The Medicare Crisis: Prescription for Misery

Revolutionary Worker #1228, February 8, 2004, posted at

"Prescription drugs are very expensive. I'm on a fixed income, and the prices are only getting higher, so I buy my medicine before I will buy food because the doctors say I have to have them. I need my heart medication, I need my insulin, and I need the cancer medicine whether I have anything to eat or not."

Pauline, 73, retired mill worker in North Carolina, lives on $500 a month

The health care system in the U.S. is a scandal.

On one hand, the massive resources and continuing research breakthroughs make it theoretically possible to treat and even cure many of the illnesses that affect human health. More money is spent on medical care in the U.S., per capita, than anywhere on earth.

Elaborate facilities, highly skilled professionals, and designer medicines are at the disposal of the wealthiest layers of society, both for serious health problems and for the frivolous non-problems like the mushrooming fad of elective cosmetic surgery. Huge sums are raked off in profits for private hospitals, corporate research and especially profit-making of pharmaceutical and insurance companies.

On the other hand, tens of millions of people receive seriously sub-standard care or no medical care at all--with the horrifying side effects of undiagnosed disease, untreated chronic illnesses, unnecessary suffering and even premature death. Many millions of people have their incomes and savings sucked dry when someone in their family faces a serious illness, or even just the normal decline of old age.

In short, in this capitalist system health care comes in tiers.

Private health insurance is extremely expensive. Employer-paid medical insurance policies are less and less common and they cost the employees more and more. And the various federal medical programs are inadequate and under attack.

Today 44 million people have no health insurance at all. Currently, 20% of the population under age 65 lack health insurance. And many more are underinsured.

Those over 65 qualify for the federal Medicare program, which is limited, inadequate and often drains retired people of the meager money they live on.

As a result, there is tremendous anger broadly in the population, over the outrageous state of medical care. Every bourgeois poll says people are pissed as hell.

And so, predictably, as the election year starts, we are being told that "something has been done."

On December 8, amid great fanfare, President George Bush signed a controversial Prescription Drug Bill into law. Thousands of lobbyists and officials filed into the D.A.R. Constitution Hall while loudspeakers played John Philip Sousa military marches. Retired people were flown in, so various politicians could be photographed with them. A banner read, "Rx: Keeping Our Promise to Seniors."

The official story is that this new law starts to solve the huge problem that retired people can't afford necessary medicines. The details of the new law tell a different tale.

The Shocking Treatment of Retired People

In a report by one U.S. Senator, an all-too-typical situation is described: A woman, Anita Milton, disabled by lung disease received a lung transplant operation. She discovered, to her shock, that the medicines she now needed to survive cost more than $2,500 a month, and Medicare would not pay for them. The state Medicaid program pays for part of the cost, but requires a major co-payment by patients. As a result, Anita is expected to pay $683 a month for her prescription drugs out of a monthly income of $960. Which leaves her $251 a month to live on.

At the age of 65, most people qualify for federal Medicare benefits and millions of them live in intense poverty. Nearly half of Medicare beneficiaries receive less than $15,000 a year. One-third live on less than $10,000.

From the standpoint of meeting the needs of the people, Medicare has always left a lot to be desired and, in many ways, the coverage and services provided by Medicare have shrunk in recent years. Many doctors have stopped providing necessary treatment for patients because Medicare wouldn't cover them.

The cost of modern medicines in the U.S. can be shockingly high--even compared to the neighboring countries of Mexico and Canada. Seniors and disabled people often simply can't afford medicines that are literally a matter of life and death.

Medicare does not provide coverage for prescription drugs, except when you're in the hospital. Some of the elderly get prescription drug coverage through private retirement plans or paying for private medical insurance.

For millions, the only other option is to pay for additional "Medigap insurance." However, of the ten standardized Medigap plans, only three offer prescription drug coverage. Of these three, two have a limit of $1,250 and the third has a limit of $3,000. These policies require 50% co- payments and are priced out of the reach of many seniors.

In short: The hodgepodge net of existing government medical programs and private medical plans have huge holes in them and place impossible financial burdens on millions of retired people.

It means that many seniors are routinely forced to choose between life-saving medicine and food, and often don't get the procedures and medicines they need. Seniors often cut up pills or skip daily doses of their medications in order to make them last longer. This has an obvious and shameful impact on their health.

According to the Second Harvest Food Bank Network, over 4 million people visiting their food banks are elderly and 28% of all visitors (regardless of age group) have had to choose between buying food and filling prescriptions.

The problem is intensifying as costs rise: There was an average price increase of 6% for the 50 prescription drugs most commonly used by seniors.

Worse Than Nothing

Now, the Congress has passed the Republican Party's Prescription Drug Bill. As he signed the bill, President Bush called it "the greatest advance in health coverage for Americans since the founding of Medicare."

In fact, this new law solves nothing for seniors and actually starts a process of privatizing, and possibly destroying, Medicare-as-we-know-it.

The new "prescription drug benefit" is a complicated arrangement of deductibles, co- payments and holes.

The Congressional Budget Office estimates that Medicare enrollees will spend $1.8 trillion on medicine during the decade covered by the new law. And the law authorizes spending not more than $400 billion in those ten years.

In short: This bill will only cover about 22% of all prescription drug costs of Medicare participants.

This plan leaves a impossible financial burden on millions of seniors--especially those who are sickest.

Does this new law reduce the medical costs of individual seniors at all ? That depends on how much medicine they need and how expensive those medicines are. According to a report by Consumer Union, most Medicare recipients will end up paying more for their prescription drugs in 2007 than they pay today!

For example, a Medicare beneficiary who spent $2,318 in 2003 (close to the average amount) would find under this new law the out-of-pocket costs for prescription drugs (including: premium, deductible, co- payments, and doughnut) would total $2,911 (in 2003 dollars).

"We've been waiting, waiting for this prescription drug bill to provide some relief to seniors, but it won't do much for them, not much at all," Lorraine Anelotti, 72, of Fort Lauderdale, told the New York Times . "You would have to be a major, major user of some very expensive medications to get any kind of halfway decent benefit."

In addition, employers who currently offer retired employees a prescription drug benefit will be much less likely to offer it in the future.

At the same time, this new law ensures maximum profits to pharmaceutical companies. First there are billions of dollars set aside in the bill for drug companies and HMOs.

Then, the law prohibits the federal government from using its bargaining power with Medicare to negotiate with drug companies to lower drug prices for seniors.

And finally, this law continues to prohibit seniors from going to Mexico or Canada to buy their medicine at cheaper prices. Many seniors travel across the border or use the internet to buy their medicines more cheaply.

One senior told the RW : The government thinks its fine for companies to close factories and cross borders to get the cheapest labor, but considers it a threat to the "free market" when seniors cross borders to get affordable medicine!

The Push for Privatization

The people on Medicare face a daily, life-threatening financial crisis from the high cost of medicine. But the ruling class has a very different crisis on its mind.

Those controlling the U.S. medical system (in both the government and corporations) expect the budget cost of Medicare to rise rapidly--and want to "contain" those costs, even if it ultimately means less coverage and medicine for seniors.

The Medicare system is, at present a "fee for service" system--meaning that certain basic services are guaranteed for the people on Medicare and the government is obligated to pay the costs of those services. The medical costs for those services are rising rapidly, while the number of people relying on Medicare is also expected to rise rapidly. As the "baby boom" retires, the elderly population is expected to grow from 39 million in 2000 to 69 million in 2030. The government estimates that Medicare spending will go from about 12% in 1999--to 20% of the federal budget by 2009.

The new Prescription Drug law tries to "promote cost containment" by promoting the privatization of Medicare. The law requires Medicare recipients to choose between traditional Medicare and private insurance plans by 2010.

The basic concept is this: The sponsors of this new law want to move away from guaranteeing specific kinds of health coverage as a so-called "entitlement." If the medical coverage moves from "fee for service" to simply a flat fee for private insurance premiums, the government no longer guarantees that specific services would be covered. And it would therefore be easier to cut coverage.

Private insurance companies and HMOs will be able to attract those Medicare recipients who are in the best health and better off financially -- leaving traditional Medicare to pay for the sickest, most costly patients.

And this process will create new "tiers" of coverage and deteriorating health care--for both those in private and traditional plans. But from now on, it will be harder for people to respond politically to cuts--since the impact will be filtered through different plans, on different schedules.

This slide toward privatization of Medicare is similar to ways that other social services are being undermined and privatized: Federal housing projects and public schools have been allowed to decay. And then this outrageous neglect is used by extreme reactionaries as an argument for destroying public housing and education altogether.

Medicare is a mess, it is facing a growing financial crisis--and the solution of those in power is to undermine and dismantle it.

A Liars' Debate

It is an election year in the United States--and both political parties will swear, of course, that they plan to solve the problems of the people.

The Bush camp swears that the privatization of Medicare will "give the people more choices" and will unleash "the efficiency of the free market" to solve medical problems. (This is a perverse capitalist "efficiency" that will deny seniors more coverage, make them pay more money, and leave them less able to protest the worsening conditions.)

On the Democratic side comes the infuriating (and now familiar) mix of denouncing Republicans while putting forward something very close to the Republican program.

A simple telling fact is that major Democratic candidates have put forward "plans" for the medical crisis that don't contain much more change or funding than George Bush Sr.'s 1992 election proposals.

When it is pointed out how limited such changes would be, Howard Dean, for example, preaches a cold acceptance of lowered sights.

Howard Dean said in one debate, "I wrote my health care plan so that it would pass Congress. Jimmy Carter tried to reform the health care system. Bill Clinton tried to reform the health care system. Every time, we couldn't get that stuff through Congress. . I'm not interested in reforming the system."

In other words, within the official political arena, the realm of possibility has shrunk to almost nothing, and the cold logic of capitalism has fixed the writing on the wall.

The fundamental needs of the people are considered just too expensive. The changes needed to meet those needs are just too radical. The real priorities of those in power are just too different.

And meanwhile the feverish money-making of capitalist medicine rushes to provide the best to the most wealthy, and deny the basics to the millions who are poor.

This is a system which, for all its concentrated wealth, can't even get simple medicine to the sick and elderly, or dental care to working class kids. It makes sick and aging people choose between taking heart medicine or eating dinner.

Nothing makes this crisis "insoluble" except the heartless process of capitalist profit- making. All the bragging of "the best and most expensive medical system in the world" only makes this more glaring and criminal.