The Medical-Industrial complex targets Medicare and Medicaid(see related story below)

The Medical-Industrial complex has set its sights not only on reaping massive profits from the medical insurance, durable equipment, bio-med technology (the ooh ah bells and whistles part of health care we all love and believe makes us the “best in the world”), and pharmaceutical components of the U.S. health care non-system, it is also hell bent on extracting even more wealth from the social benefit programs of Medicare and Medicaid.

Their instruments are our so-called democratic institutions: the White House, Congress, state legislatures, and our ever-compliant corporate media that let us know that Medicare is in “crisis. It’s going broke and must be reformed.” They provide the endless sound bites that hammer out the message that there is no money to pay for the out-of-control costs of Medicaid. Besides, who are all these people “benefiting” from this tax supported largesse? We read that providing “free” health care for our elders, the disabled, the working poor, and our children is no longer an acceptable option in these times of economic crisis and national peril.

And, besides, if you are one of the recently-reported 60 million persons who don’t have access to health insurance and, therefore, health care, at some time during the year, well, it’s just your own damn fault! Laziness, sloth, moral turpitude. It’s not the job of the “guvmint” to provide for the “general welfare,” even if that decree is part of our Constitution. If we can forget the Bill of Rights, we can certainly forget that.

The federal government sort of applies various cost containment strategies that control no cost (read profit). Instead, we suffer through voluminous and convoluted regulations and caveats that bury those of us struggling to provide health care under a tidal wave of paperwork, while taking health care dollars away from actual patient care.

Doctors and nurses spend thousands of hours monitoring everything we do because of fear of being accused of fraud, while real and massive fraud continues unchecked in the boardrooms of the Medical-Industrial complex. The doctor from Healthcare Corporation of America, Senate Majority Leader Bill Frist (R-Tenn.), is here to help you. Sure he is.

Endless hours and dollars are wasted in an elusive hunt for “Quality of Care,” code for more cost containment measures minimizing resources and preventing the delivery of services.

But even with 14.1 percent of the GDP spent on health care in the U.S., the World Health Organization ranks the United States 37th among the world’s nations in provision and quality of care.

We do not care for our elders, our children – the most needful. The remaining tatters of the safety net – Medicare and Medicaid – are about to go up in flames.


Medicare is the healthcare plan for older Americans. It is the primary health insurance for 99 percent of people 65 years and older and more than 5 million disabled persons. It is the way older Americans pay for hospital, skilled nursing facility, rehab, and hospice care, as well as doctor bills, a little home health care, and limited outpatient costs. Medicare is currently guaranteed and lifelong.

Medicare isn’t perfect. It has many problems. The premium cost has increased since its inception in 1965; seniors now pay a greater percentage out of pocket than they directly paid for healthcare in 1964. There is the gap in Part B, the difference between what Medicare pays in doctor fees and what is actually owed, that the patient must make up.

This has created a whole new class of profit windfall for insurance companies that provide MEDIGAP insurance. In recent years, restrictions on reimbursement and time limits on services have compromised access to care.

Congressionally mandated cuts in physician payments, which are going to increase in magnitude over the next few years, are leading to a concomitant increase in the number of physicians refusing to take care of Medicare patients. I know of whole communities in this country where there are no doctors that will take on these patients.

Medicare does not provide dental care. Good dental care is essential to good health. Serious conditions, such as heart disease, may be caused or exacerbated by diseases of the mouth such as gum disease. Good nutrition may be dependent on obtaining a good fitting pair of dentures. We are all very much aware of the real crisis in prescription drugs.

The Medicare “intermediaries,” the corporations that actually handle the billing, accounting, and pay out the funds, are insurance companies such as Blue Cross of North Dakota. These entities often have their own rules, do not coordinate coverage even with each other, and place an unnecessary and complex burden on patients and providers alike.

The major problem with Medicare lies in its success. Beneficiaries are healthier and live longer. It is a national public health program with low administrative costs.

But it sits atop a pot of money that the medical industrial complex, Wall Street, and the current occupant of the White House want.

These special interests want to “reform” Medicare. They want to “privatize” Medicare by forcing the elderly and disabled into large managed care programs (or, to be honest, managed profit plans). All this without apparently noticing that:

• There are NO efficiencies in HMO;

• There are NO improvement in quality of care in HMOs;

• Medicare HMOs are dumping patients by the millions because they can’t make any money off them!

The right-wing privatization scheme is a radical and fundamental altering of Medicare. It is also ideological. The goal is the destruction of a guaranteed benefit available to all seniors through a reliable and successful program – transforming it into a plan where some types of care will be available some of the time for some people by private insurance companies, generating tremendous profit. And if you want and can afford more complete care, you can buy more. Thus generating even more profit at the expense of the health of not only the elderly, but of the nation.

The Bush Medicare Prescription Drug program would present a $400 billion gift to the pharmaceutical industry with little benefit for seniors.

The proposed GOP budget slashes Medicare by $214 billion. The real plan for Medicare is to starve it. Then shape the corpse until it fits the corporate mold.


Medicaid is the core of the nations safety net. The right-wing Bush administration attack against Medicaid is nothing short of evil.

The always underfunded Medicaid is the federal and state health insurance program that covers 47 million low income and disabled U.S. residents.

Medicaid is in trouble. It is a victim of state budget shortfalls and a surge in need. State budget shortfalls have come about because of falling tax revenues, cuts in federal revenue sharing, and imprudent tax-cut programs – a combination of the current economic crisis and right wing ideology. The surge in need, also generated by the economic crisis, is fueled by continuing mass layoffs, cutbacks, record unemployment and underemployment, and astronomical increases in insurance premiums.

The greatest threat to Medicaid is the proposed budget process change made by the Bush administration. Currently, Medicaid is funded by 1:1 or 1:3 federal matching grants. The kind of grant depends on state size and number of patients covered. The Bush proposal would change the mechanism to one of ever-shrinking block grants. This has created an unprecedented crisis.

States are slashing programs. These cuts affect the most vulnerable: Nursing home patients; life saving medications for people with HIV/Aids; nutrition programs for women and children; immunization programs for kids; TB surveillance programs; and prescription drugs.

Other proposals are cutting payments for hospitals and skilled nursing facilities; closing hospitals; eliminating payments for dental, vision, hospice and mental health programs.

Some states are charging elderly patients fees for doctor visits, non-emergency ER visits, transportation to places like dialysis centers and doctors’ offices, and ambulatory surgery services.

States are also looking to save money by changing eligibility requirements. Some states, like Arizona, fought for years to raise the eligibility ceiling for Medicaid from 37 percent of poverty to 100 percent of poverty. That gain is now threatened. Many of the proposed restrictions are tinged with racist and anti-immigrant provisions.

The block grant proposal would result in a 1/2 trillion dollar loss in public health funds over the next ten years.

Also on the chopping block is the State Children’s Insurance Program or SCHIP. Developed by the Clinton administration in 1997, SCHIP provides healthcare for the children of working parents who make too much money to qualify for Medicaid, but who do not get insurance through their jobs or cannot afford to purchase health insurance.

All in all, in 2004, Medicaid and SCHIP funding is threatened to be cut by $8 billion or 3 percent. This type of cut would strip 84,000 children in Missouri, alone, of healthcare coverage.

By 2009, the cuts will total $49 billion. And by 2013 – ten short years – cuts would total $105 billion or 16 percent. Almost 7.5 million people would loose coverage: 3.9 million kids. And George Bush says he will leave no child behind; 1.2 million disabled; 690,000 seniors; 1.7 million other adults.

There needs to be an organized and robust fight back to the anti-people attacks on our health care safety net. Already involved are labor, retiree organizations, and children advocacy groups. We must all be involved. We must all join this fight as if our very lives depend on it. They do.

The author is a health care worker and activist and can be reached at

• Medicare is the primary health insurance for 99 percent of people 65 years and older.

• Medicare covers more than 5 million disabled persons.

• Medicaid covers 47 million low-income and disabled U.S. residents every year.

• 60 million people are going without health insurance every year.

• Americans spend 14.1 percent of the gross domestic product on healthcare.

• The World Health Organization ranks the U.S. 37th among the world’s nations in provision and quality of care.

• A 3 percent reduction in Medicaid and SCHIP can leave 84,000 children without health coverage.

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The next big battle looms – privatization of Medicare

The next big legislative battle will begin the week of June 8 when Congress takes up the question of prescription drugs under Medicare. Senate Majority Leader Bill Frist (R-Tenn.) has announced his intention to wind things up before the Fourth of July.

The supporters of privatization see Frist, a cardiologist who never voted until he was nearly 40, as a key player in the up-coming battle. And well they should. He is a member of the family that founded – and still operates – Hospital Corporation of America (HCA), which merged with the Columbia hospital chain in the ’90s to become the nation’s largest hospital chain. Columbia/HCA has paid $1.7 billion in fines for defrauding Medicare.

Dianne Lardie, policy director of the Universal Health Care Action Network, said the obvious in a recent article: “Frist’s family would have a vested interest in privatizing Medicare.”

In her article “No to privatizing Medicare,” Lardie makes a number of important points:

• Because of Medicare, almost no one over 65 is without health insurance.

• Medicare serves 40,000,000 vulnerable Americans including 5,000,000 persons with chronic disabilities under age 65.

• Medicare is the most important element in reducing poverty among the elderly.

• Medicare+Choice (HMOs) plans offer unreliable coverage. From 1999 to 2003 these plans dropped 2.4 million Medicare beneficiaries.

• For-profit insurers withdrew from Medicare at two-and-a-half times the rate of non-profit plans.

• Medicare spends less that 3 percent on administrative costs compared to an average of 15 percent by HMOs.

• Private insurers that offer Medigap policies spend an average of 20 percent on non-health items such as marketing.

Lardie questions the need to “reform” Medicare which she says is “so obviously successful.” However, she suggest the need for strengthening the program: “New treatments and the aging of the population mean higher costs … Covered benefits need to be expanded to include prescription drugs. It is the how of expanding benefits and keeping Medicare affordable that will be the subject of much debate … [T]he administration and many in the for-profit insurance industry are chanting their usual “the private sector is more efficient, etc.” Buzz words like “consumer-driven,” “choice,” “competition” are being dangled to persuade the public that private plans offer more. Lardie says that “certain principles were agreed upon” when Medicare was enacted in 1965:

First, insurance is the mechanism best suited to having a large pool of people share risk. Second, redistribution of income through taxes was the way to make insurance affordable and universal. Third, administration should be through the federal government to ensure universality and avoid discrimination.

“These principles are worth upholding,” Lardie said, adding: “‘Reforming’ or restructuring Medicare threatens its universal and non-discriminatory features especially.”

Lardie went on to say, “Health care is not a product … to be bought and sold in a market context. It does not belong in the private sector for entrepreneurs to invest and make profits.” She said health care is a service that can only be guaranteed by the public sector “and that means government.”

“Medicare guarantees benefits, does not discriminate, holds costs down and provides social insurance that deters poverty. Any strengthening mechanisms must honor its status as a public program that acknowledges universality and community,” Lardie concluded.

– Fred Gaboury