When the Bush administration first tried to sell the privatization of Social Security, the American people ultimately saw through the political marketing blitz and put a stop to private account plans designed to turn Social Security over to Wall Street. Unfortunately, by the time the President's Social Security privatization road show stalled out two years ago, the privatization of Medicare had already begun quietly and beneath the radar thanks to passage of the 2003 Medicare Modernization Act. Now seniors and taxpayers are paying the price for that privatization legislation.

With billions in subsidies going to the insurance industry, a substantial portion of which comes from premium hikes, and two years lost from Medicare’s solvency; many in Congress, the press, and the public finally understand what the privatization of Medicare really means. The Los Angeles Times has a good overview:

“Healthcare providers contended that the private sector was more efficient, so they could provide more for less. But as it turns out, the private Medicare Advantage plans provide more for more, costing the Medicare system 12% to 15% more than traditional government-run Medicare costs, said Maria Freese, director of government relations at the Committee to Preserve Social Security and Medicare, a Washington advocacy group. Eliminating Medicare Advantage plans, in which about 20% of Medicare recipients have enrolled, would give the system about two additional years of solvency.”

The Senior-Spectrum also highlighted the issue and quoted NCPSSM President/CEO Barbara Kennelly:

“The Administration’s goal is clear … to stack the deck in favor of a Medicare program run by private insurance companies allowing the destruction of the traditional program seniors have depended on for decades,” said Kennelly. “Congress must level the playing field, and it can start by eliminating these corporate giveaways.”

Congressional hearings in the House and Senate continue and we expect there will be legislation on Medicare Advantage overpayments later this year.