The Scapegoating of Low-Income Seniors
For many months I have been astounded by the absurdity of those Americans who equate Obama’s Private Insurance Bailout Bill with communism or socialism. A reader of an op-ed piece of mine wrote me explaining she had demonstrated against Obama’s health plan because she was opposed to socialism. I said she must mean “National Socialism,” and I’d protest that too. A government that legislates increased profits and price deregulation for the nation’s largest capitalist corporations, while passing laws that require the entire population to purchase the products of those particular for-profit enterprises, is more often associated with fascism—particularly when the national economy is dependent upon military production and requires cuts in social welfare programs, public infrastructure maintenance, and workers’ real wages.
Why would anyone label “socialist” an administration occupied by the recycled big-shot representatives from prominent capitalist enterprises—preoccupied with bailing out capitalist financial institutions and other too-big-to-fail manufacturers at the expense of worker’s benefits and savings? I finally got an answer that does make some sense, however much I may disagree. The argument for why this new health insurance law will lead to socialism is now being articulated with complete confidence on the nightly conservative talk-radio. It goes like this:
Attempting to cover millions of new patients on Medicaid, plus covering the ER expenses of those hundredss of thousands who prefer paying a small fine rather than paying expensive premiums, high deductibles and private health insurance co-pays, will assure Obamacare is doomed to failure. It won’t work, way too expensive. And that will provide the perfect excuse for the Democrats to convert healthcare coverage to a government administered and funded Universal Healthcare System! That is how those who back the bill intend to usher in socialism.
I was struck by how closely this argument resembles the rationale used by those progressives insisting on using the slogan “Medicare For All!” when they know how inadequate Medicare is. They insist they really mean “expanded” Medicare for all, not the traditional Medicare as it exists today. Not the actual Medicare that requires low-income elderly to purchase a private supplemental plan in order to cover unaffordable deductibles and co-pays; plus purchase yet an additional private plan to cover drug costs which traditional Medicare does not cover at all. (All that, and the elderly on traditional Medicare still have no coverage for annual physical exams; no vision exams, no hearing exams, no eyeglasses, no hearing aids, no dental coverage. Well, why would the elderly need such services anyway?!) But, this Medicare as it actually exists today, is not the “Medicare For All” progressives tell me they are talking about. They are referring to an “expanded” Medicare plan. And how do they suggest making Medicare over so that it provides comprehensive and affordable health care for the elderly and “All?” Well, this is how it was explained to me:
When traditional Medicare becomes an option available to all, millions of insured and uninsured Americans will choose to join the poorest elderly in this miserably inadequate healthcare program. Soon there will be protests across the nation attacking Medicare’s inadequacies and unaffordable costs, and demanding comprehensive, affordable heath coverage. The many who have joined the elderly on Medicare will revolt, and the government will be forced to provide Universal Healthcare For All.
And after that, the State will wither away. The right-wing’s nightmare is the progressives’ wet dream! I could laugh, if this delusional thinking had not distracted from what Obama had made clear was really on the table, and abetted passage of huge funding cuts to the once affordable and comprehensive Medicare Advantage HMO plan, doubling the cost of premiums and drugs, and increasing co-pays for millions of low-income elderly
Aside from that, both Left and Right predictions are based on an unreal understanding of howapitalism is facing the worst depression in history, one that has been building up and dragging on for decades in spite of occasional “bubbles” and government interventions. The task at hand is to reallocate as much of the national wealth and resources as possible away from social consumption and into the pockets and profits of the private sector. The working agenda is privatization of everything from schools and hospitals to prisons, the military and social security. Increased profitability is the goal. And the health reform bill is a big step toward that goal.
Many journalists focus on the enormity of the mass of profits earned by the insurance companies. However, that is not what is most significant to insurance companies, anymore than the lump sum returned on any investment would be in determining an individual’s choice of where to bank their money. One wants to know the rate of interest to be earned. Rates of profit for the insurance companies, as with many US industries, have not been “competitive,” for sometime. In October 2009, AP writer Calvin Woodward reported declining rates of profit “in spite of skyrocketing premiums. Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries.” Drugs, medical products and services were in the top ten! Industries with much higher rates of profit were the producers of communications equipment (20 per cent profit margin), and the railroads (12.6 per cent profit margin). Some in the health insurance field, like UnitedHealth Group and HealthSpring posted 5 per cent - 5.4 per cent rate of profit, a little higher than Jack in the Box restaurants at 4 per cent . “That’s a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach and Molson and Coors beers.” (AP: 10/21/2009)
The Report to Congress: Medicare Payment Policy of March 2010 also estimates the average rate of profit for Medicare Advantage (MA) plans to be around 6 per cent . Unfortunately, they aggregate data from the inefficient and costly MA plans together with the plan they identify as efficient and less costly than traditional Medicare—Medicare Advantage HMO. The 2009 Report (pp. 251, 258, 265) states that Medicare Advantage HMO provides services more efficiently and “for less cost” than traditional Medicare, and the 2010 Report (pp. 265, 269, 270) reconfirms that. So, it may be that the rate of profit for the much more tightly run and regulated MA HMO plan had an even lower rate of profit than the other fee-for-service MA plans, adding to the incentive to trade that source of federal funding for a much more lucrative, globally mandated market of previously uninsured customers now required to purchase more expensive and less efficient private insurance plans.The Report’s aggregated data cannot be used to rule out this possibility.
What I call a bailout bill for private insurance corporations, Glen Ford of Black Agenda Report calls a “private insurance subsidy plan.” Harvard’s Dr. Steffie Woolhandler, who co-founded Physicians for a National Health Care Program, also complains that the bill passed provides new subsidies for private insurance companies. In a recent interview she stated, “Government should not be handing taxes over to private industry; taxpayers have no power over private industry!” She concurred with what I and others have reported, that the “insurance corporations were very much involved in writing this bill,” and put in loopholes wherever they could. One loophole she cites: Those over the age of 55 can be charged three times as much as a younger adult.
Woolhandler stresses that providers’ charges will go up, resulting in insurance companies “naturally” raising their premiums. She also bemoaned the fact that 23 million Americans will still be uninsured by 2019, and that those who don’t buy private health insurance will be fined. There are no subsidies for individuals making over $44,000 a year, she says. Trudy Lieberman, contributing editor to the Columbia Journalism Review, agrees that federal subsidies, just like those of the Massachusetts prototype, will be inadequate for middle and upper middle income people: “In Massachusetts it is still too expensive for many people, and it will be when the Federal government takes over.” She notes that whereas in Massachusetts older people can be charged twice as much as younger adults choosing from the “State Connector” private insurance plans, under the “Federal Exchanges” private insurance choices, older people can be charged three times as much.
When Dr. Woolhandler was asked “what’s next?” this prominent advocate of “Medicare for All” predicted, “There will be a resurgent movement for Universal Health Care!” The cause for conservative night terrors is the mirror image of the progressives’ passionate dreams.
During the so-called “debates,” neither the right-wing or the left-wing activists or pundits addressed the ongoing scapegoating and targeting of low-income senior citizens across the nation. At the president’s “invitation,” the leading CEOs of the largest insurance corporations set up offices in DC during most of 2009. By November 2009, huge cuts in funding to Medicare Advantage HMO were already being experienced by the elderly who received notice of insurance increases for their 2010 premiums (as high as 52 per cent ), co-pays and drug costs. Letters, phone calls, emails, directed over the past year to US Senators and Representatives; to the Boston Globe, Boston Herald and New York Times; to NPR’s Tom Ashbrook and Diane Rehm, and to Democracy Now, and even to local politicians and the governor, telling them about the immediate and predicted outrageous consequences from the “reform” process for the elderly, resulted in NADA! No response.
A few days before the big Sunday vote, NPR’s Juan Williams ventured to comment, “You know who’s really upset about this proposed bill are the seniors? They can’t believe that there will be $500 billion cut from Medicare funding and it will not result in fewer benefits and higher prices for them.” Really? And by the end of the week, the DR show host was inquiring about “what changes there will be to Medicare Advantage.” Diane Rehm was assured by her guest that the elderly would see higher premiums, loss of benefits, and higher co-pays. But, she emphasized, the insurance companies would not lose out, because they are going to gain much more than they are giving up (in funding to Medicare Advantage plans) “through newly insured.”
The DR Show guest obviously felt compelled to repeat the Obama administration’s misleading propaganda that Medicare Advantage cost the government more than FFS [traditional Part A & B] Medicare. As I have pointed out, ad nauseam, Medicare Advantage HMO is “able to cover the same services as the traditional Medicare Part A and B benefit at a lower cost.” (Report to Congress, 2009 & 2010). Cuts to this program are one way of carrying out the reallocation of national wealth and resources away from government spending on social programs ant over to private corporations income and profits. This is not socialism. It is as close to a bailout of yet another large private “industry” as the administration can get without admitting what is being done.
After the bill’s successful passage, the Boston Globe could now report “significant cuts to plans under a program called Medicare Advantage, which are offered through insurance companies and provide extra benefits. The cuts could prompt insurers to stop offering many of the plans or reduce benefits, and many elderly people are expected to switch to traditional Medicare fee-for-service coverage.”
The New York Times made no attempt to highlight the impact of the insurance reform bill on low-income elderly, simply noting that “Medicare benefits will be squeezed by nearly $500 billion over 10 years, including $116 billion in cuts to subsidies for privately offered Medicare Advantage plans” plus an additional cut of $16 billion to Medicare Advantage plans through the reconciliation bill.
Seniors have until March 31, 2010 to change plans if they can no longer afford their comprehensive, but now more expensive, Medicare Advantage HMO. Ten days before the “Historic Vote,” there was a large meeting at my local Counsel On Aging to discuss “Health Plan Options for People With Medicare.” The woman sitting next to me whispered in my ear, “Can you believe that people tell me I am lucky to be on Medicare because it is free?!” Yep, I can believe it. And those doctors and nurses waving their “Medicare For All” signs have done nothing to discourage this myth or to inform the public about what Medicare actually costs, what it doesn’t cover, and how awfully inadequate it really is. My fellow senior citizen and I both agreed we would not wish traditional Medicare on our enemies. Why? Need I remind you that Traditional Medicare does not provide coverage for annual physicals, drugs, eye exams, hearing exams, eyeglasses, hearing aides, or dental exams. (Except for dental coverage, these are the “extras” covered in MA HMO.) Traditional Medicare also requires costly deductibles, and out-of-pocket payments for services ranging from 20 per cent - 50 per cent of the medical providers fee.
Those who have only traditional Medicare often choose to forego medical treatment. These unfortunate individuals can purchase an additional, private “Medigap” plan which covers the percentage of medical expenses traditional Medicare does not. These expensive “Medigap” plans (e.g. Blue Cross charges $172.81 a month for its better plan), do not expand the kinds of limited services covered by traditional Medicare. And drug coverage must be purchased from yet another private plan! All of this on top of the $96.50 monthly premium everyone on traditional Medicare must pay for Part B. So we are looking at a monthly health insurance bill of between $300 – $400 for low-income seniors (surviving on social security checks averaging $1065 per month) if they want insurance coverage for expenses not paid for by Traditional Medicare and if they want drug coverage—all of which is provided for under Medicare Advantage HMO at a much lower monthly premium, in spite of the recent premium increases! This is double what many union members are now paying and rightfully complaining about as their health care benefits are increasingly compromised. And it’s more than what members of Congress pay for their “Cadillac plans.” In Massachusetts, we do still have a “free care” or “safety net” insurance program for extremely low income seniors who only have traditional Medicare Parts A & B, which is accepted at particular clinics and hospitals receiving State and Federal funding.
In responding to an email from Dr. Margaret Flowers, a founder of Physicians for a National Health Program, justifying the “Medicare For All” slogan, I suggested that those of us who would like to see a social, political, and economic revolution — and I believe that is what it would take to realize “publicly financed,” cost and price regulated, comprehensive health care for all our citizens — need to be mindful of the material reality of the most vulnerable in our society. Universal Single-Payer Healthcare is where we want to end up. Clearly, that is not where we begin; particularly not when the economy is sliding downhill and moving closer to the edge of another cliff. Often the most vulnerable and poor are trampled underfoot by the rush of middle and upper class Progressive ideologues.
A more realistic model, without draconian assaults on low-income seniors, would be to start by demanding the preservation of all the benefits of the most popular and most efficient Medicare Advantage HMO plan. Demand that dental benefits be added to that plan, and that funding be restored, and the cost of premiums and drugs be rolled back to pre-2010 prices; and that that MA HMO plan be expanded to cover all. Medicare Advantage HMO for All! Then we would have a platform for educating people about what Medicare really is and what is necessary and possible under our current economic system. Demands for real reform would, of course, include strict price regulations and quality control standards for a universal MA HMO health insurance program combining public funding and private insurers. This is similar to the model of Universal Health Care For All that exists in Germany and Switzerland, and reflects choices available in Great Britain. Moreover, it is the model suggested by the Report to Congress 2009& 2010 when describing a more efficient way of providing all Medicare services in the future: Capitated, bundled payments to physicians groups associated with a particular “home” hospital. That is exactly what Medicare Advantage HMO plans are. Again, this plan which the Report states is themost efficient, and less costly than FFS Medicare, would nevertheless need to be subject to price, cost, salary and quality controls, along the lines as this same model of universal health care provision in parts of Europe.
I do not pretend that waging a political campaign for MA HMO For All would have be successful either. This is, after all, the plan that the media report is sufferingbillions in funding cuts, forcing elderly people on to the traditional, more costly, less efficient FFS Traditional Medicare! But that is exactly why such a struggle would provide an educational forum for greater understanding of our current system, and could enlist millions of older citizens who feel—and are being—ignored except when pointing out that they cost too much to care for (whether the topic is Medicare or Social Security). It might have even provided some protection for the elderly suffering the burden of financing a big part of this reform bill.
Dr. Flowers’ mind was as closed to my perspective as President Obama’s was to hers. She is a purist and wants nothing to do with private health insurance companies. She repeats the same misuse of data as does Obama, declaring that “Medicare Advantage is too expensive,” in spite of all the evidence cited regarding MA HMOs’ greater efficiency and lower cost. Doesn’t matter what the facts are, she is committed to a “publicly financed” health system. As I said above, Universal health care requiring public funding at the expense of the private sector profits doesn’t have the slightest chance of being accepted by the power elite of either political party or the private sector, nor the “corporate-sponsored presidency.” The latter is the term used by Dr. Flowers, but she seems not to grasp its implications.
Public funding that does not get redirected to private profit will not help a capitalist economy in crisis. (As when we “give” $ billions to Israel; the money does not leave the US but goes directly into the US bank accounts and profits of those US weapons producers Israel designates.) Public funding will not “provide a major stimulus for the U.S. economy,” nor will it “create millions of new jobs and billions in wages,” as Dr. Flowers and her colleagues promise. Government spending to get the economy out of a depression did not work during the “Great Depression,” and it is not on Obama’s agenda now. It took the massive government takeover and mandated retooling of industry for production of military weapons and equipment—along with the enormous war profits made by US corporations particularly in Germany during and after the war—to jump start the economy. In fact, since WWII, the real economy has not been able to grow without ongoing reliance on government intervention and military spending. That is who we are today: the largest manufacturer and supplier of weapons and military technology in the world. Cutting military spending and increasing social welfare programs is not on the Obama & Friends’ list of priorities.
The probability is that Dr. Flowers and I do not share the same analysis of how our economic system and the political and social institutions built upon it function. Obviously, she does not think that the attainment of Universal Government Funded Health Care for all United States Citizens would require anything like a revolution. Back in the early 70’s, before we understood the magic of economic recovery through “bubbles,” when many thought we were again facing the depression to end all depressions, I came across a quote by the Chairman of General Motors that I thought summed up the purpose of economic activity well. In a long article entitled “The Profit System and American Growth” GM’s chairman reminds us that “wages, taxes, dividends” all come from profits. If there are no profits, he says there is no money for education, health, welfare, no nothing (as the taxes which support these things come out of profits and wages paid by profitable enterprises). Material resources, production equipment, everything will lay idle unless corporations earn the rate of profit they deem sufficient. Corporations, he says must do well, before they can do good: and we must educate the American people on the importance of increased profits (NYT, 3/4/74). Capitalists were more candid back in those days. Conoco even ran big glossy ads in magazines bragging “Business and Industry account for nearly 70 percent of all the energy used in our country! (Newsweek, 8/26/74).” Environmentalists tell us it more like 80 per cent today.
No, we in the US, are not going to get government funded universal health care in the middle of an economic depression, if ever. But the steps one takes to get closer to that goal have to recognize the facts on the ground, and respect the reality less affluent people are struggling with. People do not understand the existing Medicare system nor the changes being implemented now…thanks in part of the misleading “Medicare For All” sloganeering that echoed the administrations’ propaganda about MA HMO. Millions of elderly knew those slogans did not reflect the truth about the challenges they face with Medicare. Rather than pursuing Obama, or defending Kucinich, or wishing Nader’s rich acquaintances would go against material interests of their class and cough up $billions for the programs we need, activists would benefit from an honest conversation with what some still call “the grassroots;” and include the elderly. Listen. Start there.
MARY LYNN CRAMER, MA, MSW, LICSW, Low-income senior enrolled in MA HMO, has a background in History of Economic Thought, and Clinical Social Work. She can be reached at firstname.lastname@example.org.