EDITORIAL
Medicare “Reform”—In the Service of Big Business

Jun 23, 2003

The U.S. House and Senate have each passed a version of a Medicare "reform" bill, aimed, so they say, at providing drug coverage to seniors and other people covered by Medicare.

Like other Medicare provisions, the drug coverage is incredibly complicated–but one thing comes out very clear: the majority of Medicare recipients will pay MORE money into the program than they will get back in drug coverage. Under the Senate version, you must pay out $695 a year in premiums and deductibles ($670 in the House version) before you see even one cent from Medicare for your prescriptions. Beyond that, in both versions, Medicare will not pick up much of your drug costs until after you have paid $3700 a year out of your own pocket.

This is hardly a "reform"–if by "reform" we mean an improvement for the population. No, this so-called "reform" aims not at improving life for the population, but at improving profits for a large number of corporations.

Large companies whose pension plan provides drug benefits are applauding this "reform." Of course. Part of their costs will now be picked up by Medicare, whose insurance premiums will be paid for by the retirees, not by the big companies. The auto companies, with contracts coming up this year, couldn’t be more pleased. This reform will let them shift money out of their pension’s medical plan. And, by contrast to the rest of Medicare, the companies pay no contribution into the program at all.

Insurance companies will benefit. Arguing that private industry is more efficient than bureaucratic-laden government, the politicians designated the private, for-profit insurance industry to administer the new program, just as it today administers Medicare. This blatant lie about private industry efficiency has been disproved many times over by Canada, whose nationalized medical insurance system, run by the government, uses up only 9% of the total cost of health care in administrative costs. In the United States, where the private insurance industry administers the medical care system, such costs average out to 20% of total health care costs. It couldn’t be otherwise. Not only do all the different companies mean duplication and thus waste of money. The aim of private insurance companies that administer the program is not to extend medical care to more people, but to skim off as much of the proceeds of Medicare as they can for their own profit.

The pharmaceutical industry, whose profits are already the highest in the country, are already salivating at the thought of even bigger profits. There’s nothing in this so-called "reform" that would limit the prices the industry charges–prices which are often twice as high as what these same companies charge in Canada, which controls prices somewhat.

Medicare was brought into being as one answer to the vast social movements of the 1960s. At the beginning, coverage for medical procedures used by seniors was nearly full. But as profit-making industries put their talons more deeply into the program, and as the receding of social movements emboldened the bosses, prices and profits skyrocketed. The government responded with "reform" after "reform" of the system to control costs–not by controlling prices and profits but by reducing what Medicare would pay for and by increasing premiums and deductibles, year after year.

As a result, seniors pay more and more of their medical expenses themselves. Today, even with Medicare, seniors pay out a MUCH BIGGER SHARE of their retirement income on medical expenses than they did before Medicare existed.

The government "reformed" away most of the benefits of the program for the population, leaving only the benefits to the medical care and insurance industries.

This new "reform" is just another trick for turning medical care into an even bigger cash cow for big business.

The U.S. continues to be way behind the rest of the industrialized world when it comes to medical care. In this, the wealthiest country in the world, we pay much MORE for medical care than do ordinary working people in other countries, and we get much LESS back for it.

This will not be changed by one more fake "reform." The one thing which can challenge this situation is the same thing that forced the government to establish Medicare in the 1960s, or Social Security and Unemployment insurance in the 1930s: social movements of the working population demanding that their needs be met.

Working people before us confronted these same profit-making bosses and their government. Not only did they show that it was possible, through their struggles, to put their hands on some of those profits, using them for the benefit of the whole laboring population. They showed that such struggles are the only way that something beneficial can be won.