Retired Teachers Chapter News

Don’t let Medicare be destroyed

Dec 6, 2007 12:12 PM

It seems we no sooner wind up one battle to save what we fought for and won years ago than we have to gear up and fight off an attack on another front.

The Bush Administration’s efforts to privatize are relentless. We won the battle against its attempts to privatize Social Security only after a huge outcry from seniors, labor unions and other allies caused the administration to call a hasty retreat.

This time we are facing the ongoing privatization of Medicare that will eventually end the Medicare program as we know it and as it was intended to be. According to the National Committee to Preserve Social Security and Medicare (NCPSSM), numerous provisions of the Medicare Modernization Act of 2003 encourage the continued privatization of the Medicare program, chief among them the billions of dollars in subsidies paid to private health plans now called Medicare Advantage plans.

It all began 25 years ago when policy makers believed private insurance companies could provide better services at lower prices so the government initially paid them 5 percent less for each beneficiary they enrolled. That has been turned on its head by today’s powerful insurance lobbies. Today Medicare Advantage plans receive 12 to 19 percent more in subsidies, significantly more than it costs to cover the same beneficiaries through traditional fee-for-service Medicare. And that at a cost to the government — and to the financial stability of Medicare — of $75 billion in 2007 and $1.31 trillion over the next 10 years.

If you are one of the the 81 percent of the beneficiaries choosing to remain in traditional Medicare, it is costing you $24 a year in increased premiums to fund these excess payments to private plans because Medicare pays $1,000 more per beneficiary in the Advantage plan. Subsidies are expected to continue rising so your premiums will rise to meet those increased subsidy costs.

The advantage in Medicare Advantage plans winds up in the profit column of insurance companies instead of increased or improved benefits for beneficiaries. A recent New York Times article cited 91 audit reports of private plans that indicate “widespread violations of patients’ rights and consumer protection standards with some violations directly affecting patient health.” In addition to $770,000 in fines that Medicare imposed on 11 insurance companies for marketing violations and failure to provide timely notice to beneficiaries about changes in costs and benefits, Medicare terminated a private plan in Florida for “imminent and serious threat to its 11,000 members.”

In the meantime, President Bush continues to include deep cuts in the Medicare budget with a sizeable cut again for this year. An automatic triggering mechanism in the Medicare Modernization Act is designed to result in significant cuts in Medicare as early as 2009.

The National Committee believes, as we do, that continuing to pay private insurance companies to provide services that Medicare provides more affordably and efficiently is “unconscionable” and will ultimately “unravel the universal protection Medicare currently provides.” Eventually, it points out, Medicare’s risk pool will be shattered as those with greater health-care needs remain in the traditional program, paying increased taxes and higher premiums to subsidize the overpayments to private insurers.

To protect and maintain the purpose and independence of Medicare, both the NCPSSM and MedPAC — the Medicare Payment Advisory Commission — have recommended that instead of being paid up to 50 percent more than traditional Medicare, the playing field should be level and private plans should be paid at the same rate as traditional Medicare in every part of the country. The result would be significant reduction in Medicare spending, lower premiums and improved solvency of the Medicare hospital insurance fund.

We say “amen” to that and have passed a resolution calling on Congress “to abolish overpayments to private plans for profit and to maintain and strengthen traditional Medicare which has been a very successful program for 40 years.” The resolution further calls for Congress to “pass legislation abolishing overpayments by a veto-proof margin since President Bush has stated his intention to veto a bill calling for its abolition.”

And finally, the resolution calls for

“the United Federation of Teachers to engage with all its allies in the fight to make the public aware and Congress to take legislative action by petitions, faxes, e-mails, letters or any other form of public campaign to ensure a veto-proof legislation.”

That’s where all of us come in. It’s time for another hue and cry from all Americans to demand that this administration stop its relentless pursuit of privatization. They heard us and retreated when they went after Social Security. Now we must ready a campaign to let them hear us on Medicare. We will let you know how you can help in the battle to save Medicare.

We can’t let them destroy a program that has worked so well for so many Americans for over 40 years.