Healthcare Watch: Democrats Shift their Focus to the Domestic

Democrats in Congress have decided to shift their focus away from Iraq to domestic issues.

Simply put, they don’t have enough votes in Congress to end the war in Iraq and they feel that concentrating on the domestic agenda will help them to win votes in 2008.

So Democrats are starting to talk change in education, energy, and healthcare. And one of the federal programs that needs big help? Medicare, the federal health insurance program that covers 44 million elderly and disabled people.

As you can imagine, the cost of Medicare continues to rise as the cost of new tests, diagnostic machines, and medicines are added to the cost of hospitalization.

What is Medicare?

Currently, Medicare is available to the disabled and everyone over 65. It is an insurance program that pays doctors and hospitals whenever they treat a patient (fee-for-service). Each individual pays a relatively low monthly fee (premium) to be part of the system whether they ever get sick or not. Federal law defines the benefits available to beneficiaries, who can access services through any doctor that accepts Medicare. Medicare benefits are the same for everyone, whether or not they could afford to pay for those services on their own.

Medicare is divided into several parts. Part A covers hospital and other inpatient services. Part B covers doctor visits and other outpatient services, including durable medical equipment. Part C, most commonly known as Medicare Advantage (previously Medicare+Choice), makes available Medicare-covered health care services through a private health plan, such as an HMO, PPO or PFFS plan. These plans supervise your medical care and decide which services, other than your primary care doctor, you may have.

Starting January 1, 2006, Medicare began offering coverage for prescription drugs under a new part of Medicare (Part D). Private companies provide the coverage and tax dollars go to them to make sure that they can afford to compete for members.

New Medicare needs new oversight

Representatives on both sides of the aisle are saying that there should be better oversight of the new Medicare system, in which 80 percent of beneficiaries take part in the traditional fee-for-service program and 20 percent (8.7 million) get their Medicare benefits through private health plans that get payments from Medicare, now ironically called “Medicare Advantage” plans.

The Bush administration fought to change Medicare because the program, along with Medicaid, accounts for almost one out of every five dollars the federal government spends.

They sought to cut costs, but that’s hard when it comes to health care because we want it all. We want quality, we want affordability, we want to make choices of our own, and we want to get the help when we want it, as quickly as possible and in a convenient place. But of course we know that each policy has trade-offs.

The current administration made changes to shift the system away from a government guarantee to their philosophy of more individual responsibility and more competition between private corporations.

Some would like to move further in this direction, lowering payments to doctors that they say are too high already and holding each of us more accountable for choosing a lifestyle that keeps us healthy.

But many disagree, saying that Medicare is in danger of becoming a tax-payer subsidy for private insurance companies, which are not accountable to the people for controlling cost and waste.

Many in this camp say that quality healthcare is worth top-dollar, and that government is the best candidate to regulate cost and waste, because unlike private companies, it doesn’t have to focus on making a profit for its shareholders.

And these arguments are proving to be true. The Government Accountability Office says those private insurance companies have kept tens of millions of dollars that could have been used to reduce premiums or provide additional benefits.

To listen to our radio show Medicare Prescription Medicine, Who Should Care? Click here.

Auditing Medicare

A third of the Medicare financial records are supposed to be audited by private companies each year, but just 14 percent were audited in 2006 – so there are potentially hundreds of millions of extra dollars going from the Medicare program to private insurance companies.

The audits are supposed to determine whether the private insurers calculated costs and premiums correctly and delivered services promised.

But Medicare is now quite difficult to audit, with beneficiaries split between the traditional and private programs. Further, some Medicare Advantage plans cover a wide range of services while others only offer prescription drug coverage. And among the drug coverage plans, some demand extra payments if costs exceed expectations. Basically, it’s a complicated web of programs that includes many different premium and benefit packages.

Both Democrats and Republicans want to make sure taxpayer dollars are being fairly spent. Republican Senator Charles E. Grassley of Iowa says Medicare officials have done a poor job and beneficiaries aren’t being protected. So far, there are no bills in Congress to remedy the issue.

With doctor and hospital costs consistently rising, more oversight could mean more stable premiums for Medicare beneficiaries. But what about those who aren’t in Medicare?

The average worker’s health insurance premiums have gone up 6.1 percent in 2007, a much larger increase than wages and even inflation. While its down from 2006’s 7.7 percent, it’s still a steady increase that’s hard on the average family.

With Democrats in the majority promising to focus on America’s needs, what do you want to see happen in health care? Weigh in on our Healthcare Wiki.

Let your representatives know what you think!

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