The program, established in 1965, provides medical benefits for those who are disabled or over the age of 65.

Medicare was a by-product of the gains of the mass civil rights struggles of the 1950s and ’60s. It was an extension of the Social Security Act, itself the product of the working-class battles of the 1930s.

Big-business promoters of the new legislation have hailed it as the biggest expansion of health-care coverage since Medicare was enacted. The Congressional approval of the bill was warmly welcomed by the owners of insurance companies, hospitals, and other health-care businesses, which expect the measure to line their pockets. Decisive to its passage was the support of the American Association of Retired People (AARP), a lobby group for retirees that also happens to receive millions of dollars in royalties for insurance marketed under its name.

President George Bush, who is expected to sign the bill soon, seeks to claim credit for a health-care measure supposedly benefiting retired workers and to score points against his Democratic opponents, who have posed as defenders of Medicare.

The House version of the bill passed 220 to 215, with 16 Democrats in favor. The Senate vote was 59 to 44, with 10 Democrats supporting the measure. “Give it a chance to work,” commented Democratic Senator Diane Feinstein after casting a vote in favor.

The legislation builds on initiatives by the Clinton administration, which set up a presidential-Congressional study commission on Medicare “reform.” Those initiatives touted drug benefits, increases in premiums, and incentives to force Medicare recipients into private “health-care management” businesses, or HMOs.

The bill’s sponsors say the changes are needed to preserve Medicare because it will supposedly go bankrupt with people living longer and receiving benefits longer. In the name of “saving” Medicare, it is a step toward the bosses’ goal of dismantling it.

Much attention has been drawn to the previously unavailable drug benefit provisions in the bill. But the measure is a move toward forcing working people to rely more heavily on private health-care companies.

The bill requires the Medicare plan to compete with private health-care companies for patients on the basis of price. It includes a $12 billion fund to give insurance companies subsidies as an “incentive.” For doctor visits and related services, Medicare recipients would have a choice of remaining in the plan or joining a private health-care program. Those remaining in the original plan would pay higher premiums if a private plan in their area is deemed to cost less.

Another provision introduces a means test, requiring those with incomes above $80,000 to pay higher premiums for doctor visits. Starting in 2005, the annual deductible for doctor visits, at $100 since 1991, would go up to $110. It would also be tied to inflation rates for the following years.

These two provisions caused Democratic Senator Edward Kennedy, one of the main backers of the bill until days before the vote, to lead an attempt to block it by a filibuster. Twenty-two Democratic senators joined with Republicans to end the filibuster. Kennedy had been instrumental in winning enough Democrats to get easy approval of the earlier draft of the bill in the Senate.

In 2006 recipients of the drug benefit would pay a monthly premium of $35, a $250 annual deductible, and a 25 percent “co-payment” until total out-of-pocket costs reached $2,250. After that amount comes the so-called doughnut or gap, where the recipient would have to pay all expenses out-of-pocket until the total reaches $5,100. Beyond that, the government would cover 95 percent of drug costs.

The bill would maintain a ban on importing prescription drugs from Canada, except those certified as safe or “cost effective” by the U.S. Department of Health and Human Services—an obvious benefit to the U.S. drug monopolies.

In addition to giving subsidies to the health-care monopolies to compete with Medicare, the bill provides $86 billion in payments and tax breaks over 10 years to private employers who continue to provide drug coverage to their retirees. Supporters of the bill argue that this is aimed at discouraging companies from dropping coverage for their retirees who would be eligible for the new Medicare drug benefits.

“Seniors with their own private coverage are likely to lose it,” warned Scott Holleran in the June 27 newsletter of the conservative Americans for Free Choice in Medicine. He cited a Congressional Budget Office estimate that 37 percent of private employers were expected to drop drug coverage for their retirees.

Authors of the bill say that by increasing the role of private health-care companies in Medicare, it will lower costs and improve quality of services. But a study by the Urban Institute that compared costs by private health-care companies to those of Medicare for comparable services between 1970 and 2000, concluded that the costs under private plans were 20 percent higher.

Another provision is the tax breaks to employers who establish “employee health savings accounts.” Workers would be able to use the savings to pay for medical expenses. A supposed benefit is that if they change employers they would be able to transfer funds in the account. In order to qualify for the accounts, employees would be required to participate in company-sponsored health-care plans that often have high deductibles.

Proponents of the “health savings accounts” argue that they would reduce costs by forcing workers to “conserve” on medical care because they’ll be paying the bill. “It gives the individual the right incentives to be a wise consumer,” declared Devon Herrick from a capitalist think tank in Dallas called the National Center for Policy Analysis. The argument reveals the real “choice” offered millions of working people in the name of saving Medicare: pay more or get less medical care.
 
 
Related articles:
Bipartisan attack on Medicare  
 
 
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