Medicare + Choice: An Interim Report Card
Health Affairs
July/August 2001
by Marsha Gold
"By almost any measure, the interim grade for the Medicare + Choice program as of the start of 2001 must be judged a 'D' if not an 'F.' In contrast to the goal of expanded choice, the M + C program has reduced the range of choice that once existed, with existing plans withdrawing, few new participants entering from among the newly authorized types of options, no geographic redistribution of participants to develop choice where none existed, and an increase rather decrease in the inequities in benefits and offerings between higher- and lower-paid areas of the country."
From the editor's prologue to this article:
"Remarkably, the policy community's faith in the competitive model has persisted despite the acutely disappointing performance of Medicare + Choice. Congress has amended the program and enhanced payment levels, but enrollment and plan participation continue to decline. Nor has any alternative approach to restructuring Medicare emerged."
Comment: President Bush and the conservatives along with the "bipartisan" support of Sen. Breaux continue to support privatization of Medicare through premium support legislation that utilizes private health plans. The experience with the Medicare + Choice program has confirmed that the private plans have wasted resources while denying coverage to major segments of the eligible population. Even more outrageous is that the editor of Health Affairs, perhaps the most important publication on health policy, states that no alternative approach to restructuring Medicare has emerged. Okay everyone... Open your windows... Climb out on your rooftops... And scream... WE WANT PRESCRIPTION COVERAGE! WE WANT CARE TO BE ACCESSIBLE AND AFFORDABLE FOR EVERYONE BY ELIMINATING OUT-OF-POCKET EXPENSES!
Of course, those supporting privatization claim that we cannot afford the existing program, much less the expansions. More nonsense. We already are funding the existing program through both the tax system and cost sharing. But cost sharing has had the negative impact of impairing access to care for lower income individuals simply because that care is unaffordable for them. A program of social insurance is clearly defective if it does not assure benefits for everyone. Means testing has been suggested and utilized to a limited extent, but that increases costs, increases administrative complexity, and is demeaning. Cost sharing has been promoted as a means of reducing utilization of health care services. That has essentially no impact on the affluent, but it does cause lower income individuals to forgo beneficial services because of lack of affordability. It has been estimated that the costs of administering cost sharing and means testing programs offset the savings induced by cost sharing. If we can get past our apprehensions about "government" and "taxes," then it would be a greatly improved system of social insurance if we were to place all funds into the same pool and eliminate out-of-pocket expenses.
The prospect of including pharmaceuticals in the Medicare program has produced the predicted outcry that we would be bankrupting Medicare since this sector of health care costs is on a rocket trajectory. But should that be? Why do we accept the fact that physicians, hospitals, laboratories, and other providers of care are mandated to accept controls on their costs, but that we should allow the pharmaceutical industry total freedom, subject only to the dubious forces of the marketplace. When Medicare was first established, physicians were allowed to charge usual, customary and reasonable fees, and what happened? The rocket trajectory. The explosion of costs had to be brought under control through fee controls. (For those that protest government fee controls, keep in mind that the only real impact of managed care has been the imposition by the private, health plan bureaucracies of... guess what... fee controls!) There is absolutely no reason that we should not apply the same cost containment strategies to the pharmaceutical industry, especially now that pharmaceuticals have become an essential, integral part of health care. Much of the research is funded by taxpayers through the NIH. We are entitled to a return on our investment in the form of lower drug prices. The industry wastes tremendous resources in marketing and in production of expensive copycat drugs that add very little value. Let's force this industry to adopt the same efficiencies and fair pricing to which hospitals and physicians must adhere.
Medigap plans are one of the worst insurance values on the market and waste dollars that could be better spent on health care. Many are unable to afford them. If we included pharmaceuticals in the Medicare program, and eliminated cost sharing, Medigap plans would be placed in that trash heap of bad ideas. Now that we know that private Medicare managed care plans have been wasting taxpayer resources, we can throw them on the same trash heap.
Come on! Let's fix our traditional Medicare program by adding pharmaceuticals and eliminating out-of-pocket expenses. And then let's let everyone participate in the single payer plan that's as close to perfect as humanly possible, Medicare for All.