Wendell Potter debates the politics of privatizing Medicare in his latest column in The Huffington Post. According to Potter, Republicans who support the proposal think they can rely on health insurance companies to sell it to the American people.
But Novarest’s Donna Novak say it might not be so easy. ”The privatization of Medicare is the federal government’s attempt to make it a “defined contribution” program. Employers are making similar changes in their health benefit plans. The problem with using this technique is that for Medicare, the federal government uses many techniques to keep the cost down since they are paying the bills. They decide how much providers will be paid and what services will be covered. They also do extensive audits of the companies paid to process claims.”
Because of this, Novak says under a privatized system, the federal government will no longer have the incentive to fight the American Medical Association or American Hospital Association and keep health care costs for seniors under control. ”This would result in sharp increases in not only premiums, but also out of pocket costs to seniors. It would save Medicare at the expense of affordable health care for all but the wealthiest seniors.”