US Medicare changes: "Future news" for Australia?

by Bob Briton

The Republican-controlled House and Senate of the US Congress 
have narrowly approved plans that will rob millions of senior 
citizens of their access to affordable medicines through the US's 
Medicare system. The system — which shares some features with 
Australia's Pharmaceutical Benefits Scheme — will now be means 
tested for seniors, forcing many into the arms of privatised care 
through Health Maintenance Organisations (HMOs).

The Bush Administration has bullied this legislation through 
Congress as part of his commitment to the HMOs (the organisations 
that co-ordinate corporate medicine in the US) and the drug 
companies in the lead-up to the Presidential elections in 2004. 
It also fits nicely into the plans of former House Speaker Newt 
Gingrich, who would "let Medicare wither on the vine". The 
parallels with the Howard Government and its support for private 
medicine are all too plain.

The Bush-Cheney 2004 campaign will be deeply indebted to 
corporate medicine. One example of the sort of figure behind it 
is Hank McKinnel, chairman and CEO of the Pfizer drug 
transnational. He has pledged to raise US$200,000 for the 
campaign. Another is Charles Kahn, president of the Federation of 
American Hospitals and a "Pioneer" for the re-election push who 
has pledged US$100,000.

The latest legislation ends the universality of Medicare drug 
benefits for senior citizens by introducing a means test for 
access. Other seniors will be pushed into the clutches of private 
health care by the fact that the Government will now subsidise 
HMOs to the tune of US$1900 more per person than a regular 
Medicare beneficiary. "That's not competition, that's corporate 
welfare", Senator Tom Harkin (D-Iowa) said during the debate.

(This approach is similar to the Howard Government's 30 percent 
rebate and other handouts subsidising the private health 
insurance industry.)

Drug prices for this section of the US population are set to 
skyrocket. Medicare will now be prevented from negotiating lower 
prices from drug manufacturers for drugs on behalf of recipients. 
It will not be allowed to reimport drugs from Canada where its 
government still negotiates prices a third or half the price paid 
in the United States.

Eligible seniors will now have to pay US$810 in a year for 
medicines before getting any benefit from Medicare. The 
assistance stops when the bills reach the US$2250 and resumes 
again when they top US$3600 for the year. There is now a 
"doughnut" shaped hole in the Medicare safety net.

The American Association of Retired Persons has endorsed the 
Bill. However, this organisation is not your usual lobby group. 
It derives 60 percent of its huge revenues from insurance related 
ventures and stands to gain tens of millions of dollars each year 
from the Republican Medicare Bill.

Democrat plans to filibuster the Bill came undone when 22 
Democrat Senators joined the 47 Republicans to vote that the 
motion be put. However, they did manage to block an energy bill 
with US$110 billion worth of handouts to Bush 's oil and gas 
backers.