If Congress in the next year or two succeeds in transforming Medicare into something that looks like a run-of-the mill Medicare Advantage plan for everyone – not just for those who now have the plans – it will mark the culmination of a 30-year project funded by the Heritage Foundation.

A conservative think tank, the Heritage Foundation grew to prominence in the 1970s and ’80s with a well-funded mission to remake or eliminate progressive governmental programs Americans had come to rely on, like Medicare, Social Security and Workers’ Compensation. 

Some 30 million people already have been lured into private Medicare Advantage plans, eager to grab such sales enticements as groceries, gym memberships and a sprinkling of dental coverage while apparently oblivious to the restrictions on care they may encounter when they get seriously ill and need expensive treatment.  That’s the time when you really need good insurance to pay the bills. 

Congress may soon pass legislation that authorizes a study commission pushed by Heritage and some Republican members aimed at placing recommendations on the legislative table that would end Medicare and Social Security, replacing those programs with new ones offering lesser benefits for fewer people.

In other words, they would no longer be available to everyone in a particular group. Instead they would morph into something like welfare, where only the neediest could receive benefits.  

How did these popular programs, now affecting 67.4 million Americans on Social Security and nearly 67 million on Medicare, become imperiled?

As I wrote in my book, Slanting the Story: The Forces That Shape the News, Heritage had embarked on a campaign to turn Medicare into a totally privatized arrangement. It’s instructive to look at the 30-year campaign by right-wing think tanks, particularly the Heritage Foundation, to turn these programs into something more akin to health insurance sold by profit-making companies like Aetna and UnitedHealthcare than social insurance, where everyone who pays into the system is entitled to a benefit when they become eligible.  

The proverbial handwriting was on the wall as early as 1997 when a group of American and Japanese health journalists gathered at an apartment in Manhattan to hear a program about services for the elderly. The featured speaker was Dr. Robyn Stone who had just left her position as assistant secretary for the Department of Health and Human Services in the Clinton administration. 

Stone chastised the American reporters in the audience, telling them: “What is amazing to me is that you have not picked up on probably the most significant story in aging since the 1960s, and that is passage of the Balanced Budget Act of 1997, which creates Medicare Plus Choice” – a forerunner of today’s Advantage plans.

“This is the beginning of the end of entitlements for the Medicare program,” Stone said, explaining that the changes signaled a move toward a “defined contribution” program rather than a “defined benefit” plan with a predetermined set of benefits for everyone. “The legislation was so gently passed that nobody looked at the details.” 

Robert Rosenblatt, who covered the aging beat for the Los Angeles Times, immediately challenged her. “It’s not the beginning of the end of Medicare as we know it,” he shot back. “It expands consumer choice.” 

Consumer choice had become the watchword of the so-called “consumer movement,” ostensibly empowering shoppers – but without always identifying the conditions under which their choices must be made.

When consumers lured by TV pitchmen sign up for Medicare Advantage, how many of the sellers disclose that once those consumers leave traditional Medicare for an Advantage plan, they may be trapped. In most states, they will not be able to buy a Medicare supplement policy if they don’t like their new plan unless they are in super-good health. 

In other words, most seniors are stuck. That can leave beneficiaries medically stranded when they have a serious, costly illness at a time in life when many are using up or have already exhausted their resources. I once asked a Medicare counselor what beneficiaries with little income would do if they became seriously ill and their Advantage plan refused to pay many of the bills, an increasingly common predicament.  The cavalier answer I got was: “They could just go on Medicaid.”

The push to privatize Medicare began in February 1995 when Heritage issued a six-page committee brief titled “A Special Report to the House Ways and Means Committee”, which was sent to members of Congress, editorial writers, columnists, talk show hosts and other media.  Heritage then spent months promoting its slant on the story. Along with other right-wing groups dedicated to transforming Medicare from social insurance to a private arrangement like car insurance, Heritage clobbered reporters who produced stories that didn’t fit the conservative narrative.

The right-wing Media Research Center singled out journalists who didn’t use the prescribed vocabulary to describe Heritage plans. Its newsletter criticized CBS reporter Linda Douglas when she reported that the senior citizens lobby had warned that the Republican budget would gut Medicare. The group reprimanded another CBS reporter, Connie Chung, for reporting that the House and Senate GOP plans “call for deep cuts in Medicare and other programs.”  Haley Barbour, then Republican National Committee chairman, vowed to raise “unshirted hell” with the news media whenever they used the word “cut.” He wined and dined reporters, “educating” them on the “difference” between cuts and slowing Medicare’s growth.  Former Republican U.S. Rep. John Kasich of Ohio, who chaired the House budget committee, called reporters warning them not to use the word “cut,” later admitting he “worked them over.”  

As I wrote at the time, by fall of that year reporters had fallen in line.  Douglas, who had been criticized all summer, got the words right and reported that the Republican bill contained a number of provisions “all adding up to a savings of $270 billion in the growth of Medicare spending.”

Fast forward to now. The Heritage Foundation’s Budget Blueprint for fiscal year 2023 offered ominous recommendations for Medicare, some of which might be enacted in a Republican administration. The think tank yet again called for a “premium support system” for Medicare, claiming that if its implementation was assumed in 2025, it “would reduce outlays by $1 trillion during the FY 2023-2032 period.” Heritage argues that the controversial approach would foster “intense competition among health plans and providers,” “expand beneficiaries’ choices,” “control costs,” “slow the growth of Medicare spending,” and “stimulate innovation.”

The potential beneficiaries would be given a sum of money, often called a premium support, to shop in the new marketplace, which could resemble today’s sales bazaar for Medicare Advantage plans, setting up the possibility for more hype and more sellers hoping to cash in on the revamped Medicare program. Many experts fear that such a program ultimately could destroy what is left of traditional Medicare, which about half of the Medicare population still prefers.  

In other words, most seniors are stuck. 

That can leave beneficiaries medically stranded when they have a serious, costly illness at a time in life when many are using up or have already exhausted their resources. I once asked a Medicare counselor what beneficiaries with little income would do if they became seriously ill and their Advantage plan refused to pay many of the bills, an increasingly common predicament.  The cavalier answer I got was: “They could just go on Medicaid.”

The push to privatize Medicare began in February 1995 when Heritage issued a six-page committee brief titled “A Special Report to the House Ways and Means Committee”, which was sent to members of Congress, editorial writers, columnists, talk show hosts and other media.  Heritage then spent months promoting its slant on the story. Along with other right-wing groups dedicated to transforming Medicare from social insurance to a private arrangement like car insurance, Heritage clobbered reporters who produced stories that didn’t fit the conservative narrative.

The right-wing Media Research Center singled out journalists who didn’t use the prescribed vocabulary to describe Heritage plans. Its newsletter criticized CBS reporter Linda Douglas when she reported that the senior citizens lobby had warned that the Republican budget would gut Medicare. The group reprimanded another CBS reporter, Connie Chung, for reporting that the House and Senate GOP plans “call for deep cuts in Medicare and other programs.”  Haley Barbour, then Republican National Committee chairman, vowed to raise “unshirted hell” with the news media whenever they used the word “cut.” He wined and dined reporters, “educating” them on the “difference” between cuts and slowing Medicare’s growth.  Former Republican U.S. Rep. John Kasich of Ohio, who chaired the House budget committee, called reporters warning them not to use the word “cut,” later admitting he “worked them over.”  

As I wrote at the time, by fall of that year reporters had fallen in line.  Douglas, who had been criticized all summer, got the words right and reported that the Republican bill contained a number of provisions “all adding up to a savings of $270 billion in the growth of Medicare spending.”

Fast forward to now. The Heritage Foundation’s Budget Blueprint for fiscal year 2023 offered ominous recommendations for Medicare, some of which might be enacted in a Republican administration. The think tank yet again called for a “premium support system” for Medicare, claiming that if its implementation was assumed in 2025, it “would reduce outlays by $1 trillion during the FY 2023-2032 period.” Heritage argues that the controversial approach would foster “intense competition among health plans and providers,” “expand beneficiaries’ choices,” “control costs,” “slow the growth of Medicare spending,” and “stimulate innovation.”

The potential beneficiaries would be given a sum of money, often called a premium support, to shop in the new marketplace, which could resemble today’s sales bazaar for Medicare Advantage plans, setting up the possibility for more hype and more sellers hoping to cash in on the revamped Medicare program. Many experts fear that such a program ultimately could destroy what is left of traditional Medicare, which about half of the Medicare population still prefers.  

In a Republican administration with a GOP Congress, some of the recommendations, or parts of them, might well become law. The last 30 years have shown that the Heritage Foundation and other organizations driven by ideological or financial reasons want to transform Medicare, and they are committed for the long haul.  They have the resources to promote their cause year after year, resulting in the continual erosion of traditional Medicare by Advantage Plans, many of which  are of questionable value when serious illness strikes. 

The seeds of Medicare’s destruction are in the air. 

The program as it was set out in 1965 has kept millions of older Americans out of medical poverty for over 50 years, but it may well become something else – a privatized health care system for the oldest citizens whose medical care will depend on the profit goals of a handful of private insurers. It’s a future that STAT’s Bob Herman, whose reporting has explored the inevitable clash between health care and an insurer’s profit goals, has shown us.

In the long term, the gym memberships, the groceries, the bit of dental and vision care so alluring today may well disappear, and millions of seniors will be left once again to the vagaries of America’s private insurance marketplace.