The Problem with Medicare

Medicare is under siege. The senior health insurance program has been targeted by Republicans for “reform” – which is a nice way of saying “extinction” – and there are Democrats who appear willing to go along.

Former President Bill Clinton, for instance, is on record about the need to “do something” about Medicare costs. And given his own record on Social Security and Medicare while in the White House, we can only assume he means cuts of a different order.

But is cutting Medicare the way to go?

Medicare remains the most effective and efficient health insurance plan in the United States, with far less money going to administrative costs and far more toward care than any other aside from the Veterans Administration.

Medicare’s problem is not inefficiency. It’s problem is its customer base. Think about it: Health-care costs have been skyrocketing for all Americans and while they have not been rising any more quickly for seniors, the number of seniors is rising. That means we are in the midst of a cost shift, with government plans taking up more and more of the burden.

So what’s the solution? Rather than attempt to nibble at the edges, which is what every proposal to rein in costs does, we should be more aggressive.

We need to remove the private insurance companies from health care altogether and expand Medicare to the entire population.

Americans spend almost twice per capita on health care than any of the major industrial nations, and yet we leave about one in six Americans uninsured and our health outcomes are more in line with poorer nations than with one of history’s richest.

Our system – a mix of public (Medicare, Medicaid and the VA) and private plans that rely heavily on employers – fails on almost every measure, including the drag it places on our economy. To allow it to stand while putting one of the few functioning and efficient health programs on the chopping block is not just foolish but immoral.

As I said, we need to do more than play defense.

In New York, defense of Medicare pushed a long-standing Republican seat into the Democratic column but it did nothing to improve the system.

The 2012 election is now expected to follow the same script.

Wendell Potter, the former health industry flack who has become the industry’s leading critic, made that clear in a recent post to The Huffington Post (disclosure: Huffington Post is owned by AOL, which also owns, for which I work).

Small businesses, he said, were struggling under the weight of a bloated system and many have become involved with the singler-payer movement.

He talked with David Steil, “a small business owner and former Republican — yes, Republican — state legislator in Pennsylvania” who is now the “president of the advocacy group Health Care 4 All PA,” and Vermont Gov. Peter Shumlin, who signed single-payer legislation in his state. Both told him that “Their experiences as businessmen convinced them that a health care system controlled by private insurers cannot be sustained, regardless of attempts to force those insurers to provide affordable access to care for all Americans.“

Over the last decade, Potter points out, we have gone from 7 in 10 employers offering coverage to 6 in 10 and while the Affordable Care Act, — a.k.a., Obamacare – uses tax breaks as a carrot to encourage businesses to offer coverage, this government financial aid has made only a nominal impact.

“(M)ost small companies are still finding it difficult to pay what insurance firms are demanding,” Potter writes. This makes sense given that employer premiums “stood at $13,770 for family coverage” in 2010, or “more than double what they paid just 10 years earlier.”

The subsidies being offered under the Obama program are not going to be enough to deflate the bloat, because it leaves the broad outlines in place. It is the private system that is the problem.

The only way to fix it? Get the private insurers out of the health-care business.

Hank Kalet is regional editor for in New Jersey. You can email him at

From The Progressive Populist, July 1/15, 2011

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