Donald Trump claimed to be a supporter of Medicare, yet his administration took numerous steps to cut its budget and introduce schemes to privatize it, including the Direct Contracting Entity (DCE) program, also known as ACO REACH. Rather than overturn this program, President Biden and his administration have been quietly letting it continue. As Branko Marcetic recently wrote in Jacobin magazine, “ACO REACH’s continued existence is a serious looming threat to Medicare as we know it and to seniors themselves. And in a sadly typical trend, it’s a Democratic president who’s trying to get away with gutting Medicare, something a Republican could never hope to get away with.” In the latest installment of The Marc Steiner Show, Marc talks with Marcetic about his recent Jacobin piece, the corporate-serving “logic” behind the push to privatize Medicare, and about the grassroots effort to fight against it.
Branko Marcetic is a Jacobin staff writer based in Toronto, Canada, and the author of Yesterday’s Man: The Case Against Joe Biden.
Pre-Production/Studio: Adam Coley
Post-Production: Stephen Frank
Marc Steiner: Welcome to The Marc Steiner Show here on The Real News. I’m Marc Steiner, and it’s great to have you all with us. In the midst of the madness of mass murders in our schools and the war in Ukraine, a lot of stuff that could really affect our lives is sliding under the radar. To wit, the future of your, our, Medicare benefits could all morph into a privatized thing, what we know now is the past. Trump was working on privatizing Medicare when he slinked through the White House. Now President Biden is, at best, not doing anything to stop it. Look I’m on Medicare, and it doesn’t really cover much of anything sometimes. Not dental care, hearing aids, eye exams, eyeglasses, home healthcare. I mean, all the things that older people need. You can get some of them, but you have to buy private supplemental health insurance that could cost thousands of dollars a year.
Now, what Trump began, Biden is allowing to take hold. Giving more services over to so-called accountable care organizations, letting private companies decide what coverage you can use. Recently, Seattle City Council and even the conservative Arizona AMA, the American Medical Association, said, no, this is a disaster. Why is this happening? Where are the movements to stop it and fight for real Medicare? What could the future hold? We turn to writer and activist Branko Marcetic. Who is a Jacobin staff writer, author of Yesterday’s Man: The Case Against Joe Biden, lives in Chicago. And the article that came to our attention that was in Jacobin and Portside was “Biden’s Little Publicized Medicare Privatization Scheme is Starting to Raise Alarm Bells.” And Branko, welcome back. Good to have you with us.
Branko Marcetic: Thank you very much for having me.
Marc Steiner: So let’s talk a bit about what’s happening here. I mean, take a step backwards for just a moment. I mean, Medicare that was created in, I think if I have the date right, July 30, 1965 under Lyndon Baines Johnson, was really much heralded. It was going to take care of the healthcare needs of people over 65. And we hear all of the talk about how it’s insolvent; We can’t afford it; It has to go to private healthcare; It can’t do the job right. So let’s talk about that political dynamic, the economic dynamic, the power dynamic that is causing the crisis that we’re facing.
Branko Marcetic: Well, it’s a great and tragic irony, really, because Joe Biden was elected and swept into power on this kind of Rooseveltian vision. We heard all this talk about the second coming of the New Deal. Well at least, the Great Society, and of course, Medicare is one of the great legacies of the Great Society. And yet, not only is Biden’s agenda when it came to expanding Medicare and expanding the role of government in people’s lives to guarantee the economic security dead in the water now, but in fact, through this very little known program, what already exists, the Medicare system that is already very limited, is now quite under threat. And critics of this program, of this ACO REACH program, as it’s now known, warned that this is basically the first tip to ultimately privatizing the entire thing.
And I can tell you a little bit about why this particular program is so, I think, pernicious and underhanded, really. We all know about Medicare Advantage. It was set up in the ’80s as a way to give the private sector more of a role in the program. So basically chip away at the original vision of Medicare, which of course is meant to be a publicly-owned, publicly-controlled health insurance system. But the thing with Medicare Advantage at the very least is that you choose to be on it. You can choose whether you want traditional Medicare or whether you want to go for one of these private plans. With this ACO REACH model, which at the moment is a pilot project, but CMS, The Center for Medicare and Medicaid Services, has outright said they want everyone on Medicare to move to it by 2030. This ACO REACH model does not even give you that choice.
Seniors just go to their letterbox one day, they see a letter there, and it tells them, don’t panic, don’t worry. You’re being moved into this ACO REACH pilot program. Nothing’s going to change. In fact, if anything changes, it’s going to be for the better. You’re going to have better care. And you don’t have to do anything. And so what this is is it’s targeting people who have explicitly chosen not to go for Medicare Advantage. And it’s basically putting them in a Medicare Advantage style system where Medicare ends up paying a third party, a private equity-backed company or a health insurance-backed company, which then basically administers and decides what kind of care you’re going to get. And has incentives, obviously, to make money. And again, this is completely without their consent. And so you can see why people are saying this is one major step toward a goal of ultimately privatizing the entire thing.
Marc Steiner: So when I read your article and was reading other pieces on this and thinking about Medicare, the reality is if you don’t have Medicare Advantage, let’s say if you’re on Medicare and you don’t pay for that extra. There’s two extra things for it. Dental care, eye care, whatever else that you have. You have to pick a plan out of a plethora of plans that you pay anywhere from $100 to $300 a month for. But if you didn’t do that, Medicare would cover nothing that you really need in the long run. So it’s interesting to me that the battle around Medicare is no longer about expanding Medicare or expanding what coverage it is, it’s about how you turn it over to private insurance. There’s a dynamic here going on in terms of the power of insurance companies that are really kind of pushing this agenda.
Branko Marcetic: Well as some of the people I spoke to for these various pieces I’ve written on this topic have said, the idea is that of course the private sector wants its hooks into whatever it can to make money. Of course the federal government has essentially unlimited money in the United States. And you see this huge pot of money that, essentially, Medicare controls. And naturally, if you’re someone who is profit driven, you want a piece of that. Medicare Advantage is one thing, but the overall Medicare spending, that’s the real prize. And so this is the way that I guess both the private sector and those parts of the federal government that it’s managed to capture have figured out a way to try and insert themselves into what should be just a publicly administered program.
And the idea is this is meant to be a cost saving efficiency. That’s the argument, of course. We’ve heard that so many times, that businesses, the private sector, they’re always more efficient. They know what they’re doing. They’re going to be able to save you costs and all that. But that’s not the reality. Number one, usually when you try and make something more efficient, you don’t end up putting a middleman in. You end up cutting the middleman out.
Marc Steiner: Right.
Branko Marcetic: In this case, there’s a middleman being unnecessarily inserted between people’s Medicare coverage and themselves. Second of all, Medicare Advantage does not show that there’s any cost efficiency. I think there was a report some years back that showed that actually the amount of overpayment in Medicare Advantage plans was something like over $100 billion over –
Marc Steiner: Over payments to provide.
Branko Marcetic: Yeah. And it’s because, as any good businessman will tell you, and as anyone who is a lover of the free market will tell you, what is it that businesses exist to do? They exist to maximize their profits. To make as much money as possible. And so of course, as we’ve seen with Medicare Advantage, what these companies end up doing, these third party companies, is they do things like, it’s called upcoding. And so they make a patient seem sicker than they are, because that way they get overpaid by Medicare. And then when they don’t end up spending all that money, they pocket what hasn’t been spent as a profit for themselves. Or they deny people care. That if it’s too expensive, then they’re just not going to do it. Or they say, well, you’re going to have to shoulder more of this cost burden because this procedure is so expensive. And there’s a real risk that’s going to happen basically as all these seniors get dumped onto this ACO REACH program.
Marc Steiner: So I’m curious what you think about, what your analysis is of the political end of this. I mean, clearly there are people in Congress and around the country, the members of the progressive caucus. I think 50 people signed the petition to Biden to end this, to end this Trump plan. He refused to do it. He has, well, he’s not done it. And it’s going to run through the end of his term. And so, I mean this, what’s happening here could actually really open the door to erode Medicare and create a private system taking over. So what is your analysis of A, what’s the political dynamic that allowed this to happen? Who are the forces that were around Trump in the beginning and others now around Biden who are allowing this to happen? And what are the forces to stop it?
Branko Marcetic: Well with Trump, we all know that the administration was rampantly corrupt. And of course it was a feeding frenzy for the corporate sector. Trump appointed people who were the most rapacious, private profiteers into the exact government departments and agencies that would’ve been overseeing the sector they were working in. And of course in this case, the person he appointed that designed this program was very much… He designed the program with the company that he had been working for before he entered the administration in mind.
Marc Steiner: And who was that?
Branko Marcetic: And they actually contracted with a company, this was an Intercept report. They contracted with a company that was set to benefit from this program to actually staff, basically the agency that was making it. Since then, yeah, you would think the Democrats would want to protect one of the greatest legacies that their party had created. However, number one, unfortunately, the Democrats are just captured by the corporate sector, as the Republicans are. Maybe not quite as in your face and obviously, but Biden took a lot of money from pharmaceuticals, health insurers, health insurance executives over the course of his campaign.
Beyond that, he’s put in people. I mean, Liz Fowler, who is sort of overseeing this ACO REACH or direct contracting program, as it used to be called. She herself has a background in private health insurance and pharmaceuticals. In fact, the company she used to work for, Anthem, they’re one of the… They’re an ACO, they’re an accountable care organization, so.
Marc Steiner: Right.
Branko Marcetic: So that’s number one, that’s sort of number two. I mean the last thing is that no one knows about this. This is why it’s been allowed to go on. It’s just quietly happening, and it’s been a real struggle for the people who are on the front lines trying to prevent this and trying to raise the alarm about it. The biggest fight has just been to let people know it’s happening so that they can get sufficiently outraged and worried and get in touch with their elected representatives and tell them to stop it. And it’s been a real uphill battle. And unfortunately the Biden administration may face some pushback.
And what they did was they basically acted along the lines of exactly what the industry had requested in a letter. And they simply just rebranded the program and made a few cosmetic changes. But they rebranded basically to take the toxicity of that first name, the first label Direct Contracting. That became too unpopular, that became associated with something that people didn’t want. So you know what, we’ll just change it. Now it’s called ACO REACH, and that’s done and dusted. We can just keep going forward with it. So they’re trying to avoid the growing, I think, public and political opposition to this.
Marc Steiner: Well, what’s so insidious about this to me, in part, is that the guy, the person you were alluding to a moment ago, Adam Boehler, I think his name was. B-O-E-H-L-E-R, Adam Boehler, who was a best friend of Jared Kushner, the son-in-law, founded this thing called Landmark Health. And he’s the one who created this program for Trump. So it’s literally what you were saying. The private industry is coming in to create a program for his own benefit that screws us.
Branko Marcetic: Yeah, exactly. And I mean it’s, again, this will be a very simple thing to just end the pilot program.
Marc Steiner: Right. So the question becomes, politically, why isn’t he just ending it? Saying, no, we’re not going to do this. I mean, he knows where it comes from. Biden’s not a dummy. You know what I’m saying? He knows who founded this and who it’s benefiting. What do you think the dynamic is here?
Branko Marcetic: I mean again, I think part of it is the corporate capture that does reign in both parties. I think part of it is there is a large faction of the Democratic Party, the sort of party elite. The people that they tend to put in some of these roles, these government roles, who genuinely do seem to believe that the private sector is the answer to everything. But what was actually quite remarkable is one of the people I spoke to, one of the activists who was fighting against this, told me months ago, when they finally won a meeting with Liz Fowler to express their concerns, she said that Liz Fowler told them, look, we agree with you. If we were starting from scratch, we would go with a single payer system. But we’re not starting from scratch and so we’re not going to do that. [Marc laughs]
Which shows you – Yeah, pretty remarkable, right? I mean that suggests that they are aware that, obviously, a Medicare for all system, a government-run health insurance system that takes the provision of health out of for-profit hands, decommodifies it, and makes it a public good. They do understand some level that is the better way to go. But whether it’s corruption or whether it’s just some sort of ideological rigidity, I don’t know. They are just going along with this attempt to try and basically privatize this system.
Marc Steiner: Not to digress on this too much because of your time on the air, but I can’t help but think. I’ve been doing this series that we’re going to push even harder called The Rise of the Right, with Bill Fletcher Jr. And I keep thinking to myself, when I read your article and started doing research on some of things you’ve been writing, other people have been writing and what’s behind all this. It just strikes me that people actually campaigned and fought around this issue and told the truth through media, organizing, community groups, whatever. That this is a way to undercut the right wing. Because people are saying, what? You’re going to take away my Medicare? You’re going to do what? Do you know what I’m saying? I mean it’s just like it’s right there. I mean it’s clear cut that they’re allowing private industry to come rip us off.
Branko Marcetic: Yeah. I mean it’s completely mind boggling. And one of the other remarkable things is that in this meeting with Liz Fowler, she told these activists that you can’t opt out of this. Once you have been randomly selected to be in this pilot project, that’s it, you have to be. You can’t get out of it, except unless you change doctors. Because that’s how it works. The doctors get enrolled in the ACO REACH. So if you happen to have a doctor who has been enrolled there, you, by virtue of that, are also in. So you have to swap doctors to get out. Which, number one, if you’re in a rural area, is very difficult. Number two, when you have spent your entire life or years, decades, seeing the same doctor, particularly if you’re an elderly person, that’s not a small thing to just suddenly change doctors.
There’s a large degree of trust in that relationship. You rely on that person. It’s not that simple to just willy nilly swap and go with someone else. And we might think back to how outraged people were in 2009, 2010. What was the big attack against Obamacare? Which wasn’t really true, but this was the right-wing attack, was that Obamacare was going to make you lose your doctor. And people were very angry, quite understandably. And yet now the Biden administration is pursuing a policy that effectively tells people, hey, you either have to be enrolled in a semi-privatized system that you explicitly chose not to be, or you have to change doctors. And incredibly, I can’t think of something more politically unpopular and unpalatable to give to the voting public. And yet that is what they’re going for. So even on a political level, this does not make any sense to me.
Marc Steiner: So in your analyzing what’s going on and talking to people around the country and talking to advocates around the country in the pieces you’ve been writing, where do you see this opposition coming from? What kind of organized effort do you think is going to stand up and fight this? I mean when you’ve got… I think you wrote about the entire City Council of Seattle, and even the conservative AMA in Arizona. That’s what blew my mind, that they’re saying, no, this is a bad idea. And they don’t like single payer. So where do you see the opposition coming from, and how do you see this playing out?
Branko Marcetic: Well, number one, there is a huge collection of grassroots activists. They’re being led by the Physicians for National Healthcare Program, PNHP. They have really been fighting for this and fighting to not just raise awareness among people, but also to brief Congress people and to get Congress to state their opposition and to stand against this. They’ve got a, I think thousands of people, tens of thousands of healthcare professionals around the country who have signed petitions saying, we’re not for this. So there’s the activists who are trying to do that. The Seattle City Council and the Arizona Medical Association, those are key examples too because it shows that this issue is slowly filtering out into wider consciousness.
No one knew about this. I didn’t know about this until very late. Even though PNHP was working throughout all of 2021 to try and get people to oppose this. So it’s only slowly coming out and being made aware to people. And I think the fact that the Seattle City Council passed… And the person who introduced the resolution against it is fairly progressive but not some sort of radical or anything, you know? And I think it shows that there… Once people find out about what this actually is, it’s toxically unpopular. No one wants to semi privatize Medicare, or threaten seniors with having to change their doctors.
So I hope that those two votes are just the beginning. And I hope that there’s… As time goes on, we see more opposition and more awareness being raised. And I think anyone who’s listening to this broadcast, they should read the piece. They should read every piece they can about it. And they should tell people. They should try and tell people through word of mouth that this is happening. Because, ultimately, that’s part of how the opposition is going to spread. The people are only going to oppose this if they actually know that it’s happening. If they don’t know it’s happening, then there’s not going to be that groundswell opposition.
Marc Steiner: This is really, it was a really good article. And I’m glad you brought this up, and we’ll keep abreast of this with you and others and see where this goes, and see if we can’t get different activists talking about this. And I want to thank you again, Branko, for the article. It was a really good article. And for joining us here, it’s good to have you with us.
Branko Marcetic: Thank you. Thank you for raising the issue up.
Marc Steiner: It’s really important. I want to thank you all for joining us today, out there who are listening. This podcast, and you can find links and more about all of this here at The Steiner Show site on Real News. And please let me know what you think about what you heard today, what you’d like us to cover. Just write to me at firstname.lastname@example.org. I’ll get right back to you. I want to thank Adam Coley, Stephen Frank, and Kayla Rivara for making the show possible today, and our hardworking creative crew here at The Real News. And thank you again for joining us. I’m Marc Steiner. Stay involved, keep listening, take care, and don’t let them take advantage of us.