Bush's Parting Shots to the Old and Sick, Part 1: A Gift to Privatized Medicare

| Wed Jan. 14, 2009 12:05 PM PST

Having spent eight years bypassing the laws of the land via signing statements, executive orders, or just simple denial, the Bush Administration is adding to its grim legacy with a rush of last-minute orders and rule changes. Compiled here by ThinkProgress, these include a number of actions aimed at the elderly, ill, and disabled--including cuts to Medicaid and disabled veterans' benefits. These last-ditch measures are likely to turn into some of the first political and policy challanges faced the Obama administration.

Some of Bush's parting shots are so low-profile that they might easily escape notice. The latest of these arrived on Friday in the obscure form of a "call letter" to private insurance companies that want to contract with Medicare to provide health and drug coverage in 2010. Such calls are issued annually. But this time the call letter was released two weeks earlier than it was last year, and two months earlier than the previous year--ahead of the changing of the White House guard. Medicare advocacy groups view the early release as "an attempt by the Centers for Medicare & Medicaid Services (CMS) to assure continued leniency in the oversight of private plans for at least another year and as a last-ditch effort to promote private Medicare Advantage plans."

Medicare Advantage (MA) plans--which offer managed care run through private insurers, paid for by the federal government--are the point of the stake that conservatives have long been trying to drive into the heart of traditional Medicare (which, for all its shortcomings, is the closest thing to a single-payer program that this country has ever seen). Columnist Saul Friedman recently wrote about the history of of this effort, recalling a 1995 press briefing in which Dick Armey, Newt Gingrich's collaborator on the "Contract With America," announced their intent to "wean our old people away from Medicare." The first step was to introduce private Medicare HMOs--what later evolved into Medicare Advantage plans, with a big boost from the Republicans' 2003 Medicare bill.

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MA plans have come under increasing fire for their hard-sell tactics to elderly Medicare recipients, shoddy coverage, and rip-offs of the public purse. "Competition" from the private plans was supposed to reduce growth in Medicare spending--but in fact, they cost the government more. A September report from the Commonwealth Fund calculated that "payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare–-an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004-2008, extra payments to MA plans are estimated to have totaled nearly $33 billion."

According to the Medicare advocacy groups, the call letter reflects few of the demands critics say are needed to ensure that the government gets what it pays for–-and that old and disabled people get the decent coverage they need.

"The draft Call Letter issued today is another example of how CMS has failed to properly oversee private Medicare plans that receive billions of dollars above traditional Medicare without providing the extra benefits they tout," Judith Stein, Executive Director of the Center for Medicare Advocacy says. "For example, the CMS Call Letter does not require private Medicare plans to coordinate care and sets no standards for those that purport to do so."…

"We are dismayed that the current administration of CMS has failed to issue a Call Letter that protects beneficiaries and taxpayers by describing in detail what is expected by private Medicare plans," says Kevin Prindiville, staff attorney with the National Senior Citizens Law Center. "We ask the incoming administrator of CMS to rescind the current Call Letter and issue a new document that demonstrates that CMS will exercise appropriate oversight over private insurance plans."

What happens with Medicare Advantage plans–-along with the privatized Medicare Part D prescription drug benefit–-should be of interest to Americans of all ages, and not just oldsters, since it will almost certainly mark the Democrats' first showdown on health care. Tom Daschle's comments on Medicare Advantage plans, in confirmation hearings last week, indicated that the private insurers might have reason to worry about their profit margins, but hardly need fear for their continued access to the Medicare market:

I think it's become a much more expensive option, unfortunately--13 percent more expensive. And I think we have to look at whether or not we're getting our money's worth.

And the President-elect has said that he thinks it's important for us to look at the--at the inefficiencies and the problems associated with spending in Medicare Advantage and address them.

A somewhat stronger statement came from a powerful voice among Congressional Democrats, who will ultimately determine what happens in this area:

Rep. Pete Stark (D., Calif.), chairman of the powerful House Ways and Means Health Subcommittee, says President George Bush and Republican lawmakers spent the past eight years "trying to privatize Medicare and turn it into a new voucher system."

"I think that was wrong, and now we have to correct that," he says in an interview.

How the new administration and Congress deal with Medicare will be a test of their moxie in dealing with health care reform in general. Creating any sort of health care system that gets Americans better care for better prices will require that the Democrats take a stand against the interests of the insurance and pharmaceutical companies. And if they can't do it for us geezers, it doesn't look good for everyone else.

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