Medicare was enacted in 1965 because private insurance companies did not want to offer health insurance to older people. The recent disastrous Medicare managed care experience demonstrates that they still don’t. 

I know. For more than twenty years, my colleagues and I have represented Medicare beneficiaries. Each year we speak to almost 10,000 beneficiaries. Most of them are among the frailest and sickest. They have chronic illnesses, they need long term home care, they spend more than they can afford for basic health care and prescription drugs.

In Connecticut, where my organization maintains its national office, many of them sought to answer these needs by choosing Medicare HMOs. But over the last five years those private health insurance plans stopped choosing them. Each year they offered higher premiums and fewer benefits. Now only two plans remain in Connecticut, and they offer coverage in only three of the state’s eight counties. This pattern has been repeated throughout the country.

• Since 1999, almost half of all Medicare managed care plans nationwide have stopped offering services completely or cut back on the counties they serve, affecting about two million beneficiaries.
  
  

• The number of Medicare plans that offer drug coverage has decreased dramatically. From 2001 to 2002 alone, the number of Medicare private plans that pay only for generic drugs, and not at all for brand names, increased from 17% to 55%.
  
  

• Those private Medicare plans that do offer a drug benefit increasingly rely on limited formulary lists and provide no coverage if the needed drug is not on the formulary.

Medicare managed care was intended to save the program money while still meeting patient needs - and adding new benefits. Instead it has cost the program and left millions of elderly and disabled beneficiaries high and dry.

Meanwhile, the traditional Medicare program continues to offer a secure set of benefits to people throughout the country. A home care benefit with no co-pay is one of the most important of these benefits. It is often the key to the frailest beneficiaries’ ability to stay at home rather than enter a nursing home. The President’s proposal, however, would require a co-pay for this home care in exchange for the possibility of a private insurance drug benefit.

President’s Bush’s proposal asks too much and offers too little. History shows that reliance upon private insurance companies will return the Medicare program and the frail elderly and disabled people it was intended to serve to the 1960s - with little health coverage and high out-of-pocket expenses. That is neither new nor reform.