Predatory Private Corporations Seek Huge Profits from your Medicare

Gainesvlle, Florida (Special to Informed Comment) — President Harry S. Truman once said, “There is nothing new in the world except the history you do not know.” Attempts to profit by transfer of “ownership and control of economic programs/services/financial resources from the government into private, greedy hands have existed in many societies for thousands of years.

Father Lactantius, c.250-c.326, an early Christian author and advisor to the Roman Emperor Constantine I, wrote in “The Divine Institute” a timely piece about Roman society that well applies to 21st century USA society:

“In order to enslave the many, the greedy began to appropriate and accumulate the necessities of life and keep them tightly closed up so that they might keep these bounties for themselves. They did this not for humanity’s sake which was not in them at all but to rake up all things and products of their greed and avarice. In the name of justice, they made unfair and unjust laws to sanction their thefts and avarice against the power of the multitude. In this way they ruled as much by authority as by strength of arms and overt evil.”

The USA is a very large country and financing government services must be tailored to this reality. Accordingly, funding government programs requires us to properly tax oligarchs, mega-corporations and others who often completely avoid federal taxes.

It is a surprise for many to discover how much revenue is lost to the government by corporate/oligarch tax avoidance. Many corporations  hold back money for wage increases/employment because it’s not profitable for them to hire employees at decent wages.

They lend their now tax-free money to the U.S. government to fund deficits. When the U.S. government refuses to tax corporations and the rich and instead borrows from them, it runs a deficit by spending more than it takes in, due to not taxing them.

Our government then turns around to the same people it didn’t tax, corporations and the rich, paying them high interest on the borrowed money.

Using favorable tax laws, offshoring of taxable profits and other avoidance methods, large corporations, big insurance, big pharma and the ultra-wealthy rich no longer pay adequate and fair taxes to the government. The U.S. has substituted debt to finance many government services, which is one of the causes for today’s obscene $39 trillion debt.

Although very profitable for those in the 1%, it is a stunning and unmitigated disaster for everyone in the 99% when wealthy and privileged social groups substitute high interest-earning loans to the government for the taxes they formerly paid. Additionally, they often shift any increases in tax rates and percentages away from themselves and on to lower and middle-class taxpayers in the 99%. The disaster is that our economy relies almost completely on debt for its growth and causes immense problems in all directions; e.g., the interest rate jumps to 28% when we are late on a credit card payment. It is why our wages are stagnant with paltry cost-of-living increases if any and wages have declined in real terms. If we earned a sustainable income in the first place, many families would not have to borrow money to survive.

Advocates say the minimum wage should go up to $15. In the 1950s and the 1960s, the minimum wage tracked productivity and GDP. If it had continued after the mid-1970s, it would have been about $20 an hour by 2018. That’s money that poor working people are handing over to the wealthy and is why a university education, houses, medical bills and utilities cost so much.

Our system is designed so that the 99% can never free themselves from debt to the 1%. Currently, the richest 1% hold about 38% of all privately held wealth in the United States, while the bottom 90% hold about 73% of all debt. The richest 1% in the US own more wealth than the bottom 90%. The 1% impose the intrinsic instability of their system on the entire population, and then get the government to respond with deficits that even further benefit and reward the greed of the very same 1% oligarchs and corporations.

Ironically, we’ve borrowed so much as a nation from the rich, large corporations and some foreign countries that even they now are unsure they want to continue to lending to us because of today’s astronomical debt. To maintain their loan profits, they want us to eliminate/severely reduce programs for poor and sick people with austerity/cuts in all social and public health programs, Medicare, Medicaid, Social Security, etc. The absurdity and danger to our community of such an economic policy is exceeded only by its gross injustice.

President Donald Trump, the GOP and some Democrats promoting the  backlash against federal government programs seek to return to an earlier, supposedly golden era in American history. By privatizing Social Security, Medicare and Medicaid while further lowering taxes on the top 1 percent income bracket, House and Senate Republicans plan to solve the GOP manufactured debt crisis by shrinking the government and base its size on the 1950s level of U.S. population, effectively repealing Franklin D. Roosevelt’s New Deal while simultaneously opposing efforts to establish new 2026 policies and programs.

The New Deal of President Roosevelt, using the creative and humanitarian work of Roosevelt’s “Brain Trust”committee, developed the program of a federal safety net which included Social Security in the 1930s, and also inspired Lyndon B. Johnson’s Great Society and Medicare and Medicaid health insurance programs of the 1960s. FDR and LBJ asked all working adults to care for American seniors and the poor.

Before the New Deal, retired people could not turn to the government for income or medical care insurance. That responsibility fell directly to their children, if they had them. That’s why the Republicans’ proposed cuts to Medicare, Medicaid and Social Security are so shocking and inhumane — they shift these costs from the federal budget back to low state and/or non-existent family budgets.

Without the programs of the New Deal, you’ll get something like the 19th century which often had impassable country roads and unpaved city streets; fetid rivers, lakes, and beaches reeking of sewage and industrial waste; no public health programs, cruel ill-health and hunger in all age groups, no mental health, substance abuse or public health programs; epidemics of cholera, typhoid, polio and other scourges; massive illiteracy; indigent old age; few urban, state or national parks; vastly reduced productivity; urban riots and frequent bank failures that periodically wipe out depositors.

New Deal federal agencies such as the Works Progress Administration (WPA), Public Works Administration, Civil Works Administration and Civilian Conservation Corps (CCC) kick-started the construction industry back to health, creating companies like Kaiser and Bechtel. New Deal sewage systems and public hospitals almost immediately improved the health of virtually all Americans. Tennessee Valley Authority (TVA) assisted and improved  many communities electrical power needs.

Many people today are unaware that they use federal infrastructure every day, yet insist they want less government in their lives. They are getting their wish as much of the cultural and physical infrastructure the New Deal created is degrading for lack of maintenance, encroachment and repression by those blinded ideologically to shrinking the federal government. The failure to maintain, let alone update, the infrastructure we inherited led the American Society of Civil Engineers to give a “D” grade to U.S. infrastructure, including dams.

Roosevelt’s New Deal programs give us a true picture of what government at its most enlightened can accomplish for all of its citizens, not just the few 1 percent. We must stop a return to the 19th century from the 21st. Fairness and democracy of the New Deal are its most important legacy. If DJT, Republicans and their wealthy donors and supporters have their way however, we may be stranded in a world without it.

Because our government permits private health insurance companies to exact large profit from its cItizens, Wall Street banks and investors who back Big Insurance turn public money into a bonanza of private riches. High health insurance costs are the result of a political decision to essentially allow Big Insurance to do what they want and charge whatever they want. It’s no wonder so many beholden members of Congress want to protect the interests of their donors, Big Insurance and Big Pharma, industries that spent $371 million on lobbying in 2017.

The website/blog “The Lever”, reported that “The Better Medicare Alliance, an advocacy group for Medicare Advantage plans, spent $570,000 lobbying Congress in the first quarter of 2023, nearly double the $330,000 spent in the prior quarter. All told, the four major publicly traded health insurance companies that operate Medicare Advantage plans, as well as the insurance lobby America’s Health Insurance Plans, spent nearly $19 million on federal lobbying in the first quarter of 2023, a 66 percent increase from the prior quarter, according to a Lever analysis of data from OpenSecrets”.

U.S. political and oligarch support for privatization of health insurance is grounded in the philosophy espoused by University of Chicago economist, the late Milton Friedman. Friedman said “the corporations should not take into account the public interest” and added that “the government itself should not take into account the public interest. The job of the government is to simply let everybody make as much money as they can, however they can”. 

In contrast, classical economist Michael Hudson notes that Big Insurance doesn’t want any kind of anti-monopoly legislation . “Essentially you have what is called a free market, as advocated by Milton Friedman. A free market means the wealthiest people dominate the market and the supply of credit, the management of the economy that allocates credit, and who gets what shifts from Washington to Wall Street. It shift’s from the government to the private financial sector, and allows the financial sector to do the planning. One problem with this is the financial sector lives in the short run. So, it means that they only look for the next three months, the next year’s balance sheet, because the free market is so complex you don’t know what’s going to happen. Well, of course, since you’re managing it from Wall Street you in reality do know what’s going to happen but you don’t want to tell people exactly what’s going to happen”.

BIG INSURANCE PROFITEERING STATISTICS-(from Wendall Potter, Health Care Un-Covered:

1). big Insurance revenues and profits have increased by 300% and 287% respectively since 2012 due to explosive growth in the insurance companies’ pharmacy benefit management (PBM) businesses and the Medicare replacement plans called Medicare Advantage. 

2). the for-profits now control more than 70% of the Medicare Advantage market.In 2022, Big Insurance revenues reached $1.25 trillion and profits soared to $69.3 billion.That’s a 300% increase in revenue and a 287% increase in profits from 2012, when revenue was $412.9 billion and profits were $24 billion.

3). big insurers’ revenues have grown dramatically over the past decade, the result of consolidation in the PBM business and taxpayer-supported Medicare and Medicaid programs. 

4). what has changed dramatically over the decade is that the big insurers are now getting far more of their revenues from the pharmaceutical supply chain, Medicare, Medicaid and from taxpayers as they have moved aggressively into government programs. This is especially true of Humana, Centene, and Molina, which now get, respectively, 85%, 88%, and 94% of their health-plan revenues from government programs. 

5). the two biggest drivers are their fast-growing pharmacy benefit managers (PBMs), the relatively new and little-known middleman between patients and pharmaceutical drug manufacturers, and the privately owned and operated Medicare replacement plans marketed as Medicare Advantage. 

6). huge strides in privatizing both Medicare and Medicaid have been made. More than 90% of health-plan revenues at three of the health industry companies come from government programs as they continue to privatize both Medicare and Medicaid, through Medicare Advantage in particular. Enrollment in government-funded programs increased by 261% in 10 years.

FREE OURSELVES FROM PROFITEERS:

We now have several decades of experience with the conversion of health/mental health care into a business. Our health care is being rationed, with care guidelines determined by profitability and secrecy decided in private Wall Street corporate boardrooms. To realize large profits demanded by Wall Street investors, our health system must attract the healthy and turn away the sick, disabled, the poor, many of the old, and the mentally ill.

To maintain corporate control of U.S. health care insurance, our system is privatized and unregulated. Private, big insurance companies are in the business of making money, not providing full health care, and when they undertake the latter, it is likely not to be in the best interests of patients or to be efficient. Administrative costs (and immense profiteering ) are greater in the private health care insurance system, and even Medicare itself is weakened by having to work through the private system.

The USA is a country where health insurance for medical and mental health care is a function of socio-economic status. Everyone knows that this inhumane system should have been corrected long ago. We must immediately end our moral crime of having one of the greatest health systems in the world, but only for those who can afford it. We must support the common principles that insurance for health care is a human right, must be free from corporate profit, and must be achieved through national legislation. 

Improved Medicare for All is a solid investment in all citizens of our country by simply promoting a social service for universal access to affordable health care insurance for all. Aren’t we a society that cares enough to see that everyone receive the health care they need? That’s the basic purpose of Medicare for All. The history of our most successful national health insurance program, Medicare, provides one of the best arguments for expanding the program to cover everyone. It’s time to end inadequate and dangerous health insurance programs. Insist on real health insurance reform essential for individuals and families.

Image by estableman from Pixabay

 TAKE ACTION::   
a). The Medicare for All Act of 2025, now filed in Congress, would provide health coverage for every U.S. resident—including comprehensive medical, dental, vision, mental health, and reproductive care—with no out-of-pocket costs, copays, or deductibles.
b).  By eliminating waste and corporate profiteering in health care insurance, the bill would save hundreds of billions annually that could be invested in actual health care, resulting in better, more equitable health outcomes. 
c). By covering everyone without the copays, deductibles, and insurance networks that deter care and drive medical debt, M4A would achieve universal and comprehensive coverage, while assuring real choice of physician, mental health / health professional and hospital. 
d). By eliminating profiteering and wasteful insurance bureaucracy (plus the administrative costs that bureaucracy inflicts on healthcare providers), it would — according to the Congressional Budget Office — free up $400 billion annually in funds that could pay for the cost of such coverage expansions and improvements. 
e). Medicare-for-All could also effect a much needed shift in the ownership of care away from increasingly dominant private corporations to public ownership by Americans and their communities.
f).Contact your legislators asking them to oppose and end Medicare Advantage . Most importantly, ask them to strongly support legislation now filed in Congress, “The Medicare for All Act of 2025” House Bill (H.R. 3069) and Senate Bill (S. 1506) that would establish this badly needed reform.