Medicare, as Newt Gingrich hoped it would, continues to "wither on the vine." This most popular health insurance program for older and disabled Americans is losing its life in a bitter ideological struggle between Republicans who have privatized much of Medicare and Democrats who aim to restore it as a universal public program.
Largely as a result of this struggle, which began with the Gingrich Congress in 1995 and continues today, Medicare's financial status and future are in much worse shape than Social Security. Medicare, rather than Social Security, should be a focus of the 2008 campaigns, for, as the trustees reported in 2007:
"Medicare's Hospital Insurance (HI) Trust Fund is already expected to pay out more in hospital benefits this year than it receives in taxes and other dedicated revenues. The growing annual deficit is projected to exhaust HI reserves in 2019. ... The Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the new prescription drug benefit will continue to require general revenue financing."
Signs of trouble for Medicare and its 43 million beneficiaries are everywhere. Part B premiums, up to $96.40 a month this year, will reach $100 soon, and premiums will be much more for higher-income members, who will have good reason to quit Medicare. Co-pays, deductibles and the cost of Medigap or your supplemental policies are also rising, with no end in sight.
The private Part D drug insurance is up, too. So the beneficiary pays a premium plus the deductible, $275, plus 25 percent of the cost of drugs up to $2,510 (and drug prices have risen), as well as 100 percent of costs in the ever-enlarging doughnut hole, between $2,511 and $5,726. It can be at least $3,000 out of pocket.
In short, much of Medicare has become private insurance with all the complications and price increases. Aside from the privatized Part D, more than 20 percent of beneficiaries have left Medicare for Medicare Advantage, the euphemism for private insurance such as an HMO.
These plans, which are growing, are sapping not only members from original Medicare, but money.
Congressional Budget Office director Peter Orszag warned that the growth of Medicare Advantage could bring about "a fundamental change in the nature of the Medicare system that may be hard to reverse."
Changing the nature of the system may be a reason the Republican bean-counters, when they were in charge of Congress, planned a 10.1 percent cut this year in the already penurious physician fees, with further cuts of 5 percent in each of the next five years.
As a result, most ominously for Medicare, beneficiaries such as Philip Wood from the Dallas area: After his doctor moved, he and his wife have been unable to find a new one who accepts Medicare. Similar reports are seeping out of Texas, Colorado and Ohio. Even patients with Medicare Advantage find their doctors have dropped out of the network.
An American Medical Association poll has found that, if the fee cuts are not rescinded, 60 percent of physicians will stop taking new Medicare patients. Already 25 percent of Medicare patients report problems finding a new primary care doctor. Cuts were opposed by most advocacy groups, including AARP, and the professionals of the Medical Payment Advisory Commission, which advises Congress.
The American Medical Association came late in supporting Medicare. Now more than 90 percent of nonpediatric physicians accept it. AMA board chairman Cecil Wilson, a physician, asked the nation's seniors "to join us in calling for legislation to help avert an access to care crisis for Medicare patients.
The battle has raged during the past weeks, as Democrats in Congress have sought to suspend or rescind the cuts in physician fees, which could be paid for by cutting the $54 billion subsidy for the Medicare Advantage plans.
But Republicans, who favor privatization, have blocked action in the Senate.
As it turned out, the 10 percent cut was delayed for six months.
A further complication has been efforts by Democrats, with some Republican help, to increase funding for the popular State Children's Health Insurance Program as part of the broader Medicare-health care bill. It would have increased the aid to children without health insurance. But the president has twice vetoed the bill for ideological reasons (he is opposed to more government health insurance) and because it would be paid with increased tobacco taxes. So the current authorization was extended for six months.
Buried in the Democrats' package of Medicare changes are other proposed reforms designed to help Medicare's finances, including giving it the ability to negotiate for lower prices from drug companies. Democrats also are taking aim at an obscure provision of the 2003 Medicare Modernization act, which requires that 45 percent of Medicare Part B's cost must be paid for with patient premiums. Thus, premiums have risen each year while lawmakers have shortchanged Medicare on appropriations from the general fund.
Whether any of these Democratic reforms can pass Congress and withstand a veto, it's almost certain Medicare will play a large role in the health care debate in the presidential campaign.
Many voters did not notice when the Republican platform in 2000 called Medicare a "dinosaur" that needed to be tossed out onto the free market. President George W. Bush has built on that promise and Gingrich's pledge, with private insurance in Part D and in Medicare Advantage.
The 2008 campaign will test whether original Medicare will endure or become a market-based insurance program.
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