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About the President's Medicare Budget:
Baby Boomers Unite! You Have Nothing to Lose but Your Health Care
Make no mistake about it, President Bush's budget builds on his ongoing efforts to do away with Medicare as a uniform health insurance program for older and disabled Americans. Instead, the Administration seeks to replace it with a fragmented set of private plans. This effort is based on industry lobbying and philosophical preferences about how to deliver health coverage, not on a fiscal analysis about what is most cost effective.
As presented, the budget calls for additional premium payments for both Medicare Part B and the new prescription drug program for people with annual incomes over $80,000. It would also implement significant, on-going reductions in reimbursements to health care providers. The wide-ranging results of such proposals may be surprising to some:
- Medicare is becoming an income-based program rather than a social insurance program in which everyone contributes for the good of all. As people of means are required to pay higher premiums they will seek less expensive options in one of Medicare’s ever-increasing number of private plans.
- Private plans will bleed the Medicare budget. Private Medicare plans are subsidized by Medicare. Approximately 12% more is spent per beneficiary in private plans than in the traditional Medicare program. These subsidies will cost over $5 billion over the next 5 years and will drive the traditional Medicare program to make draconian cuts.
- People with lower incomes – often those who also have greater health needs – will remain in the traditional Medicare program.
- Medicare will be subject to automatic across-the-board cuts if a specified expenditure cap is reached. This kind of automatic budget cutting does not exist for defense, education, or any other budget area.
- As the infamous Baby Boomers turn 65 Medicare will not cover the health care they need. Surprise! It turns out that the way to deal with the coming of age of Americans is to STOP meeting their needs.
Means-testing Medicare is antithetical to the universal health coverage it has provided successfully for generations. People forget what it was like before Medicare: 50% of people over 65 had no health insurance at all. Because of Medicare, 93% of older people now have inpatient and outpatient health coverage. Medicare is a successful program whose support and longevity comes, in part, from its universality. If Medicare is means-tested and broken into hundreds of private options, it will lose its universality and traditional Medicare will become another poverty program, subject to even bigger budget cuts and offering poorer health care coverage.
The facts show that the traditional Medicare program is not only more cost-effective than private insurance, it is also a better means to provide secure, basic health insurance for older and disabled people. At a time when we are beginning to seriously discuss the need for universal health insurance, and many states have taken action, the Administration continues to seek to do away with Medicare, the only universal coverage we have.
The privatizing of Medicare spends precious dollars on subsidizing private plans, dollars that would be better spent on health coverage for our aging population within the traditional Medicare program. Instead of breaking up Medicare and the community of interests of all its beneficiaries, policy-makers should build on Medicare - and consider making it more, not less, available.
Listen up, Baby Boomers. This is about you.
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