Most people don’t know that the Feds subsidize insurance companies for their Medicare Advantage Plans, also known as private Medicare contracts or Medicare HMO’s.  They do so and they do it to the tune of 12% over and above the premium amount for traditional Medicare.  They serve up a whopping 19% bonus to insurance for those seniors with private fee-for-service plans, which are currently the fastest growing privatized Medicare plans. As Republicans beat the drum that “Medicare is going broke” we say ” No wonder!  We are facilitating the demise of Medicare by subsidizing its privatization.  Amazing!

Comes now the Children’s Health Program bill, (SCHIP) which will be headed for Conference Committee by September 1.  The Senate version calls for most of the increased funding of 35 billion dollars in their bill to come from a 61 cent per pack tax on cigarettes.  The House bill is calling for a 50 billion dollar increase in funding and would cover this by the increased tax on cigarettes and elimination of federal funds for Medicare Advantage subsidies.

Good ole’ Dubya has vowed to veto any legislation that would more than minimally increase SCHIP and proposes only a 5 billion dollar increase.  This increase would be insufficient to even maintain present SCHIP enrollment numbers.  He along with his Republican cohorts in Congress want to be sure that we don’t fund too many kids.  As Bush says, “might lead to federal medicine er sumpin”.

Feeling sort of dizzy?  Just read on  …

Further complicating this picture now, SunCoast Physicians Health Plan, a Florida based Medicare Advantage Plan was recently ordered into receivership for the purpose of liquidation.  According to Dr. D. McCanne of the Physicians for a National Health Program, “Congress and the Administration established the private sector Medicare Advantage program arguing that the market is always more efficient than the government.  Just to be certain these private plans were successful, they were give an average of 12 percent more funds than were allocated to traditional Medicare. That was not enough butter for this plan to avoid receivership”.

If the current SCHIP legislation is passed with the Medicare subsidy elimination proposal intact, causing insurance to compete on a level playing field with Medicare, what will happen to the Medicare Advantage Plans.  Will they all go under or will they just walk away.

This tangled mess clearly demonstrates the fragmented and unreliable funding of health care in America.  No one can really be expected to keep up with all the deals and tradeoffs that are common practice. But should we expect citizens to know the differences between Medicare and Medicaid, the meaning of the term Universal Care and the differences between “socialized medicine” and a single payer system.  Yeah! we think so.  It’s called learning the ABC’s of health care. We think so because those who would confuse us are already way out in front.