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Galen Institute
Consumer Choice Matters, #41
11/25/2003
HSA TSUNAMI
By Greg Scandlen

The new Health Savings Accounts (HSA) provision included in the Medicare bill just passed the Senate 54-44 and soon will be signed by the President. The new law will go into effect January 1, 2004. All 250 million non-elderly Americans will now have access to a Medical Savings Account, and one that is far more attractive than the Archer MSAs that were enacted in 1996.

Market analysis

* There will be a rush of banks, insurance companies and third-party administrators (TPAs) to develop products. The previous restrictions on
Archer MSAs have been removed. There is no longer a sunset provision,
there is no limit on employer size or total enrollment.

* All these development efforts will lead to far greater public awareness of the product.

* The individual market will convert to HSAs in droves.

* The small group market will be slower. Small employers are not benefits innovators.

* The fully-insured mid-market is a different story. Companies with 100
to 1,000 employees are more likely to have staff that concentrates on
benefits options and has the time to investigate new products. These companies
have been raising cost-sharing requirements anyway, so the prospect of
employee responsibility for funding part of the HSA is less of a stretch in this
segment.

* Self-insured large companies will likely stay with Health Reimbursement
Arrangements (HRAs). Companies that pay directly for the services consumed
are unlikely to be attracted to HSAs, which expect an up-front contribution
of money for all employees whether they are using services or not. HRAs
have the considerable advantage of not requiring pre-funding.

* The uninsured should find it easier to gain coverage. HSAs will be available to everybody – especially those workers whose employers provide no coverage at all, and who make up the vast majority of the uninsured.

Prospects

The market is ready for this. All of the discussion about consumer directed
health care in the last few years has sensitized corporate decision makers
to the advantage of putting more control in the hands of employees. HSAs
provide them with the perfect opportunity to do exactly that. The year 2004
will probably not see massive enrollment because vendors will need to
work on developing new products and marketing strategies. But by mid-year
there will be an enormous push to gain an early position in this new market
and become the recognized “industry leader.”

The timing couldn’t be better, with an improving economy and widespread
gains in the equities markets. Venture capital will be in great demand
to get the new products off the ground. Get ready for a twelve month race
to the finish line of 12/31/04 and the first-year enrollment numbers.

http://www.galen.org/ccbdocs.asp?docID=569

Comment: The Galen Institute… is a “free-market research organization”
that “was founded in 1995 by Grace-Marie Turner to promote a more
informed public debate over individual freedom, consumer choice, competition,
and diversity in the health sector” (Mission statement, Galen Institute).
Anyone following the health care reform debate recognizes the rhetoric of the
advocates of “consumer-directed,” “free market” health care. Galen has
strongly supported medical savings accounts (now health savings accounts, or
HSAs) as a tool to achieve consumer independence in the free marketplace.

What Galen fails to point out is that HSAs fragment the insurance pools. The
tax advantages accrue to the wealthy, and a tax-favored personal account
appeals to those who do not expect to have high health care bills. By removing the large sector of the healthier and wealthier from the traditional insurance risk pools, the higher-cost individuals remaining drive up premiums making traditional coverage unaffordable for those with the greatest health care needs. HSAs are both regressive tax policy, and cruel health policy which rations care by erecting financial barriers for those with the greatest needs.

For those of us who are healthy, HSAs with catastrophic coverage would serve our purposes well. But those of us who later develop significant disorders will discover why we should all have comprehensive coverage using a common risk pool. Many of us would decide in advance that we want that degree of security and would want to purchase traditional coverage. But we’ll find that traditional coverage will have left the market because of the death spiral of unaffordable premiums.

This fundamental flaw in dividing the risk pool into segregated accounts, favoring the wealthy while penalizing the sick, alone is enough to disqualify HSAs as a rational model of reform. But there are a great many other problems, only a few of which are listed here.

HSAs must be matched with high-deductible insurance. Insurers offer primarily managed care PPOs as the high deductible or “catastrophic” option. PPOs are undergoing transformation in order to keep their premiums affordable. They are using methods often lacking transparency to reduce benefits and increase out-of-pocket cost sharing. Tighter provider lists decrease choices. Greater penalties for using non-providers are now standard. Tiering rates for services shift costs to beneficiaries.

Individual PPO plans often exclude essential benefits such as obstetrical services. Deductibles have become the norm in PPO plans. The cost savings by using a high deductible plan theoretically funds the HSA. But, in fact, the savings now is usually so small that it could not be considered as a major source for HSA funding. When pricing different plans, you will find that the moderate deductibles have very little effect on the premium. Rather, the premium differences are due more to other factors such as the richness of the benefit package, other cost sharing measures, and the differences in competitive pricing in the various service areas.

In the individual market, most insurers will not sell plans to individuals with significant preexisting disorders, often for even simple problems such as allergic rhinitis. The uninsured will be able to access this market only if they have no current or expected needs for health care. Creating an insurance market for the healthy, and letting those with needs fend for themselves, is inhumane health policy at best.

A major flaw in our health care system is the profound administrative waste that diverts funds from patient care. HSAs add a very significant administrative layer and interject more middlemen into the process. Insurers sell administrative services, and HSAs will expand their market. Not only will insurers be involved but bank trustees, third party administrators, various investment managers, and others will all be there quite willing to divert to themselves their unfair share of the health care dollar. And the providers of care will have added to their administrative burden the need to access millions of individual, segregated accounts as they seek compensation for their services, whether by direct billing to the account managers or by the necessity of providing documentation of qualified expenses.

Once the beneficiary is eligible for Medicare, funds may be withdrawn from
the HSAs for non-medical purposes without penalty. For those who remain
healthy, the HSA becomes the equivalent of an individual retirement account
(IRA). Much can be said about the inequitable, regressive tax subsidies of
IRAs, but that will not be discussed here. But it is clearly inappropriate to remove dollars from an equitable health care risk pool and grant them to wealthier individuals. Such regressive tax avoidance schemes certainly should have no place in our health care system.

This program requires that the deductible for the catastrophic coverage
be at lease $1000 for individuals and $2000 for families. Many already
have deductibles at this level or higher. Why should an administratively
cumbersome program be established for expenses that are already being
met by personal reserves? The tax advantages for most would not begin to
offset the extra expenses and nuisance of HSAs.

Again, the worst feature of HSAs is that they effectively shift costs to individuals with the greatest health care needs which will threaten affordability of care. More individuals will be forced into public programs, such as Medicaid, but only if eligible. Public programs targeted to those with greater needs will remain chronically underfunded, again further impairing access.

It is important to understand health savings accounts. They are explained in
Title XII of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (pages 660-678). The bill can be downloaded at:
http://www.house.gov/medicarerx/hr1-conflegtext.pdf

Although there are many other elements of the Medicare bill that are absolutely unacceptable, we have maybe a year or so to change them. But Title XII, which authorizes HSAs, must be repealed immediately because it becomes law in only one month. Once millions of HSAs are established, it will be almost impossible to reverse this program.

CONTACT YOUR REPRESENTATIVES AND SENATORS IMMEDIATELY AND DEMAND THE URGENT REPEAL OF TITLE XII OF THE MEDICARE ACT!

–__–__–

Message: 2
From: “Don McCanne”
To:
Date: Sat, 29 Nov 2003 18:11:11 -0800
Subject: qotd: Bob LeBow

Dear Don and Ida,

I am so sorry to inform you that our great friend Dr. Bob LeBow just
passed away today, at about 11:30. As his fellow warriors, I know you would
want to know and would want to tell the many other friends around the country.
His funeral will be tomorrow at 1:00 at the Relyea Funeral Home at 318 N.
Latah in Boise. We have lost a giant among men.

Ern

Erwin Teuber, Ph.D.
Executive Director
Terry Reilly Health Services
211 16th Avenue North
Nampa, ID 83653
e-mail: eteuber@trhs.org
website: http://www.trhs.org

The Idaho Statesman
November 30, 2003
Doctor who ‘walked the walk’ dies in Boise at 63

Dr. Bob LeBow, a tireless advocate for health-care reform who was severely injured in a 2002 bicycle accident, died Saturday in a Boise hospital.

LeBow, 63, spent more than 30 years working to provide medical services
to those who can least afford them.

LeBow’s accident came shortly after the publication of his book “Health Care Meltdown,” an indictment of a system that grants access to medical care
based on ability to pay.

A former president of Physicians for a National Health Program, LeBow
continued to campaign for health-care reform after his devastating injury.

In August, he spoke at a news conference in Philadelphia, advocating a
national health insurance program. With words that echo his lifelong passion and service, LeBow said, “It is time to put the patient first – not last – in the setting of priorities.”

http://www.idahostatesman.com/story.asp?ID=55031

Health Care Meltdown (Benefiting needy patients at Terry Reilly Health
Services):
http://www.trhs.org/bobsbook/

Comment: In Bob’s own words:

“The U.S. also is the only developed country where getting sick or injured can, and all too frequently does, lead to bankruptcy. …

“Our employer-based health insurance system is outmoded, illogical and needs to be replaced. Perverse incentives make our health care system a poor value for the amount we spend. Health care needs to return to an emphasis on health, not cost or profit. …”

http://www.idahostatesman.com/story.asp?I

Los Angeles Times
November 27, 2003
Savings Accounts Key to Drug Law
By Vicki Kemper

… when Republican leaders were scrambling to attract or hold onto the votes of the most conservative members, their most powerful argument was reduced to a three-word mantra: health savings accounts.

… these unique tax shelters never had anything to do with Medicare or prescription drugs.

“It’s a double tax break,” said Gail Shearer, director of health policy analysis for Consumers Union. “Your money does not get taxed when you put in it; it does not get taxed when you pull it out. It’s an unprecedented tax shelter, especially for wealthy people, who are in a higher tax bracket.”

Shearer and other critics warn that the accounts will undermine the nation’s employer-based health-insurance system, leave additional low- and moderate-income workers unable to afford health insurance and further deplete the federal treasury.

“They will be attractive to the affluent and the healthy,” said Edwin Park, senior health policy analyst at the liberal Center for Budget and Policy Priorities. But he argued that premiums for conventional policies, which would be held by workers who are sicker and have higher medical expenses, could then skyrocket, leading some employers to stop offering such coverage.

“This is terrible policy on the tax, fiscal and health fronts,” he said.

http://www.latimes.com/news/nationworld/nation/la-na-savings27nov27,1,6319399.story?coll=la-headlines-nation

Comment: These medical savings accounts, renamed health savings accounts
(HSAs), have nothing to do with Medicare nor with the prescription benefit.
But they have everything to do with the efforts of conservatives to shift our private health coverage to “consumer-directed” models.

HSAs are much more tax policy than anything else. They allow tax-free contributions to personal, segregated funds for health care payments.
Those in higher tax brackets benefit whereas those with incomes below the
taxable threshold receive very little benefit. Thus this is a highly regressive tax policy, providing generous tax subsidies to the HSAs of the wealthy not available to the same extent to lower income individuals.

But the greatest concern is that HSAs will selectively attract those who do not believe that they will have to pay much out of their HSAs. Obviously, it is the healthier individuals, who happen to be the majority, that will be attracted to these plans. By concentrating those with higher health care needs into our traditional individual and employer-sponsored health plans, costs will go up. With increased costs, premiums will skyrocket. With this “death spiral” of premiums, traditional health insurance will become less and less affordable, and the numbers of uninsured will increase. Thus an extraneous program, HSAs, which has been included in the Medicare prescription bill, threatens the future integrity of the private health plans on which most of us depend.

Once a large number of these tax-preferred accounts have been established,
reversal of this program will be very difficult. It is essential that this provision of the Medicare bill be repealed immediately since it goes into effect January 1, 2004, only a month from now. That means that it must be the very first item of business when the members of Congress return! It is no coincidence that the conservatives made sure that this program would be up and running immediately as others begin to work on repealing sections that will not be in force for some years to come.

CONTACT YOUR SENATORS AND REPRESENTATIVES IMMEDIATELY TO DEMAND URGENT REPEAL OF THE HEALTH SAVINGS ACCOUNT SECTION OF THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003!

(Because of the urgency, please circulate this message immediately to as
many concerned citizens as possible. HSAs will be a permanent fixture of our
health care system without an immediate groundswell of opposition.)

AFL-CIO
News Release
Nov. 19, 2003
Poll: Seniors Oppose Medicare Bill in Congress

By an almost two-thirds majority, senior Americans say Congress and the White House should work for a better Medicare prescription drug plan than the one offered in a bill the House and Senate are set to vote on this week, according to a new nationwide survey. Only 19 percent of those polled say Congress should pass the current bill.

Peter D. Hart Research Associates conducted the poll of voters ages 55 years and older Nov. 18-19 for the AFLCIO after details of the bill-merged from earlier House and Senate-passed versions were released.

Respondents overwhelmingly view the drug plan unfavorably (65 percent to 26
percent)…

The poll also found 65 percent unfavorably view the bill’s increase in subsidies for private HMOs and move toward privatizing Medicare.

http://www.aflcio.org/issuespolitics/socialsecurity/medicarebasics/s11192003.cfm

Comment: Why are so many legislators supporting a bill that the people don’t want? And why don’t they craft a bill that the people do want? And why do we keep reelecting a non-responsive Congress?

Consumers Union
November 17, 2003

Medicare Prescription Drugs:
Conference Committee Agreement Asks Beneficiaries to Pay Too High a Price
For Modest Benefit
By Gail Shearer

Best features of the agreement:

* Provides meaningful prescription drug coverage for very low-income individuals with incomes below 150 percent of the federal poverty level, provided they can pass the bureaucratic hurdles and have very low assets.

* Provides prescription drug coverage through Medicare for those “dual eligibles” who are eligible for both Medicare and Medicaid (though many may face higher co-payments than they do now).

* Provides modest relief for the small percent of beneficiaries who have the highest (catastrophic) prescription drug needs (though they continue to face
high out-of-pocket costs).

* Provides some relief for beneficiaries who now have no prescription drug coverage, or have high-priced medigap drug coverage, but relief will be modest and many will still face very high out-of-pocket costs.

Worst features of the agreement:

* Uses a model (and even explicit language) that precludes deep discounts
for beneficiaries and assures that prescription drug expenditures will continue to spiral.

* The inadequate funding, failure to contain costs, and benefit design combine to mean that the benefit will be modest for most and skimpy for many; the benefit will not meet the public’s expectations for comprehensive coverage that is similar to what Members of Congress enjoy. Millions will face large out-of-pocket costs because of the large gap in coverage (the doughnut).

* Subjects about one quarter of Medicare beneficiaries in 2010 (possibly earlier) to pressure to leave traditional fee-for-service Medicare, where they have freedom to choose their own doctor, by forcing traditional Medicare to compete with private health plans that limit choice of doctor and can offer lower premiums because they cherry-pick the healthy.

(Private health plans’ reimbursement levels do not adequately reflect the better-than-average health status of their enrollees, boosting HMO profits.)

* Will create a crisis atmosphere in about 2010 when projections show that funding from general revenues will exceed (at a future date) 45 percent of
Medicare spending: likely to lead to cutbacks in Medicare benefits, increased cost-sharing, and increased reliance on relatively regressive financing sources.

* Creates a new tax shelter that will benefit the wealthy, to create health
savings accounts; unprecedented tax policy that will undermine the provision
of comprehensive policies by employers, drive up premiums for those who want
comprehensive coverage, and shift costs to people under 65 who have existing
health conditions.

* The model is premised on reliance on private insurance plans and private health plans to provide coverage, continuing the practice of over-paying private companies (by failing to take into account the lower costs of their enrollees), guaranteeing that special interests will come to Congress to lobby for more money (and threatening to cut back coverage otherwise).

* State governments will not be able to attain the prescription drug discounts achieved under Medicaid, since dual eligibles will be in Medicare.

* Millions of dual eligibles (including nursing home residents) will face higher copayments than they pay today, and these co-payments will increase over time.

* Variation of actual “benefits” because of secret and private formularies used by the pharmaceutical benefit managers (PBM’s). Lists of covered drugs will vary from plan to plan and from region to region. Selection of drugs for the formularies need not be based on scientific evidence, but can be based on secret deals that are hidden from the public and regulators. PBM’s will have no accountability to the public or government and their business dealings will lack transparency. Conflicts-of-interests will cost taxpayers billions of dollars.

* Weak “federal fallback” provision means that beneficiaries in an area that
lacks true private competition of drug-only plans (i.e., with just one drug-only plan and one “integrated plan”) will not be eligible for Medicare fallback coverage. No assurance that the premium for the drug-only plan will be anywhere near the $35/month estimate. In other words, if a region has one drug-only plan, charging $70 a month, and one preferred provider plan (PPO) that severely restricts one’s choice of doctor, there would be no federal fallback plan.

* The cutoff in eligibility for low-income subsidies is very low: an individual with income above $13,000 and a couple with income above $16,300 will be ineligible for the low-income subsidy (2002 federal poverty levels).

* Millions of people with comprehensive retiree drug coverage will lose this
coverage, and will end up with a Medicare policy that is much less comprehensive. (Retiree coverage is typically comprehensive, without a “doughnut” in coverage; the proposed benefit structure, which does not count
retiree plan payments toward the catastrophic level, is likely to lead many employers to drop their retiree coverage. The conference agreement’s additional subsidies for employers is unlikely to eliminate this problem.)

* May weaken the existing quality reporting standards for private health plans, hindering consumers’ ability to make informed decisions about private health plans and undermining the premise that choice of health plan is good for consumers.

* Results in continued profitability for the pharmaceutical industry (guaranteeing larger markets without governmental pressure to restrain prices) while asking nothing for the public good in return.

It is troubling indeed that the elements on the “best list” come with caveats that mean that the good things are not as good as they should be. It is nothing short of tragic that legislation that was meant to offer relief to Medicare beneficiaries comes laden down with so many provisions that will harm Medicare beneficiaries and even threaten Medicare’s long-term aviability.

Conclusion:

Medicare beneficiaries have waited for a long-time for relief from the financial burden of high prescription drug costs, and are desperate for some relief. When Congress set aside $400 billion (over ten years) to address the problem, we understood that whatever proposal emerged would be able to address only a fraction of the problem. Because the Conferees failed to adopt a plan that curbs prescription drug expenditures, and instead developed a model that relies on an insurance industry eager to see Medicare privatized while collecting more government subsidies, Consumers Union reluctantly concludes that, on balance, Medicare beneficiaries will be severely harmed by this proposal. We urge consumers to request their Representatives and Senators go back to the drawing board to enact legislation that meets the needs of seniors and the disabled, not legislation that is shaped by special interests.

For the full report:
http://www.consumersunion.org/1117%20medicare%20report%20final.pdf

Comment: Some politicians are concerned that a “filibuster against prescription drugs for seniors” is too great of a political price to pay for defeating this highly destructive legislation. Our task will be to make certain that the political price is paid by the true villains: those who refused to allow consideration of a bona fide prescription benefit and forced the necessity of resorting to a filibuster to protect what we already do have.

Los Angeles Times
November 17, 2003
Deal Would Alter Medicare’s Core
If a compromise bill on prescription drugs passes, the government program
will become a massive subsidized insurance market.
By Vicki Kemper

As Congress prepares to vote on a final $400-billion Medicare prescription drug bill, there is one thing on which most lawmakers agree: The legislation would, over time, change the essence of the 38-year-old health insurance program for the elderly and disabled.

Now, the government sets the prices for thousands of medical services and pays the bills. But under the Medicare reform legislation, some details of which were released Sunday, the government would pay private insurance companies and managed-care plans billions of dollars in incentives to compete with traditional Medicare for the prescription drug business and general health-care needs of more than 40 million Americans.

It is that fundamental difference – Medicare as a government program versus Medicare as a huge government-subsidized health insurance market – that underlies the deep divisions between Democratic opponents of the bill and its Republican supporters.

With Republicans in control of both Congress and the House-Senate committee
that shaped the compromise legislation, it is not surprising that the GOP goal of containing Medicare costs by turning much of the program over to the private sector prevailed over Democrats’ desire to maintain Medicare as a social insurance program.

For Rep. Bill Thomas (R-Bakersfield), chairman of the House-Senate negotiating committee, the legislation is all about reducing the government’s financial burden for seniors’ health care while making Medicare sustainable over the long term and adding a major benefit.

“Over the next decade, [the bill] will also change the relationship between taxpayers and an ever more expensive program,” he said.

http://www.latimes.com/news/printedition/asection/la-na-medicare17nov17,1,5618060.story?coll=la-news-a_section

The New York Times
November 18, 2003
Medicare Plan Covering Drugs Backed by AARP
By Robert Pear and Robin Toner

AARP, the largest and most influential organization of older Americans, threw its weight behind a bill on Monday that offers drug benefits to the elderly as part of the biggest transformation of Medicare in its 38-year history.

The group will support the bill with $7 million worth of newspaper and author of the premium support proposal along with Rep. Bill Thomas and Sen. Bill Frist.
Thus the only representation that the Democrats really had was “TheGreat
Compromiser” Sen. Max Baucus. Sen. Baucus’ negotiating style is to enter
negotiations by playing all of his cards immediately, and then negotiate the
proposals that originate from the right. Since he is no match for Bill Thomas, the process ended with the approval of the agenda of the far right. With this process no outcome other than privatization of Medicare was remotely possible.

The prescription benefit alone is totally unsatisfactory because it fails to place prescription drugs under the same type of cost controls that the rest of the health care delivery system has. Affordability must be a prime consideration. Also, the bill grants private plans the control of prescription benefits. And the actual benefit provided is significantly deficient. As stand-alone legislation, it should be rejected so that Congress can move forward with a legitimate prescription program.

But, far worse, the innumerable measures included to meet Thomas’ goal of “reducing the government’s financial burden for seniors’ health care” are deliberately designed to destroy Medicare as a program of social insurance.
It reduces the government’s financial burden by shifting more of the funding
of health care back to the patient. Once fragmented by private options, the
traditional Medicare program will be severely underfunded, like Medicaid.
But the traditional program will have only about half of the benefits of Medicaid, unless they are successful in further reducing the “unaffordable” Medicare benefit package. An underfunded, stripped-down, welfare-type program for the sick and poor is not the Medicare transformation that we need or want.

AARP is deservedly the most influential organization representing the interests of the seniors of this nation. William Novelli has firmly staked his position in support of private interests at the cost of AARP’s members. There are only two choices for us. Either William Novelli must resign, or he must witness the greatest exit of an organization’s membership in the history of mankind. But we really need AARP to continue its role as the credible voice of seniors. The only real option is that Novelli must go.

Destroying Medicare for a crummy prescription benefit is not a compromise.
It’s a sell-out!

Los Angeles Times
November 17, 2003
Deal Would Alter Medicare’s Core
If a compromise bill on prescription drugs passes, the government program
will become a massive subsidized insurance market.
By Vicki Kemper

As Congress prepares to vote on a final $400-billion Medicare prescription drug bill, there is one thing on which most lawmakers agree: The legislation would, over time, change the essence of the 38-year-old health insurance program for the elderly and disabled.

Now, the government sets the prices for thousands of medical services and pays the bills. But under the Medicare reform legislation, some details of which were released Sunday, the government would pay private insurance companies and managed-care plans billions of dollars in incentives to compete with traditional Medicare for the prescription drug business and general health-care needs of more than 40 million Americans.

It is that fundamental difference – Medicare as a government program versus Medicare as a huge government-subsidized health insurance market – that underlies the deep divisions between Democratic opponents of the bill and its Republican supporters.

With Republicans in control of both Congress and the House-Senate committee
that shaped the compromise legislation, it is not surprising that the GOP goal of containing Medicare costs by turning much of the program over to the private sector prevailed over Democrats’ desire to maintain Medicare as a social insurance program.

For Rep. Bill Thomas (R-Bakersfield), chairman of the House-Senate negotiating committee, the legislation is all about reducing the government’s financial burden for seniors’ health care while making Medicare sustainable over the long term and adding a major benefit.

“Over the next decade, [the bill] will also change the relationship between taxpayers and an ever more expensive program,” he said.

http://www.latimes.com/news/printedition/asection/la-na-medicare17nov17,1,5618060.story?coll=la-news-a_section

The New York Times
November 18, 2003
Medicare Plan Covering Drugs Backed by AARP
By Robert Pear and Robin Toner

AARP, the largest and most influential organization of older Americans, threw its weight behind a bill on Monday that offers drug benefits to the elderly as part of the biggest transformation of Medicare in its 38-year history.

The group will support the bill with $7 million worth of newspaper and author of the premium support proposal along with Rep. Bill Thomas and Sen. Bill Frist.
Thus the only representation that the Democrats really had was “TheGreat
Compromiser” Sen. Max Baucus. Sen. Baucus’ negotiating style is to enter
negotiations by playing all of his cards immediately, and then negotiate the
proposals that originate from the right. Since he is no match for Bill Thomas, the process ended with the approval of the agenda of the far right. With this process no outcome other than privatization of Medicare was remotely possible.

The prescription benefit alone is totally unsatisfactory because it fails to place prescription drugs under the same type of cost controls that the rest of the health care delivery system has. Affordability must be a prime consideration. Also, the bill grants private plans the control of prescription benefits. And the actual benefit provided is significantly deficient. As stand-alone legislation, it should be rejected so that Congress can move forward with a legitimate prescription program.

But, far worse, the innumerable measures included to meet Thomas’ goal of “reducing the government’s financial burden for seniors’ health care” are deliberately designed to destroy Medicare as a program of social insurance.
It reduces the government’s financial burden by shifting more of the funding
of health care back to the patient. Once fragmented by private options, the
traditional Medicare program will be severely underfunded, like Medicaid.
But the traditional program will have only about half of the benefits of Medicaid, unless they are successful in further reducing the “unaffordable” Medicare benefit package. An underfunded, stripped-down, welfare-type program for the sick and poor is not the Medicare transformation that we need or want.

AARP is deservedly the most influential organization representing the interests of the seniors of this nation. William Novelli has firmly staked his position in support of private interests at the cost of AARP’s members. There are only two choices for us. Either William Novelli must resign, or he must witness the greatest exit of an organization’s membership in the history of mankind. But we really need AARP to continue its role as the credible voice of seniors. The only real option is that Novelli must go.

Destroying Medicare for a crummy prescription benefit is not a compromise.
It’s a sell-out!