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Robert Creamer

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Republicans Claim That We Must Destroy Medicare to Save It

Posted: 06/15/11 09:43 AM ET

People like me who came of political age in the 1960's will never forget the absurd statement from an American General, that we had to destroy a Vietnamese village in order to save it. That Orwellian proposition came to symbolize the essence of the progressive case against the Vietnam War.

In 2011 the Republican proposal to end Medicare in order to "save it" may have the same iconic power to lay bare the true goals of the GOP's political and economic philosophy.

The Republicans argue that if Medicare costs continue to rise at their current rate, the program will "go bankrupt" in a little over a decade. Their solution is to end Medicare and replace it with a plan where the taxpayers give insurance companies vouchers to cover an ever-shrinking share of insurance premiums for retirees and the disabled.

Their proposal does nothing -- zero -- to address the escalating costs of health care that are driving the increased Medicare costs -- and all health care spending. In fact it actually increases those costs. Instead, it simply shifts those costs from the government onto each individual retiree. In fact, the CBO estimates that the average Medicare recipient will spend over $6,000 more on health care each year under the Republican plan than they would under Medicare.

The fact is that the Republicans aren't even trying to control skyrocketing health care costs. Instead they intend to create a new -- non-Medicare -- program that will allow their large benefactors like the insurance and pharmaceutical companies -- to make huge sums of money from the taxpayers.

Reining in health care costs is not an intractable problem. It is entirely possible to "bend the cost curve", but you have to be willing to stop the corporate feeding frenzy that lies at its root. The Republicans aren't.

Actually controlling rising health care costs is last thing they want to do. Republican Members of Congress have voted down the line to repeal the Affordable Care Act (ACA) that eliminates half a trillion dollars of waste and corporate subsidy from Medicare without reducing benefits by a dime. And they voted to cut the many other provisions in the ACA that the Congressional Budget Office found would save hundreds of billions of dollars in wasted health care expenditures.

Not only do Republicans oppose provisions that bring down costs. They actually owe their control of the House in considerable measure to their willingness to conflate reining in Medicare's underlying health care costs with cutting benefits. Last fall they shamelessly campaigned across the country against the Democrat's $500 billion "cuts" to Medicare -- implying that that would cut Medicare benefits -- when they knew full well that was not true. In fact these reductions in health care spending did not cut benefits at all and would extend the solvency of Medicare (the real Medicare) well into the future.

It is critical in the upcoming debate over the deficit that Democrats refuse to allow the GOP to once again intentionally distort the fundamental difference between reining in the underlying costs of Medicare and cutting Medicare benefits.

Democrats and Progressives strongly favor reining in the growth of health care costs -- including the underlying costs of Medicare. We completely reject cuts in Medicare benefits.

Reining in costs does not involve cutting benefits -- it actually helps make sure that we don't cut benefits. And, in fact, while cutting benefits may reduce government spending, it would actually increase America's overall spending on health care.

By eliminating Medicare, the GOP not only fails to do anything to contain rising health care costs -- their plan actually makes matters worse.

The record shows that Medicare program is a great deal more efficient at delivering health care -- and controlling provider costs -- than private insurance companies. Only about six cents in every dollar goes to pay for administrative costs of the Medicare system. From $.25 to $.30 of each premium dollar goes to pay for administrative, overhead and profit of private insurance companies.

Private insurance companies pay for a lot of things that a public program like Medicare does not -- like marketing and sales, armies of bureaucrats that spend all their time denying claims, and the profits they hand over to Wall Street bankers and corporate CEO's.

And private insurance companies -- big as they are -- don't have the juice Medicare does to rein in the fees of medical providers.

All of that is why -- while Medicare costs escalated 400% from 1969 to 2009 -- there was a 700% increase in insurance rates charged by private insurance companies.

If you throw people out of Medicare's public insurance pool and force them to buy insurance from private insurance companies, the cost of providing health care to seniors and the disabled will skyrocket -- a fact confirmed by the non-partisan Congressional Budget Office.

The Republican budget plan actually increases the overall costs of delivering health care to seniors and the disabled, and it simultaneously shifts a greater percentage of those costs to individuals and their families. In other words, it is hard to imagine how the Republican plan could be much worse -- unless, of course, you're a private insurance company.

Just look at the now-infamous "Medicare Advantage" program where private insurance companies convinced Congress to let them provide care to Medicare recipients -- on the public dime -- because they said the "competition" would bring down cost. Turned out just the opposite was true. "Medicare Advantage" plans required a huge public subsidy compared with traditional Medicare. The Affordable Care Act eliminated those subsidies and that's precisely one of the reasons that it brings down the cost of Medicare. But, of course, the Republicans want to restore the "Medicare Advantage" subsidies by repealing the Affordable Care Act -- and ultimately eliminate Medicare entirely and replace it with a private "Medicare Advantage" on steroids.

There are many ways to control Medicare costs without cutting benefits. For one thing, we could allow Medicare to negotiate with pharmaceutical companies to bring down the costs of prescription drugs. Medicare is currently banned from negotiating the lowest prices for drugs in order to protect the profit margins of Big Pharma. The Veterans Administration has been negotiating these prices for some time and if Medicare received comparable savings, it would save the taxpayers about a quarter trillion dollars over the next decade.

That's a quarter-trillion dollars being siphoned out of the Medicare program that does nothing to add to the quality of the health care provided to older Americans. Its purpose is to provide a taxpayer subsidy for the big pharmaceutical companies.

So the Republicans want to force retirees to pay an additional $6,000 per year for health care, but at the same time they want to allow the drug companies to continue receiving a quarter-trillion-dollar subsidy out of the public purse. Unbelievable.

Finally, of course, the Republican budget takes the savings to the government that results by slashing Medicare benefits and hands that to the wealthiest Americans in the form of yet another tax break.

In other words the Republicans want to abolish Medicare in order to give tax breaks to the rich -- and they want to abolish Medicare to allow private insurance and pharmaceutical companies to make more money. That's the long and short of it.

Of course Republicans claim they aren't "abolishing" Medicare -- they're just "restructuring" Medicare. I admit that a jellyfish and an elephant have some things in common. Both, after all, are composed of living tissue. But a jellyfish is not an elephant.

Medicare and the Republican plan to provide partial support for private health insurance premiums are both health insurance programs. You can call it Partial Care, or Sort'a Care, or Maybe Care, or Private Care, or We-Don't Care -- but the Republican plan is not Medicare. It eliminates the essence of what people call Medicare: the public health insurance program that provides guaranteed benefits that most people in America love.

In last weekend's New York Times, a story appeared about a growing industry that provides very high-end -- super well-trained guard dogs to the wealthy -- for $230,000 each. "When she costs $230,000, as Julia did," the Times reports, "the preferred title is 'executive protection dog.' This 3-year-old German Shepherd, who commutes by private jet between a Minnesota estate and a home in Arizona, belongs to a canine caste that combines exalted pedigree, child-friendly cuddliness and arm-lacerating ferocity."

The Times says high-end dog training prices have "shot up thanks to the growing number of wealthy people around the world who like the security -- and status -- provided by a dog with the right credentials."

Now I am a great dog fan. I recently spent thousands of dollars at the vet to keep our two golden retrievers healthy. But buying a dog for a quarter-million dollars is ridiculous. It's what very rich people do when they have money to burn. It's what they do with the massive amount of wealth that has been siphoned over the last decade out of the pockets of middle class people -- whose incomes have stagnated -- into the hands of the top one percent of the population.

If you eliminate the Bush tax cuts for the wealthy and increase tax rates for millionaires and billionaires to levels no higher than they were when Ronald Reagan was president, you can make much of the federal budget deficit disappear over the next decade.

So in the end the Medicare issue gets down to this: the Republicans want everyday senior citizens -- who have a median income of $19,000 per year -- to pay $6,000 more each year in health care costs, so that very rich people can afford their quarter-million dollar dogs.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com. He is a partner in the firm Democracy Partners.
Follow him on Twitter @rbcreamer.

 
 
 

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