Medicare in Treacherous Markets: From Community Bake Sales to Private Equity

Medicare's 60th birthday marks a shocking milestone for social democrats: More than half of all beneficiaries are signed up with private insurance plans that routinely deny payments. This article flips the focus from the government program itself to the broader health care markets in which Medicare operates. It shows how Medicare has lived through four very different health market eras, each involving new kinds of medical institutions, new financial logics, and new thinking about what markets are and what role they ought to play in the program. First, during the long battle over Medicare, government programs and markets were (quite mistakenly) viewed as simple opposites. Second, in the 1970s, a new view emerged: Competition between HMOs would provide enrollees choice of providers, enhancing quality and lowering costs. Third, in the 1980s, Republicans drew on rhetorical images from a bygone era to press market choices into Medicare. As conservatives were imagining medical markets, corporations arrived, asserted vast controls over medicine, and redirected consumer choice itself—rather than selecting between health providers, consumers were pushed to select insurance plans that ended up limiting the choice of doctors and hospitals. Finally, in the 2000s, private equity poured into health care and once again transformed the market. By Medicare's 60th birthday, enrollees found themselves in a turbulent new era as health care in America was becoming increasingly monetized.