Medicare Prescription Drug Benefit Prompted Proposed UnitedHealth, PacifiCare Merger, Op-Ed States

UnitedHealth Group's key motivation behind its proposed acquisition of PacifiCare Health Systems is the company's "desire to build on PacifiCare's leading position in the Medicare HMO business" before the Medicare Advantage program takes effect, Wall Street Journal columnist Holman Jenkins writes.

If President Bush "succeeds in turning Medicare into a program that subsidizes seniors to buy insurance rather than a program that pays for care directly," he might have resolved the nation's "biggest fiscal challenge," Jenkins writes. However, as costs increase, additional subsidies to seniors "could be restricted to those who meet a poverty test," and Medicare would become "a means-tested program for the poor," according to Jenkins.

In addition, Jenkins predicts that managed care "is facing gradual eclipse in the private sector by the new strategy of consumer-directed health care" and health savings accounts. Consumer-directed health care is about "turning health insurers back into insurance companies," he writes.

Jenkins writes that private insurers are a "a product of the massive taxpayer subsidy to employer-provided insurance," adding that they are "virtually practicing medicine while also deciding for us how much of the national income we should devote to health care" (Jenkins, Wall Street Journal, 7/13).

KPCC's "AirTalk" on Tuesday included a discussion of the merger. Guests on the program included:

• Gerald Kominski, associate director of the University of California-Los Angeles Center for Health Policy Research;
  
  
• Mark Lindsay, spokesperson for UnitedHealth;
  
  
• Anmol Mahal, president-elect of the California Medical Association;
  
  
• Howard Phanstiel, CEO of PacifiCare; and
  
  
• Anthony Wright, executive director of Health Access (Mantle, "AirTalk," KPCC, 7/12).