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Reclaiming Medicare
June 7, 2007 • Volume 7, Issue 23

Medicare was created because, in the mid-20th century, older Americans faced a health care crisis. The Social Security system—created as an economic safety net for older Americans—was failing to protect them against the greatest single cause of economic dependency in old age: the high cost of medical care.

The 1950 census showed that the aged population had grown from 3 million in 1900 to 12 million in 1950, or from 4 to 8 percent of the U.S. population. Two-thirds of older Americans had incomes of less than $1,000 annually, and only 1 in 8 had health insurance.

Private insurers had long considered this illness-prone population a "bad risk," and even unions were generally unable to purchase coverage for retirees through employer-sponsored plans.

In July 1965, President Johnson signed into law the bill that established Medicare, a social insurance program designed to

Since its inception, Medicare has successfully provided health security to generations of Americans who could not get it elsewhere, guaranteeing reliable access to virtually all medically reasonable and necessary health care services. Medicare has proven that good government can create good public programs.

For that very reason Medicare has become the punching bag for ideologues who ignore the program’s proven track record and the very reason for its creation: the failure of a private insurance market to offer secure health coverage to older Americans.

Rising health care costs affecting both Medicare and private insurance, the imminent retirement of the “baby boom” generation and a desire to improve coordination of care have prompted discussions about how to ensure that Medicare continues to be available to future generation of Americans.

For some in Congress and the administration, these real challenges serve as a pretext to attack the fundamental structure of Medicare and undermine the guarantee of health coverage that Medicare provides to older Americans and people with disabilities.

These attacks began with the addition of private health plans to the Medicare program (now called the Medicare Advantage plans) and have culminated in the passing of the Medicare Modernization Act (MMA), the 2003 law that made prescription drug coverage available to people with Medicare.

The MMA contained several attacks on the fundamental structure of Medicare, including creating the first Medicare benefit that is not available from the Original Medicare program (drug coverage) and giving larger subsidies to private health plans.

Congress is now debating whether to level the playing field between private health plans and the Original Medicare program by ending the overpayments the administration makes to private Medicare plans. If Congress does not act, taxpayers will pay private insurance plans $65 billion more over the next five years than it would cost them if those individuals were covered by the government-run Original Medicare program.

Stay tuned over the coming weeks and be ready to take action to help ensure your senators and representatives will stand up for Medicare, taxpayers and fiscal responsibility.

Medical Record

“A war against Medicare had been developing for years, with the goals of replacing it totally with private insurance and discrediting the social insurance concept. Enactment of the Medicare Modernization Act of 2003 (MMA) was a victory for privatizers in the first major battle of that war. It virtually embodies a master plan for the war. The MMA undermines the health insurance program that senior citizens and people with long-term disabilities have relied on for many years. It strips away protections that people with Medicare continue to need. Moreover, as described below, if MMA’s provisions are allowed to remain in force, they will continue to erode traditional Medicare” (“Reclaim and Strengthen Medicare: Undo the Damage to Health Care for All,” Rekindling Reform, May 30, 2007).

“Shares of some of the largest health insurers rose Tuesday after the government announced higher-than-expected payment increases for companies that operate private Medicare plans… Of the 43 million Americans 65 years or older who receive health care through Medicare, about 8 million are enrolled in Medicare Advantage plans run by private companies. The program was designed to expand Medicare and better manage costs, though recent statistics show the government spends more on patients in Medicare Advantage plans than those in traditional Medicare” (“Insurers to Get Higher Medicare Payments,” Matthew Perrone, The Associated Press, April 3, 2007).

“The original design of the Medicare program—its universality, shared risk, simplicity and dependability—created the foundation for its 40 years of success. Medicare’s universal nature ensures that virtually all older Americans and many people with disabilities receive the health care they need, while Medicare pools risk in order to share the financial burdens of illness across healthy and sick individuals and affluent and low-income families... There are many reasons to celebrate the past 40 years of Medicare, but among the most important are: 1) guaranteed access to care for people with Medicare; 2) improved quality of life for older Americans and people with disabilities; 3) administrative efficiency and cost containment; 4) critical support for America’s healthcare system; and 5) guaranteed benefits and choice of providers” (“Medicare: A National Treasure for Forty Years,” Medicare Rights Center, July 2005).

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Medicare Private Health Plan Monitoring Project

The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a private health plan. With information about what the issues are with Medicare Advantage plans, we will be able to demand that those problems be fixed.

Submit your story at http://www.medicarerights.org/maplanstories.html.

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The Louder Our Voice, the Stronger Our Message

Asclepios — named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.

Please send all replies and subscription requests to mrcadvocacyupdate@medicarerights.org.

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