Thursday, August 27, 2009

Republican Party Chairman Michael Steele: Protect Medicare By Privatizing It

Updated Friday, August 28, 2009 @ 10:43AM

NPR [7 min 42 sec]
Republican Party Chairman Michael Steele opposes government-run health care insurance programs, as do most members of his party. In an exchange with National Public Radio's Steve Inskeep, Steele grew upset (4:45 into the audio clip) when Inskeep questioned the apparent contradiction in his arguments -- Steele argues both that the government shouldn't run public health insurance programs and that the Medicare public health insurance program must be protected. (That is, the part of Medicare already privatized by Republican controlled congresses over the past decade.)

Steele is attempting to argue that there is nothing contradictory about protecting Medicare by stopping the president from making Medicare operate more efficiently while also insisting that the government-run Medicare program is a failure and calling for it to be privatized.

At the beginning of this week RNC Chairman Michael Steele wrote an op-ed for the Washington Post, declaring the Republican Party to be the new protectors of the government run Medicare public health insurance program. He also this week appeared on Fox News and said:
... that Medicare is "a very good example of what we should not have happen with all of our health care." Asked to respond to Rep. Anthony Weiner’s (D-NY) argument that "if you like Medicare and you don’t want to make any cuts to it, then you’re basically defending a single payer system," Steele attacked Medicare implying that the government run Medicare public health insurance program should be privatized into the private health insurance industry:
I mean the reality of it is that, you know, this single payer program known as Medicare is a very good example of what we should not have happen with all of our health care.

... Government cannot run a health care system. They’ve already shown that. Trust the private markets to do it the right way. If there are reforms to be put in place, let’s deal specifically with those reforms.
The partial privatization of Medicare, that a Republican controlled Congress and the Bush Administration pushed on seniors as part of the 2003 Medicare Modernization Act, is costing U.S. taxpayers billions. It is the Privatized Medicare program (known as “Medicare Advantage” or “MA” plans) that Steele seeks to not only protect from reform, but also pushes to expand.

Under the "privatized" Medicare Advantage (MA) program, created by a Republican-led Congress in 2003 with the support of President Bush, the government buys private insurance coverage for Medicare patients in lieu of paying for health services directly. Republicans argue that by buying private insurance policies for seniors the government both saves money and delivers additional care to Medicare patients, including dental and eye services not covered under the traditional program. Those additional benefits, combined with a heavy dose of marketing, have made the program enormously popular. This year, a record-high 10.5 million seniors — or 23 percent of all Medicare beneficiaries — are enrolled in MA plans, according to a June report from the Medicare Payment Advisory Commission, or MedPAC, an independent panel that recommends Medicare reforms to Washington policymakers.
Despite Republican arguments that private Medicare plans operating under MA could eventually save money, the cost to treat the average patient in the MA program is 14 percent higher than the cost to treat the average senior under traditional Medicare.
A part of that additional cost, consists of funds used for MA plan administration overhead costs, marketing and profits and not direct health care services for beneficiaries. RNC Chair Steele, in his "protect Medicare argument," is actually arguing to protect this "privatized Medicare" program that subsidizes private health insurance industry profits, management bonuses, overhead and marketing.
The argument that private Medicare plans, subsidized by the government, are necessary to keep Medicare sustainable is belied by the fact that private plans cost taxpayers more than if the same coverage is provided under the standard public Medicare program where public money is not siphoned off into private profits, management bonuses, overhead and marketing.
Republican defenders of the privatized Medicare Advantage program on Capitol Hill have successfully thwarted most Democratic attempts in recent years reduce Medicare costs by reigning in the costs and abuses in the privatized Medicare Advantage program.
New York Times - Medicare Audits Show Problems in Private Plans : Tens of thousands of Medicare recipients have been victims of deceptive sales tactics, found they lack of coverage they thought their insurance policy provided and have had claims improperly denied by private insurers that run the huge new Medicare drug benefit program and offer other privatized Medicare Advantage program options, a review of scores of federal audits has found.
The Under the House health reform bill, which has already passed through the Energy and Commerce, Ways and Means, and Education and Labor committees — the three panels with jurisdiction over the issue — the privatized Medicare Advantage payments would be pulled back under public administration over several years in an attempt to eliminate the 14 percent cost overhead where public money is not siphoned off into private profits, management bonuses, overhead and marketing. The Congressional Budget Office estimates that the cuts will save taxpayers $156 billion over 10 years.

The White House has taken a different tack. As part of its 2010 budget proposal released in February, the Obama administration aimed to control MA costs by creating system that would require plans to bid competitively for regional contracts under MA. Those plans bidding higher than the regional average would nonetheless get paid only the regional average.
At an AARP-sponsored health reform forum last month, President Obama promoted his proposal saying, “We’ll eliminate billions in unwarranted subsidies to insurance companies in the Medicare Advantage program — giveaways that boost insurance company profits but don’t make you any healthier.”

President Obama's also commented at that AARP-hosted town hall that, "I got a letter the other day from a woman. She said, 'I don't want government-run health care. I don't want socialized medicine. And don't touch my Medicare.' I wanted to say, you know, that's what Medicare is: a government-run health care plan that people are very happy with."
The lady that wrote, "don't touch my Medicare" was likely referring to her Medicare Advantage paid private health insurance policy. Those opposed to health insurance reform have been telling seniors that Democrats will eliminate or drastically cut health care coverage for those seniors that have a Medicare Advantage paid private health insurance policy. This is the fear that GOP Chair Michael Steele is attempting to stoke in his rhetoric about "protecting Medicare."
If the Democrats are successful in their efforts to reform the privatized Medicare Advantage program, it could mark a set-back to the decades-old Republican push to fullly privatize Medicare. In October 1995, for example, then-House Speaker Newt Gingrich (R-Ga.) took the podium at a Blue Cross/Blue Shield conference in Washington and promoted a health reform strategy he knew would be music to his audience. Labeling Medicare “a centralized command bureaucracy,” Gingrich proposed to shift the popular program from “a government monopoly plan” to a fully privatized “free-market plan.” [Washington Independent]
RNC Chair Michael Steele has been advocating this week in his media blitz to protect the “free-market" privatized Medicare beachhead established in 2003 when the Republican congress and Bush White House worked together to enact the Medicare Modernization Act.
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