CBS has spent a good bit of air time telling viewers where the candidates stand on the issues. And, to its credit, it devoted one segment to explaining Medicare, a complicated enough program that has been ignored by the media and the candidates. Both John McCain and Barack Obama have avoided the subject for fear of telling voters what really needs to be done to fix it—raise taxes to sustain the program, cut benefits, or make seniors pay more of their medical care themselves. In other words, further privatize the program. CBS showed how Medicare might affect three generations of the Schindle family: its eighty-eight-year-old mother, her two daughters, ages sixty-five and fifty-six, and a granddaughter, age thirty-eight.
But the segment, billed as an “in-depth look,” came across as shallow and revealed how little people really know about one of the government’s most popular programs. CBS missed a chance to educate the public about Medicare, instead choosing to pass along myths that the media should dispel. The segment made the point that, if it weren’t for Medicare, the family’s matriarch would not have health care; millions of others wouldn’t, either. It then reported that Medicare will be a “mixed bag” for her daughters. The sixty-five-year-old who just signed up was “stunned by the 20 percent co-pays.” “I thought Medicare was just gonna take care of everything,” she said. Really? Where has she been and where has CBS been?
Medicare has called for 20 percent coinsurance since its beginning in 1965. That’s coinsurance, a percentage of a medical bill, not copayments, a specific dollar amount paid for a service—a big difference, and one that CBS inexplicably did not clarify. Instead it followed up with a nonsensical quote from the daughter: “Everybody that has worked, has paid into the system and the fat cats get fatter—where’s all this money going to?” Well, yes, everyone who has worked pays into Medicare, but what does that have to do with the fat cats—and which ones? CBS used the quote to get to a major point it wanted to make: that the part of Medicare that pays for hospital care “is set to go broke by 2019,” because of the rising costs of health care.
That’s the doomsday scenario John McCain advanced the few times he did talk about Medicare during the campaign. CBS reported that both Obama and McCain concede Medicare is in trouble, but then quoted McCain, making the same point the network made earlier: “By 2019, there will be no money left.” McCain, CBS said, “blames bloated bureaucracy. Arguing doctors and clinics should get lump-sum payments for quality care instead of being paid for individual tests and treatments.”
Okay, another non-sequitur. How docs get paid has nothing to do with the administration of the program. For the record, Medicare has low administrative costs compared to commercial insurance companies. Marilyn Moon, a former Medicare trustee and now vice president at the American Institutes for Research, says the administrative costs of Medicare run between two and four percent of the more than $425 billion it spends on care each year, compared to nine to 25 percent for commercial insurers.
As for the hospital trust fund going broke, Moon says the situation isn’t as bleak as some people— generally conservatives who favor more privatization—say. We’ve heard doomsday talk before, but Congress always fixed the program. In the 1990s, politicians claimed that Medicare was supposed to run out of money by 2001. That didn’t happen then, and it won’t happen now, Moon predicted. “Talking about it going broke makes it sound more dire than it is and makes it sound like we need to do much more drastic things than we will need to put the program in good shape,” she says.
CBS did touch on one fix Congress could make—cutting the overpayments to Medicare Advantage plans, which Campaign Desk discussed a couple of weeks ago. We noted that a study by The Commonwealth Fund, a New York philanthropic and research organization, found that Medicare has been paying these plans, which allow seniors to get their hospital, doctor, and drug benefits all in one package, 12 percent more on average than it costs to provide the same benefits directly by Medicare. The day after our post, the Fund released another study showing that the government is paying a special kind of Medicare Advantage option, called the private-fee-for-service plan, on average nearly 17 percent more than it cost to provide the same benefits under the traditional program. Congress authorized Medicare Advantage plans ostensibly to save money for the program, but instead those plans have cost the government some $8.5 billion this year.