Paul Krugman: Money for Children or Health Insurance Companies

There are many reasons to criticize George Bush’s Medicare plan, which primarily provides financial rewards to the pharmaceutical and insurance industries for their political support. While most of the publicity has been about the prescription drug coverage, a less well-known aspect of the plan is increased subsidies to insurance companies which offer Medicare HMO’s. These Medicare Advantage plans cost more to care for patients despite cherry picking the healthier patients. They are being sold to elderly Medicare patients by salespeople who tell they all types of lies in order to make their commission. Paul Krugman also complains that the money used for Bush’s Medicare plan could be better used to provide medical care to the eight million uninsured children in this country. Krugman reviews the faults in the Medicare Advantage plans:

According to Medpac, the official nonpartisan commission that assesses Medicare payments, Medicare Advantage plans now cost taxpayers an average of 12 percent more per enrollee than traditional Medicare. Private fee-for-service plans, the fastest-growing type, cost 19 percent extra.

As I said, it’s hard to see how anyone can, in good conscience, think that preserving subsidies to insurance companies is more important than providing health care for children. But that is, of course, exactly the position taken by the Bush administration, which is adamantly opposed both to any attempt to expand the children’s health insurance program — in fact, the administration wants to cut its reach — and to any attempt to reduce Medicare Advantage payments.

The official reasons given for this position are evasive and dishonest.

Explaining the administration’s opposition to expanding the children’s program, Michael Leavitt, the secretary of health and human services, said the program “should not be the vehicle by which we insure every adult and every child in America.” But that isn’t what the Democrats are proposing.

As for why the administration wants to keep subsidizing insurance companies, Mr. Leavitt says, “The president and I are for competition.” But nobody is against competition — it’s subsidized competition that’s the problem. Mr. Leavitt added that “the marketplace beats the government at controlling costs and delivering value” — but he’s not willing to put that assertion to the test by requiring that private insurers compete on a level playing field.

Lately, both the insurance lobby and the administration have also started playing the race card, claiming that Medicare Advantage offers special benefits to the poor and to minority groups. (Remember how Social Security was supposed to be bad for black people?) But a new report from the Center on Budget and Policy Priorities thoroughly debunks these claims: low-income and minority seniors are less likely than the average Medicare recipient to be enrolled in a Medicare Advantage plan.

Be Sociable, Share!

1 Comment

  1. 1
    becky says:

    Please someone out there pick up on the fact that independent pharmacies aren’t getting paid by medicare and when they do it will be below their cost.please help before your local pharmacy closes it’s doors.

Leave a comment