In the reform plan now being promoted by many activists, the federal government would cover the cost of both Part B and the 20 percent gap. By taking that step, the insurance carriers can almost be eliminate from the process. The savings from dumping the insurance carriers, could be as much as $15 billion annually, according to some sources, including the Obama campaign.
The 2003 Bush MMA legislation did more than just hand money over to the insurance carriers. It also set up a new drug plan to feed the profit addiction of the big pharmaceutical companies. The MMA was supposed to reduce the cost of drugs to seniors, an issue which had become a national disgrace. Although the Medicare Part D did reduce the cost of drugs to some recipients, the basic problem remained: some Medicare beneficiaries in middle-income brackets – the infamous “donut hole” – were excluded from the plan.
The root of the problem is that Bush demanded that before he would sign the MMA, the legislation had to outlaw federal negotiation of the price of prescription drugs, as is the case with Medicaid and the Department of Veterans’ Affairs. Eliminating that provision could result in billions more for the Medicare program, and since congressional Democrats supported that position during the MMA legislative fights in 2003, a solid win for the Democrats in this election could result in a renewed effort on their part to revise the MMA.
Another flaw in the present system is that when the original Medicare law was passed, Congress failed to put the program into the hands of a reliable administrator – the Social Security Administration – to run the program. Instead, they paid insurance carriers to do that. This also must change. The highly successful Social Security Administration should be expanded to include Medicare. That makes sound fiscal and managerial sense. It would also mean a reduction in the duplication of government administration and provide the efficiency and reduced bureaucracy Republicans are always clamoring for.
Lowering the Medicare eligibility age to 55 is another needed reform. Originally raised in the 1990s and pushed by former Sen. George Mitchell (D-ME) after the failure of the Clinton health care plan, such a move could benefit a large number of retirees not yet eligible for Medicare and would dramatically reduce the number of uninsured Americans.
A strong and expanded Medicare program would also reduce the financial pressure on negotiated labor contracts. Now, many unions negotiate with employers for health benefits for retirees. They negotiate to have Part B and the 20 percent gap covered by a labor/management contract.
Lowering the Medicare age to 55 also makes early retirement more feasible for workers who continue to work just to keep their benefits. In fact, some unions negotiate health benefits as an added early retirement feature. So lowering the eligibility age to 55 would reduce the cost of retirees for many industries struggling with costs related to retiree health care.
Taking these pro-worker, pro-labor steps should ease the worries that many union leaders have concerning congressional action for national health care. It could encourage them to be more solid advocates for a national health program.
A beginning, for we must start somewhere.
