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How New Medicare Reform Could Affect All Citizens

February 19, 2004
by Twila Brase

Other than one shining star-the Health Savings Account-the Medicare reform bill doesn't do much to improve health-care choices or reduce costs. Much of the language in the bill (which was signed into law on December 8, 2003) is meant to expand government control over health care and it will increase the burden of taxes on generations to come.

The Shining Star

Health Savings Accounts are needed to reduce costs and encourage patient-driven health care. They have the potential to free doctors and patients from today's bureaucracy in health care. However, the big question is: Can Health Savings Accounts solve the problems that will inevitably arise from passage of the rest of the Medicare bill?

Problems in the Bill

Hefty Price Tag: Added to pending insolvency is a nearly $400 billion price tag for seniors and taxpayers-for just the first 10 years. This is likely a low estimate.

Government-Directed Medical Practice: A first-ever, pay-for-performance demonstration program will reward doctors financially who comply with government or HMO-generated "cookbook" medical practices, and who report patient data electronically to the federal government.

Rationing of Medications: Once government agrees to pay for medications, it will decide which ones it will cover and how often they can be prescribed. Coverage and medication-related treatment decisions ultimately will be made by Medicare bureaucrats-not seniors and their doctors.

Loss of Drug Coverage: Many seniors will lose their existing private prescription drug coverage, despite the $86 billion employer subsidy.

Obstacle to Individual Insurance: The $86 billion employer subsidy further embeds the outdated and restrictive employer-sponsored insurance system into American health care.

Unfair Payment Requirements: Seniors with higher incomes will be required to pay higher premiums, despite those seniors having already paid higher payroll taxes to fund Medicare.

Managed Care: Medicare will pay higher payments to capitated managed care plans than traditional network-free, freedom-of-choice, fee-for-service Medicare, thus moving to institutionalize more restrictive managed care across the country.

Invasions of Patient Privacy: The U.S. Department of Health and Human Services can require Health Savings Account managers to report patient-specific data regarding use of the dollars in the Health Savings Accounts.

Twila Brase, RN, PHN, is president of Citizens' Council on Health Care in St. Paul, Minnesota.

This article was originally published in the November/December 2003 issue of Health Freedom Watch, the bimonthly watchdog report published by the Institute for Health Freedom.