DATELINE D.C. Big Thinkers Dallas Money Funds the Attack on Medicare BY CRAIG MCGRATH In fall of 1995 the Gingrich Congress had been in place for eight months, Republicans were still looking for new ideas, and at a September Capitol Hill press conference House Ways and Means Chair Bill Archer announced he had one. Dick Armey had already declared that “Medicare would not exist in a free society,” so Archer and Armey, along with House Whip Tom DeLay, were flogging an idea they said would help liberate elderly Americans from an oppressive system that paid for their health care costs. The press conference, sponsored by a think tank with its roots in Dallas, was the beginning of a legislative campaign to privatize Medicare using Medical Savings Accounts. But if the Texas Republicans were the agents of change when they promoted MSAs as a mechanism to undermine Medicare, the idea wasn’t exactly theirs. Nor was it the exclusive intellectual property of the Texas think tanker who promoted it. As Archer spoke, National Center for Policy Analysis President John Goodman stood behind the podium, just out of camera range. A Columbia Ph.D. and former professor at Southern Methodist University, Goodman had been waiting in the wings for years along with assorted right-wing academics who shared a fantasy about MSAs replacing Medicare. When they held their Capitol Hill press conference, Goodman, Archer, Armey, and DeLay shared one mission: to sell the public on Medical Savings Accounts as a way to begin privatizing Medicare. By the summer of 1997, they had made the sale in the budget deal negotiated with Bill Clinton. Thanks to a pilot program the Texans got into the bill’s final language, hundreds of thousands of seniors will be able to opt out of the Medicare system and replace their health coverage with MSAs. MSAs aren’t the original idea of the think tank Goodman directs. They are, rather, borrowed from a place no less enlightened than Singapore, where all workers are required to deposit money into Medical Savings Accounts. In fact the NCPA’s Executive Alert article on MSAs cites the NCPA’ s own study, “Compulsory Savings in Singapore,” as source material. Think tanks notwithstanding, Medical Savings Accounts do not require a lot of thought. To cover individual health care expenses, employers pay varying amounts of money into accounts of individual employees, while at the same time raising the deductible on those employees’ health insurance policies. If an employee gets ill, the company contribution that has been “given” to the employee is used first to cover expenses. If that money is exhausted, the employee must pay out of pocket until his expenses equal the new, higher deductible. And at the end of the year, the employee keeps any money that was not spent, either rolling it over into the next year’s MSA, or paying taxes and a 15 percent penalty for withdrawing it. In this country, for example, Golden Rule Insurance Company contributes up to $1,000 annually to each of its employees, while raising the deductible from $500 per person to $2,000 per person. Quaker Oats is not so generous, providing employees with $300 for medical expenses while keeping a high-deductible policy in place. Unlike workers in Singapore, Americans are not required to contribute to their accounts. Critics describe the low stipend and high deductible as a bribe not to get sick, and they argue that because the system results in fewer visits to the doctor, it can lead to serious illnesses that result from lack of treatment. Others worry that once the MSA program is applied to Medicare, it will encourage the healthy and wealthy to opt out of the program, leaving the chronically ill and disabled in a second-rate systema shift that could only please Armey, Archer, DeLay, and the corporate CEOs who would just as soon see Medicare abandoned anyway. If that sounds like a long shot, consider the NCPA briefing analysis, “How Medicare MSAs would work.” According to the NCPA, “Private insurance companies such as Aetna and Prudential would offer high-de ductible insurance policies to seniors as an alternative to traditional Medicare. The federal government would transfer that senior’s allotment of Medicare funds to the insurer, who would deduct the cost of catastrophic insurance and deposit the rest of the money in the senior’s MSA.” Seniors would pay their medical bills through an MSA credit card or pay cash and take a receipt to “the financial institution managing the MSA.” Backing the think tank that is backing the legislators are the corporate playerssuch as Forbes, Quaker Oats, and Golden Rule Insurance Companythat are most likely to benefit by ratcheting down the health care costs of their employees. Each of these companies has turned out pages of data illustrating how they reduced health insurance costs by offering or requiring MSAs. They have also written the checks that keep the Republican Party in control of Congress and the National Center for Policy Analysis in control of policy. According to Federal Election Commission records, Golden Rule and its president Patrick Rooney have been large contributors to the House Republican leadership, giving large amounts of money to Newt Gingrich’s political action committee, GOPAC, in the early and mid-1990s. Other right-wing funders also underwrite the NCPA. The John M. Olin Foundation, of New York, one of the heaviest hitters on the right, gives $75,000 to $100,000 annually to the NCPA. The Lynde and Harry Bradley Foundation and the Sarah Scaife Foundation also provide sixfigure contributions to the NCPA, and the support of funders from the right has allowed the NCPA’s budget to grow 25 percent each year since 1991. Goodman was behind the scenes at Bill Archer’s press conference, but on at least one program aired by the Public Broadcasting System he was in front of the camera. Goodman has frequently co-hosted William F. Buckley’s Firing Line and has conducted PBS series and panels addressing topics such See “Thinkers,” p.25 SEPTEMBER 26, 1997 THE TEXAS OBSERVER 7 -.04,
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