Conservative Schemes Sickened Medicare

Medicare proves the success of progressive health care policy. Before Medicare, approximately half of America’s seniors lacked health insurance; today, virtually everyone over age 65 is covered by Medicare. [Kaiser Family Foundation [3]] Because Medicare is a health-care-for-all plan for the elderly, it allows the government to pool risk and lower costs. As a result, Medicare beneficiaries report a high level of satisfaction with the program. [Johns Hopkins Medicine [4]]

Conservatives are wrong about the challenges facing Medicare. Conservatives argue that rising enrollment in Medicare is driving up costs. However, the Congressional Budget Office has reported that “the aging of the population…accounts for only a modest fraction of the growth” in Medicare costs. The main factor is the growth of health care costs—the extent to which the increase in health care costs has exceeded the growth of the economy. [CBO [5]] In fact, health expenditures as a percent of GDP have more than doubled since 1970, growing from 7.0 percent to 14.8 percent in 2002. [CBO [6]] So the solution is not to cut benefits or recipients but to hold down health care costs.

Conservative attempts to privatize Medicare have been disastrous. President Bush’s Medicare prescription drug plan forced seniors to deal with hundreds of private insurers and prohibited the government from negotiating lower drug prices. The plan’s “doughnut hole” saddled 3.4 million Medicare beneficiaries with high drug costs. [Kaiser Family Foundation [3]] Its prohibition on drug-price negotiation costs the government an estimated $90 billion annually. [Center for Economic and Policy Research [7]] In addition, costs in the Bush Administration’s privatized “Medicare Advantage” plans are rising twice as fast as costs in traditional Medicare, according to the Government Accountability Office, the Congressional Budget Office, and the Medicare Payment Advisory Commission. [Congressional Quarterly [8]] Essentially, we are subsidizing insurance companies to help them compete against Medicare. Health care privatization simply doesn’t work.

Conservatives promise more attacks on Medicare. John McCain’s health care plan calls for almost $900 billion is cuts to Medicare over 10 years, an amount that roughly equals the program’s entire budget for nursing home care. [Center for American Progress [9]] McCain’s cuts would require reductions in benefits, an increase in the Medicare eligibility age, or both, and would lead to higher costs for private insurance as well.