Tell President Biden and our Members of Congress to stop further privatization of Medicare!
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Call Script
My name is __________. I am a constituent, and my zip code is _______. I am a member of Indivisible SF.
President Biden:
Your SOTU address was a success. The American people look forward to your administration restoring good government for all of us, not just the top 1 percent. The corporate elite want to privatize our most cherished and essential services, such as national health care. Medicare is far more efficient than the private sector, with no profit-seeking middlemen between patients and their doctors. The Trump-era Medicare Direct Contracting Entities pilot program was a step backward that should be abandoned and not just rebranded as ACO REACH by HHS. Democrats must stop any further privatization of Medicare.
Members of Congress:
President Biden’s SOTU address was a success. The American people look forward to Democrats restoring good government for all of us, not just the top 1 percent. The corporate elite want to privatize our most cherished and essential services, such as national health care. Medicare is far more efficient than the private sector, with no profit-seeking middlemen between patients and their doctors. Please do all you can to make sure that the Trump-era Medicare Direct Contracting Entities pilot program is abandoned and not just rebranded as ACO REACH by HHS. Democrats must stop any further privatization of Medicare.
Background
Medicare spends 98 percent of its budget on patient care. There are no middlemen between patients and their doctors, and providers of medical care submit their bills directly to Medicare for reimbursement. Spending 98 percent on patient care is a record that is hard to beat but privatization ideologues have kept trying. Insurance companies spent millions lobbying Congress, claiming that adding managed care to Medicare would reduce costs and enhance quality. In 1997, “Medicare Choice” became official with the passing of the Balanced Budget Act, and was rebranded as Medicare Advantage in 2003. The controversial move was curbed by requiring Medicare Advantage plans to spend at least 85 percent on patient care.
The Trump era Republican privatization of Medicare took privatization even further. Direct Contracting Entities (DCEs) were inserted between Medicare beneficiaries and their medicare providers, with the same lofty goals. Like Medicare Advantage plans, the “direct contractors” (most of which are investor-owned, with ties to commercial insurers) would receive monthly payments for specific groups of patients. The less money the plans spend on patient care, the more money they and their investors pocket. The Trump pilot program allowed even more private profit: whereas Medicare Advantage plans are allowed to keep up to 15 percent of taxpayer dollars for profit and overhead, the Trump DCEs were allowed to keep up to 40 percent.
The Biden administration has proposed extending this program, rebranding it as ACO REACH, adding monitoring health equity to its previous goals. This January, 54 House Democrats wrote to Health & Human Services (HHS) Director Xavier Beccera in opposition to this move. “ACO REACH is Direct Contracting in disguise,” said Dr. Susan Rogers, M.D., president of Physicians for a National Health Program (PNHP). “This new model doubles down on Direct Contracting’s fatal flaws, inserting a profit-seeking middleman between beneficiaries and their providers.” Like DCEs, the ACO REACH program entities can be owned by commercial insurers, private equity investors, and other profit-seeking firms, including current Direct Contracting entities.
Not only does the ACO REACH maintain the DCEs’ high profit margins, but it also increases their power to overrule medical-care providers’ judgment. DCE input on treatment decisions in the Trump–era program was valued at 25 percent, but ACO REACH would raise that to 75 percent. ACO REACH entities are accountable to investors who will want a return on their investment, creating an incentive for ACO REACH middlemen to maximize revenues through upcoding, and to minimize expenditures by restricting patient care. (Here’s a link to sign PNHP’s petition to HHS Director Beccera on this topic: https://pnhp.salsalabs.org/DCEpetitionSeptember2021/index.html)
President Biden’s State of the Union address was a resounding success. Building Back Better means building upon the progress we have made toward a more democratic government focused on providing the most good to the widest number of people, using our taxes in a transparent, ethical manner. Medicare and Social Security are the foundation of that kind of government, and Republicans, who prioritize private profit, have continued to try to weaken them.
Just as the last thirty years have proven Republicans’ trickle-down economic theory to be a huge lie, the past thirty years have also shown us that the Reaganite myth promoting privatization as a more efficient, equitable way to provide government services is also a lie. (See References below) Privatization has ushered thousands of lobbyists into our Capitol to write the regulations that govern their contracts in exchange for campaign donations, a.k.a. fostered enormous corruption.
DeTrumpification means decreasing corruption. Building Back Better means decreasing privatization of essential services in favor of strong teams of public servants working together for the public good, accountable to all of us.
References
Medicare Privatization:
Medicare’s Controversial Direct Contracting Program Hits Biden Administration’s Radar, Elder Law Answers, 2/23/22
The Biden Administration Must Eliminate Direct Contracting Entities from Medicare, 2/24/22, Social Security Works
Trump-Era Medicare Pilot Program to Get Reboot From Biden HHS (1) , Bloomberg Law, Updated 2/24/22
Medicare Privatization Scheme Faced Legal Questions About Profiteering, 12/14/21
'Band-Aid on a Tumor': Critics Blast Biden Rebrand of Trump's Medicare Privatization Scheme , 2/25/22
Physicians to HHS: Rebranding Won't Fix Direct Contracting's Fatal Flaws - PNHP, 2/24/22
Medicare-DCE-Letter.pdf, 1/1/22, 54 House Democrats’ letter opposing the plan
Trump-era Program: Global & Professional Direct Contracting Model | Medicare
Rebranding: https://innovation.cms.gov/innovation-models/aco-reach
The Evolution of Private Plans in Medicare, The Commonwealth Fund, 12/8/17
Privatization in General: 'Privatization has failed repeatedly' | New Internationalist, 5/10/18
Social Security Privatization
In 2005, Republicans controlled Washington. Their agenda failed. Here's why. - Vox, 1/09/17
Why the 2005 Social Security Initiative Failed, and What it Means for the Future, 9/21/2007
Privatizing Military Services
Widespread Waste Found In Wartime Contracts, NPR, 8/31/11
Wiring warning came months before soldier electrocuted, CNN 2007
The Bad Decisions that Led to Privatized Military Housing Woes, Military.com, 4/02/2019
Prison Privatization