The Medicare "reform" legislation just passed by Congress sends the program on a path to destruction. Crafted in the heady days of the Great Society, Medicare has worked reasonably well for almost four decades for seniors and disabled Americans, many of whom are unable to buy health coverage in the private market. But the nation's financial commitment to Medicare--$224 billion in 2000--got in the way of the right's ideological goals of reducing the cost of government and making people fend for themselves. So nearly a decade ago right-wing politicians and their allies at the Heritage Foundation embarked on a campaign to transform Medicare into a private insurance program and ultimately to remove the government from the business of guaranteeing healthcare for the oldest and sickest citizens.

The new law lays the foundation for cutting benefits and increasing the amount of money beneficiaries will pay for care. The right knew it could never get control of Medicare's expenditures by overtly cutting benefits and raising premiums, so embedded in the legislation are provisions that give cover for doing exactly that. The so-called cap on what the government can spend on the total Medicare program is essentially a trigger that requires Medicare trustees to declare the program insolvent when spending from general tax revenues reaches 45 percent of the inevitably rising program expenditures. The $400 billion set aside for the prescription drug benefit will be financed through the general revenues. (Medicare is also financed through payroll taxes and premiums paid by beneficiaries.) Opponents say this arbitrary definition of insolvency aims at creating a crisis and generating political momentum for benefit cuts and more cost sharing.

The first step toward privatization mandates that private insurers, not the government, provide prescription drug benefits, the legislation's ostensible raison d'être. The government will funnel money to the insurance plans, which could then charge a premium to beneficiaries. Only in special circumstances will Medicare be allowed to offer drug coverage directly. In 2010 privatization will accelerate when commercial health plans in certain metropolitan areas will be able to sell insurance benefits in direct competition with those offered by traditional Medicare. Legislative architects hope that cheaper premiums and richer benefits will entice seniors to leave Medicare. Those offers will target the healthiest people, who won't cost insurers a lot of money. The sick will be stuck in the traditional program, unwanted by commercial carriers and forced to pay escalating premiums, since there will be less money available. For those who leave there are no guarantees.

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