Talking Turkey About Medicare

For 40 years, Medicare has offered older Americans and Americans with disabilities affordable access to needed health care because the private marketplace is unable to meet their needs. Yet, defying practical experience, Congressional ideologues decided to turn the new prescription drug benefit exclusively over to private insurers and HMOs.

Why did this happen? What can we do about it? It's time to talk turkey about Medicare.

This Thanksgiving learn from the wisest members of your family why they value Medicare so much, how it works and what it would be like to live without it. You will likely find that what they love about Medicare is its affordability, reliability and vast choice of doctors and hospitals.

Medicare offers the most cost-effective health care coverage in America. It has low administrative costs (2 percent as compared with around 25 percent for most private health insurers) and can leverage 15 percent lower doctor and hospital fees than private health insurers pay. This enables Medicare to deliver health care with fewer taxpayer dollars than private insurers.

Moreover, Medicare brings everyone together in one insurance pool, protecting everyone collectively-the healthy and the sick, the poor and the wealthy, people in the red states and those in the blue ones. Everyone pays the same price regardless of the amount of care they need. People with heart disease, cancer and diabetes do not have to choose between critical care and other necessities.

But President Bush and the Congressional leadership ignored the lessons of Medicare's first 40 years and gambled that, with hundreds of billions of dollars in subsidies, insurance companies could deliver the drug benefit.

They barred Medicare from using its negotiating leverage to deliver a cost-effective benefit and got drug prices from the drug plans that are substantially higher than what the Department of Veterans Affairs or the Canadian government pay.

They pushed for a choice of drug plans and got hundreds of profiteering plans all offering a limited choice of drugs.

They junked Medicare's core principles-universal access and a standard benefit-and got a system that steers healthy people to cheap plans and sicker people to expensive ones, segmenting the insurance pool and making the sick pay more.

And they refused to give Americans with Medicare even the choice of a Medicare drug benefit, forcing people instead to sign up for a private for-profit insurance plan if they want help with their drug costs.

So now Americans with Medicare, people who desperately need affordable medications, are faced with a dizzying assortment of private drug plan options that are impossible to decipher and provide poor protection from the high cost of life-preserving and life-saving medications. Unlike Medicare benefits, this private prescription drug benefit leaves even the experts wondering whether people will be helped if they enroll in it.

The turkeys are coming home to roost.

Let our Congressional leaders know that you value Medicare because it works better than private insurance and you want a Medicare drug benefit-a government-administered benefit that is cost-effective, reliable, affordable and guarantees our parents and grandparents access to the medications they need.

Moral, financial and medical imperatives must drive us to strengthen the Medicare that has worked efficiently and effectively for 40 years, not abandon America's most vulnerable men and women to fend for themselves in the private and ineffective health care marketplace.

Click here to send a letter to your members of Congress telling them you value Medicare because it's simple, automatic and reliable, and that you want a real government-administered Medicare drug benefit.

Medical Record

Medicare helps people live longer, healthier lives:

• Before Medicare went into effect, only half of older adults had health insurance ("Testimony: Regarding Strengthening and Improving Medicare," Barbara Kennelly, National Committee to Preserve Social Security and Medicare, U.S. House Energy and Commerce Committee Subcommittee on Health, April 9, 2003).
  
  
• People with no health insurance forgo needed health care and die earlier. The uninsured are less likely to receive preventive care than those with insurance and more likely to be hospitalized for conditions that could have been avoided. Consequently, uninsured cancer patients are diagnosed later and die earlier than those with insurance ("The Uninsured and Their Access to Health Care," Kaiser Commission on Medicaid and the Uninsured, November 2005).

Medicare keeps people out of poverty:

• Since Medicare was created in 1965, poverty among older Americans has been reduced by nearly two-thirds ("America's Seniors and Medicare: Challenges for Today and Tomorrow-A State-by-State Status Report," National Economic Council/Domestic Policy Council, The White House, February 29, 2000).

Original Medicare is simple, popular and reliable:

• Focus groups reveal that older Americans are "very satisfied" with the Medicare program, with many citing choice of providers as a key reason. In contrast, notions of changing or privatizing the Medicare program are "very negatively received." Focus group participants have a generally favorable reaction to the concept of "choice," but usually define choice in terms of choice of doctors, rather than choice of plans (Peter D. Hart Research Associates, July 2001).
  
  
• Private plans routinely limit access to care for people with Medicare. Private plans limit choice of doctors, restrict access to specialists and have a history of leaving members out in the cold: between 1999 and the beginning of 2003, private plans ended coverage for 2.4 million members, forcing them to scramble to find new Medicare coverage (Public Citizen, February 2003).

Original Medicare is cost-effective:

• In 2003, the administrative costs of government Medicare were calculated at 2 percent, while those of Medicare private plans were calculated to be at 11 percent. Administrative costs for insurers may include marketing, claims processing, reserves and profit ("Medicare Cost-Sharing and Supplemental Insurance," Medicare Payment Advisory Commission, May 2003).
  
  
• Medicare pays on average 107 percent more per head for people in Medicare private plans than in the Original Medicare fee-for-service in 2004. ("M+C Payment Rates Compared with County Medicare Per Capita Fee-For-Service Spending (Revised)," Medicare Payment Advisory Commission, April 2004).
  
  
• Private plans offer little in the way of cost containment. Comparing growth in per-enrollee payments for comparable services by private plans and Medicare, studies have also shown that private plans are less successful in controlling costs than Medicare: whereas Medicare per-enrollee spending grew by 9.6 percent per year from 1970 to 2000, private plan per-enrollee spending grew by 11.1 percent per year (Boccuti & Moon, Health Affairs, March/April 2003).

Original Medicare makes market sense:

• Securing health insurance is a problem for many people ages 55 to 64. Nearly 3.5 million Americans in this age group are uninsured (Kaiser Commission on Medicaid and the Uninsured, December 2003). Of these uninsured adults, over 1.5 million have a chronic condition (Center on an Aging Society, Georgetown University, September 2003).
• Private Medicare drug plans fail to provide meaningful drug cost savings compared to drug prices negotiated by Canada and the Department of Veterans Affairs. Using a market basket of the 10 most popular drugs used by people with Medicare, a report prepared for Representative Henry Waxman, Democrat of California, found that the leading Medicare drug plans are over 80 percent higher than the prices negotiated by the federal government; over 60 percent higher than the prices available to consumers in Canada; over 3 percent higher than the prices available on Drugstore.com; and almost 3 percent higher than the prices available at Costco ("New Drug Benefit Questioned," Washington Post, November 23, 2005).

Fast Relief

The Medicare Rights Center, with support from the Brookdale Foundation, is offering an Rx hotline (877-RXHELP-0) for nonprofit professionals who serve people with Medicare.

If you need help understanding or explaining the new Medicare prescription drug benefit to your clients, call RxHelp, a national hotline dedicated for nonprofit professionals serving the Medicare population, operated from 10 a.m. to 6 p.m.

Dial 877-RXHELP-0 (877-794-3570) today!