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Medicare is in Trouble, Be Ready to Defend It
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Medicare is in Trouble, Be Ready to Defend it

Miriam Dinerman, DSW, NASW-NYC Board Member and Marcia Poston, LCSW, Co-Founder/Clinical Director of the Second Wind, members of Rekindling Reform

June 2008


In 2003, a Republican-dominated Congress passed the Medicare Modernization Act which instituted the new pharmaceutical benefit program, although it forbad the Government from using its purchasing power to negotiate lower prices for those pharmaceuticals. It also began a series of very damaging changes, based on a fairly explicit desire to get rid of Medicare as a social insurance program which they ideologically opposed. The Medicare Modernization Act does the following damage:

1. It enacted a law that no more than 45% of the total cost of Medicare may come from general tax revenue. When it appears that this ceiling will be breached, Congress must either cut Medicaid services so as to live within the budget ceiling or raise premiums paid by Medicare recipients and/or raise the dedicated tax that all workers now pay for Medicare. This ceiling on the Medicare costs must be removed, and we must return to the prior method of paying for Medicare, in place since its inception. Now, Congress every year or two enacts needed changes in taxes and revenue sources to cover Medicare costs. In other words, return to the prior arrangements which have worked very well since 1965.

2. The MMA also created so-called Medicare Advantage plans, to manage the new drug benefit. What Congress did, in addition, was write in a bonus for private insurance companies of 12-19% over the sum paid traditional Medicare. If private insurance cannot compete with Medicare, then let Medicare do the job, and save the government all that extra money paid to private, for-profit drug insurers.

3. Further, the MMA changed the payment system for citizens for Medicare Part B.

This covers physician and out-of-hospital care. Monthly premiums were to be based on yearly income rather than all Americans paying the same fixed amount. This needs to be undone as it may well threaten political support for Medicare if high-income tax payers face large Medicare taxes, as large as the sum they might pay for private insurance.

4. In addition, Congress decided upon a so-called Premium Support Experiment. Six yet-to-be determined metropolitan areas will be chosen and all of their residents will be given a voucher for a defined contribution which they can use to purchase private health insurance. No one knows if the voucher will be worth enough to cover private insurance equivalent to Medicare benefits. This so-called experiment must be cancelled so as not to endanger health insurance coverage for Americans.

5. Another old idea will be instituted. Health Savings Accounts will be established so people can set up their own accounts, with a tax write-off to help, and will presumably no longer need a public program to cover health insurance.

We urge social workers to write to your Congress person and your Senators. Tell them that the provisions of the Medicare Modernization Act must all be undone. In 2007 the House did this but the Senate failed to pass the bill so the legislation died. We must make sure that this time, when the issues come up again, that Medicare is protected and these very harmful provisions are undone.

In all of the debates over health care in the coming election, do not let Medicare be destroyed, as our one most effective social health insurance program is in need of our protection.


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