The GOP's Medicare scam

REPUBLICAN House Budget Committee Chairman Paul Ryan and his colleagues were all smiles as they unveiled their budget proposals last week. They were smiling because they want to eliminate Medicare and Medicaid, the health insurance for senior citizens and poor people.

Republicans called Medicare "socialized medicine" when it began in 1965. Today, Medicare is the nation's most popular government program, and groups like the American Medical Association, which initially opposed it, have become solid supporters.

But Republicans still want to kill it, and think now's their chance. Instead of calling it socialist, they say they want to "leverage the power of free-market competition" to cut costs and give seniors more "choice."

Behind these familiar phrases is a much simpler goal: taking money from you and me, and giving it to insurance and financial companies that contribute to political campaigns and help rich investors get richer.

The GOP plan is equally simple: Eliminate Medicare and instead give senior citizens vouchers to buy health insurance from private firms. They say it'll save the government money and lower health-care costs. The first claim is true. The second isn't.

Because government would give seniors a fixed amount not keyed to actual health insurance costs, it would, of course, cost government less than providing the actual insurance, as Medicare currently does.

But that also means seniors would have to pay the difference between their government check and the cost of private insurance.

So government saves money because seniors pay more. No matter what you read or hear, it's really that simple.

What about controlling health-care costs? The Republicans claim costs will go down because insurers will compete for seniors' premium dollars.

If you've ever bought health insurance, or if your company has asked you to contribute more to your health plan, you know this is ridiculous. It's not a buyer's market, it's a seller's market: A few major health insurers pretty much dictate premium prices.

Seniors tend to be less healthy and more in need of insurance than the under-65 population, and as retirees they lack even the small negotiating leverage you get by being part of a company pool. Add all that up, and health insurers have no incentive to keep their prices down for seniors.

It gets worse: Medicare spends only 1 to 3 percent of its funding on overhead. But private HMOs and insurers have been known to skim off a quarter to a third of premium dollars for administration, marketing and profit to shareholders.

So the private insurers, and the financial firms heavily invested in them, stand to make lots of money from 40 million new customers, as all of the nation's seniors would remain in the private market at age 65 instead of being able to get Medicare. And you, your children and your grandchildren would subsidize those profits by paying more and more to the insurers during all those years after age 65.

To add insult to injury, the GOP plan also calls for more tax breaks for the wealthiest Americans. So the vast majority of us, who really need Medicare, wouldn't even get a tax break to help offset the increased costs.

It's a scam, pure and simple, another front in a class war being waged by the relative few who get rich off their investments, on the majority of Americans who survive primarily by working for a living.

Rather than make the elderly and the poor pay for our financial woes, why not make a couple of changes to our tax code:

1. Giant corporations such as GE and ExxonMobil paid no corporate income tax last year. Let's close the loopholes that let them get away with it. Even if we lower the official corporate rate (the highest in the industrialized world) to lighten the load on small businesses, we'll still bring in tens of billions more dollars every year.

2. Social Security is funded by payroll taxes, but only on the first $102,000 of income. This is a giant, irrational tax break for the wealthy. If we remove the cap, the highest earners will pay their fair share, and Social Security will instantly become solvent for the foreseeable future.

3. The federal home-mortgage interest deduction costs our nation $100 billion a year. The evidence that it lets people buy houses who otherwise couldn't is shaky at best, and over the years it has encouraged suburban sprawl and a consumer-debt crisis. Trimming it would bring in plenty of revenue without hurting our economy.

THEY SAY the mark of true commitment to a country or cause is the willingness to suffer and die for an idea.

That's exactly what Ryan and today's tea party GOP are all about, except they and their corporate patrons want you to do the suffering - for their idea. Remember that the next time you see the Republican budget hawks licking their chops.

Matt Ruben lives in Northern Liberties.