It appears that House Republicans may soon be launching an attempt to privatize Medicare. House Budget Committee Chairman Paul Ryan (R-WI) is testing support for his idea to replace Medicare with a so-called “voucher” system that would require recipients to purchase coverage through a private medical plan.

According to Michael Steel, spokesman for Speaker John Boehner (R-OH) — as of Thursday, “No decisions have been made . . . there are a lot of ideas out there.” So, we’ll have to stay tuned to see where this goes, but in the meantime, a closer look at the situation is definitely in order.

So, let’s see: the problem is that we have rapidly escalating healthcare costs and a growing population of elderly who will be reliant upon Medicare. Either situation would present a major economic issue by itself, but taken together the impact is of historical proportions.

Looking at the cost of healthcare, we have soaring premiums, deductibles, and copayments. Premiums alone nearly doubled between 2000 and 2008, and the total out-of-pocket for the average family climbed by more than 30% just between 2001 and 2006. The problem is so large that healthcare spending as a portion of GDP jumped to 17.3% in 2008 — the largest increase since 1960 — and it’s expected to climb to over 19% within the decade. We’ll be spending nearly $1 out of every $5 on healthcare.

Meanwhile, in spite of spending levels that are more than twice the OECD (Organization for Economic Cooperation and Development) average ($7,538 per capita in 2008) we trail most other developed countries in health outcomes. OECD data shows the U.S. ranking 26^th amongst 34 nations in life expectancy and 30^th for infant mortality. We may have the best healthcare available for those who are either wealthy or well-insured, but for the rest of us, we simply pay more and get less.

But alas the news isn’t all bad. All that money we’re spending is providing a great deal of benefit . . . for the bank accounts of the medical insurers and pharmaceutical companies. The 10 largest insurers are reaping a plentiful harvest. They’ve seen their profits soar over 250% from 2000 to 2009. In fact, they’re doing so well that despite a struggling economy, the top 5 insurers still managed to book a 56% jump in profits during 2009 alone.

So, what’s the GOP solution for this mess?

Well, we need look no further than the last major healthcare legislation authored and passed by Republicans to understand their priorities and strategy. That effort brought us Medicare Part D as part of the Medicare Modernization Act of 2003. The bill was passed with the support of only 11 Democrats in the Senate and 16 in the House. It was completely unfunded, and in fact piled on the deficit only a few months after the second round of Bush tax cuts were passed by an even slimmer partisan margin.

Medicare Part D has obviously had its positive impact, providing much-needed prescription drugs to America’s seniors. But with expenditures of nearly $50 billion in 2008 and projected expenditures in the next decade of around $1 trillion, it is without doubt a major source of our nation’s expansion of unfunded liabilities. The sad truth is that these costs could have been contained, but not without price controls. And with corporate profits being sacrosanct to Republicans, the program was designed to prohibit the federal government from negotiating prices with the drug companies. The result is that Medicare Part D pays a 58% average premium on the same drugs purchased by the Veterans Administration, which is allowed to negotiate prices.

So, with anything that might reduce corporate profits off the table, there’s really little latitude for alternative action. Since the federal deficit has already been ballooned to record levels in order to save Wall Street profits, another Medicare Part D unfunded gift to the healthcare industry won’t fly. Add in the strict Republican prohibition against any tax increases that could increase revenues, and the GOP is left with but a single path of action — reduce services.

Vouchers are the answer for maximizing government funding of healthcare industry profits without increasing expenditures. It’s the GOP’s way of saying, “Here you go Cigna. Uncle Sam just can’t afford anymore, but we’ll make sure you get every penny available.”

Of course, the countervailing message to America’s elderly is akin to “Thanks for your contribution. You’re on your own now. We hope you won’t become ill, but if you do, may you die quickly.” But, oh well, that’s life; resources are limited and somebody has to make a sacrifice.

As with most things, the choices we make usually depend on our priorities, and healthcare in America is no exception. There are those who believe that a person who has worked their entire life deserves for the society they’ve supported to reciprocate with this most basic of humanitarian services. These people believe that one of the other variables, corporate profits or tax revenues, should be adjusted to fulfill this duty. Their belief is that we are not only the United States but also a united people.

Then there are others who don’t see American society as a union of all the people. They believe in division instead of unity, in winners and losers. For these people, there is no shame in runaway corporate profits or the skyrocketing wealth of the top 1%, because that’s the way the game is played. They view society as a competition, not a brotherhood. Exploitation is the path to victory, and to the victor belong the spoils.

Everyone understands that healthcare in America is on an unsustainable path. We’re in desperate needs of solutions, and whatever they are, sacrifice will be required. The decision to be made is who will bear the burden. Will we as a nation ask for the wealthy to give out of their abundance or will we take from those least able to fend for themselves?

The answer is all about priorities: people or profits. And we all have to answer for ourselves which side we’re on.

Article first published as Indictment of the American People on Technorati.

The 2010 midterm election is more an indictment on the American people than the politicians of either party.

The Democrats spent the last 22 months trying to save our nation from the ravages of Republican rule. They made mistakes along the way, but everything they did was a move toward helping and protecting average Americans. Meanwhile, instead of helping to create jobs and restore the economy, the Republicans did everything possible to force extended suffering for their political advantage — tragically, the American people have rewarded them for their treachery.

Way to go America!

For the record, President Obama and the 111^th Congress inherited the worst American economic collapse since the Great Depression. The average American household had lost a quarter of their wealth, $13 trillion in all. The Dow would close at a low of 6,547, with stocks overall dropping from a high of $22 trillion to $9 trillion. Job loss was at 3 million for 2008, and the economy was still shedding more at a rate of over 600,000 per month.

The first action the new Congress took was to stop the hemorrhaging with the federal Stimulus. Split between $228 billion in tax cuts for 95% of Americans, $224 billion in funding to help the unemployed and prop up Medicaid, and $275 billion for direct investment in job creating infrastructure, energy and technology projects, the legislation passed the House without a single Republican vote.

The very same Republicans who had voted in favor of spending $700 billion to bailout Wall Street bankers just three months prior, suddenly became budget conscious and adopted intransigent positions against spending to help average Americans. Republican leaders, including John Boehner and Eric Cantor, rallied to the aid of Wall Street but dug in their heels and fought against helping Main Street.

In retrospect, it’s obvious that the writing was already on the wall the moment that President Obama took office. The initial action of a Republican minority to oppose the Stimulus grew into unrelenting opposition to any form of legislation that would help the American people, impede the unfettered profiteering of Wall Street, or slow the offshoring of jobs.

While the Democrats continued striving to keep the average American’s nose above water, the Republicans did everything they could to make sure they kept choking.

Democrats attempted to address the issue of more than 45 million Americans without healthcare insurance. And instead of working to ensure that any legislation was effective, instead of embracing reform to deal with skyrocketing costs, the Republicans blocked all attempts without compromise. They fought to maintain the profits of healthcare insurers and Big Pharma and instead of helping to govern, seized the opportunity for political advantage with fear-mongering sound bites about the “government takeover” of medical services, death panels and the coming of Armageddon. All incidentally complete lies!

The Democrats later attempted to pass Wall Street reform to prevent a future round of too-big-to-fail collapse and bailout. The Republican response was to meet with the Wall Street bankers and plan their strategic opposition. The bill passed the House, again without a single Republican vote, but it was in diluted form in order to gain any minority support in the Senate.

For 22 months, the Republicans fought every action taken to create jobs. They opposed legislation to address the rising costs of education. They attempted to block Democratic efforts to close tax loopholes and stop the bleeding of jobs overseas. They fought against repairing our infrastructure, against small business aid, against unemployment insurance, against saving the jobs of teachers, nurses and firefighters. They argued against the President’s attempts to hold BP responsible for destroying the ecosystem of the Gulf and blocked efforts to increase their liability limits. They battled against climate legislation, clashed on the issue of gays in the military, and resisted all attempts to require disclosure of campaign funding sources They even opposed legislation to lend aid to 9/11 first responders and stood against extending the Bush tax cuts unless the extension included the richest 2%.

The bottom line is that the Republicans did everything they could, from gross distortion to outright lying, from uncompromising rhetoric to unprecedented filibuster to stop any form of legislation that might improve the lot of average Americans. Their aim was to make things as bad as they possibly could for the American people in order to leverage their misery for political gain — and they were rewarded for it.

Manipulated to feed the source of their exploitation, the American electorate deserves an indictment for societal insanity. But there’s no sense in convening a jury, because all evidence points to the conclusion that the defendant is already brain dead. This is a sad day for America.

Article first published as Affordable Healthcare in America — Fighting Fiction and Facing Facts on Technorati.

Healthcare insurers are at it again, only this time they’re blaming their rate increases on the Affordable Care Act passed earlier this year. Late last week, Aetna Inc., certain BlueCross BlueShield plans and other smaller carriers asked for rate increases from 1% to 9%, allegedly to cover costs stemming from the new law.

Republicans were quick to jump on the news and leverage it for political gain by posting the news on the Republican Senate’s website. But this is nothing new. The Republicans have railed against the legislation since day-one, most often with gross distortions, like Sarah Palin’s “Death Panels.” Most recently, during his August 24 speech at the City Club of Cleveland, House Minority Leader, John Boehner attacked the law, illegitimately labeling it “a government takeover of healthcare.” Of course it’s actually nothing of the sort, as it continues to rely upon the existing system of private insurers and providers, but Boehner would never let the truth get in the way of a good talking point.

Not to miss an opportunity to ding the Democrats, Rand Paul released a new campaign ad attacking what he calls, “the Obama-Pelosi healthcare scheme,” claiming that it “puts Washington bureaucrats in charge, destroying the doctor-patient relationship.” And according to Sen. Charles Grassley (R-IA), the top Republican on the Senate Finance Committee, “People are finding out what’s in [the law], they don’t like it, and I think it’s going to play a big factor in this election.” Such serious assertions make a person wonder what changes within the new law could possibly be responsible.

The issues cited by the insurers looking for rate hikes were: allowing children to stay on their parents’ insurance policies until age 26, eliminating co-payments for preventive care, barring insurers from denying coverage for children with pre-existing conditions, and changes to annual and lifetime coverage caps. Just how these regulations will “destroy doctor-patient relationships” or why Grassley’s “people” would raise an objection to them is hard to fathom. But fact-free Republican spin is a constant in 21^st Century America, so Democrats are left with a vigilant effort to combat fiction with actual facts.

The fact is that the Obama administration was expecting small premium increases in the short term, between 1% and 2%, stemming from the new regulations. But they are also counting on the state managed insurance exchanges to provide much needed competition and rate reductions as time moves forward. Another fact is that rate increases vary amongst carriers. The high mark is currently Celtic Insurance Co., in Wisconsin and North Carolina, who claim that half of their 18% increase is the result of the new federal regulations. BlueCross BlueShield of Oregon sets their hit at 3.4% of an overall 17.1% increase, and HMO Colorado actually filed for a 1.8% rate reduction associated with the new laws.

Regardless of what the costs resulting from new regulations are in reality, they are but a small part of the overall thrust toward ever escalating healthcare costs. Few can forget the 39% increase requested by Anthem BlueCross earlier this year, a request that turned out to be based on erroneous calculations. But erroneous or not, costs are on a steep upward trajectory and so are insurance company profits.

Real costs continue to rise for multiple reasons. With Baby Boomers aging, there is a steady increase of elderly patients, and at the same time, the population is increasing and people are living longer. New and expensive medical technology is another contributor of rising costs, as is increasing obesity, currently estimated to affect 34% of American adults. Inadequate medical records and a lack of preventative care also contribute, both of which are now being addressed through Obama administration initiatives — preventative medicine through the healthcare bill and medical records through $20 billion in Stimulus funding.

But none of these issues should be viewed as the main culprit, though each one does have more impact than the Republican’s favorite diversion — malpractice insurance, which only accounts for around 2% of overall costs. Fortunately, the main culprit is completely controllable, but it will require structural change: that factor is our reliance upon a fee-for-service based insurance system. Inherent in the design of fee-for-service systems are incentives that promote the consumption of unneeded and marginally effective services, and disincentives for leveraging preventative care. This dynamic is the driving force behind the fact that, while we trail most other Organization for Economic Cooperation and Development (OECD) nations in almost all healthcare metrics, we also spend twice as much on healthcare — currently 17% of GDP.

Ironically, the main people really benefitting from continuously escalating healthcare costs are the very same people now asking for rate increases — the medical insurers. While the nation is struggling under the weight of average insurance rates that have climbed 131% since 1999, the insurers have enjoyed a ridiculous 250% increase in profits. Even in the current economic times, the nation’s five biggest for-profit health insurance companies posted record profits, booking $3.2 billion in the first three months of this year, a 31% increase over the same period in 2009. They’re doing so well that the top 10 firms have been able to raise CEO pay to an average $23 million each, a 167% increase in 2009 alone.

Unfortunately, the Affordable Care Act didn’t address most of the issues responsible for driving up healthcare costs, and at present, there is no movement in Washington to do so. Until these issues are given the focus they need and fee-for-service is replaced with some sort of managed care system, more emphasis is placed on preventative medicine, and a system is created to provide real competition amongst both insurers and providers, costs will continue to skyrocket and insurers will keep smiling all the way to the bank.