually poisoned the well for a nonpartisan discussion of the myriad details of health care reform generally, and Medicare specifically.

The general health reform bill itself - the Affordable Care Act - already constitutes a considerable cost-efficiency path to health care for Americans of all ages, but Republicans are still committed to repealing it. They repeatedly used the bogus claim of "death panels," for example, to undermine reform, spreading a bald-faced lie about a single provision that would simply allow payments to doctors for taking the time to discuss end-of-life care with patients who voluntarily requested such discussions - a common request given the fear of a terminal disease.

Fixed obstacles

Republicans similarly trashed the Obama administration's effort to reduce the Medicare budget by $500 billion through 2019, in part, by holding down the inflation factor in provider reimbursements, and in part by ending needless government subsidies that Republicans authorized in 2003 to for-profit health insurers to induce them to offer generous Medicare Advantage plans that would draw seniors out of Medicare-proper.

Republicans built those subsidies into their industry-friendly 2003 Medicare "modernization" act, which also created a needlessly costly plan for its centerpiece, the prescription drug benefit. The Bush administration and the Republican-controlled Congress in 2003 added to the federal debt by deliberately refusingto provide financing for that benefit, even as they gratuitously rolled in the wasteful subsidies to Advantage program insurers - subsidies that were subtracted from the core Medicare budget itself.

Worse, they turned the drug benefit over to the for-profit pharmaceutical industry, which already charges Americans two to three times more than they charge for their prescription drugs in every other advanced country. In addition to that, the Republican bill officially banned Medicare - in the legal terms of the 2003 act - from administering the prescription drug plan, and also from using the program's huge purchasing clout to bargain with pharmaceutical companies for the for the best prescription drug prices for Medicare enrollees.

So now that Republicans have figured out that Medicare is getting too expensive, they want to end the entitlement for Americans under 55, and convert the program into a voucher plan - rather by backing down from their fixed positions on Medicare policies.

Another GOP gift to insurers

Their voucher plan would provide an annual subsidy, i.e., $10,000, with which future seniors would use to help pay for a private insurance policy with a for-profit insurer in retirement, another benefit to the for-profit insurance industry. The Congressional Budget Office analysis says the voucher would initially leave seniors paying $6,500 out of pocket for a policy, and progressively more if health care costs continued to rise at two to three times the general consumer inflation rate.

If reform is repealed, general health care inflation would continue at its current unsustainable rate. The Ryan plan, moreover, would eliminate seniors' clout to coalesce and bargain as a Medicare group for a better rate.

The reform option

If Republicans would agree that the Affordable Care Act should remain in place, they could help fortify its other provisions to create efficacy-based care standards for Medicare-approved reimbursements, and a host of general industry efficiences. They could also help wean the excessively costly American health care system from a fee-for-service model to a health-maintenance model. And they could allow use of Medicare's purchasing clout for prescription drug benefits.

The health care industry and Big Pharma, of course, would continue to campaign vigorously against such reforms, which would cut their price-gouging profits and excessive over-use of fee-for-service procedures. But with bipartisan agreement on just and cost-efficient reforms, Medicare, and general health care, could be made affordable. Republicans just have to decide which side they're on: that of ordinary Americans, or the profit-gouging health care industry's lobbyists.