Privatizing Medicare

Medicare, the crown jewel in Lyndon Johnson’s War on Poverty and one of the government’s most popular programs, has been torpedoed under the guise of "improving" it. Its demise comes as the consequence of stealth legislation ruthlessly rammed through Congress by conservative Republicans and a few Democrats. "Government by Juggernaut," editorialized The Washington Post.

The United States is the only industrialized nation that does not have universal health care. Only in America is health care treated as a profit-making venture, and the new Medicare bill was designed precisely with that as its guiding principle.

Consider these facts about Medicare:

• Since its inception in 1965, this program has reduced poverty among the elderly by nearly two-thirds.

• Contrary to Medicare opponents, the program is not going broke. The Medicare Part A Trust Fund (which is financed through payroll taxes paid by workers and employers) will maintain a positive balance through 2026, according to the Medicare Board of Trustees.

• Medicare’s administrative costs are only 2 to 3 percent, in contrast to private insurance—Health Maintenance Organizations (HMOs) and Preferred Provider Options (PPOs)—costs of 9.5 percent.

A major yet easily correctable defect in existing Medicare is the lack of a prescription drug benefit. Advocates of Medicare reform exploited this vulnerability by offering a drug benefit as the highlight of its legislation. But is this actually good news? New York Times columnist Paul Krugman wrote, "As the Center on Budget and Policy Priorities points out, the bill will force millions of beneficiaries to pay more for drugs, thanks to a provision that cuts off supplemental aid from Medicaid."

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Sojourners Magazine February 2004
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