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Medicare is an expensive program that still leaves beneficiaries with large deductibles and co-payments, and it shortchanges doctors on reimbursements.

One obvious solution is to cut back the bloated payments to private insurance companies which, on average, get 13 percent more than it costs Medicare to offer services itself.

Congress agrees. It voted, 355-59, to block a scheduled cut in doctors’ payments by reducing subsidies to insurance companies that manage the privatized portion of the program. President Bush, however, has promised a veto.

The battle between Congress and President Bush raises the larger issue of privatization, particularly privatization of functions that the private sector either can’t or won’t provide. Health insurance for the elderly is a classic example. Private insurers wanted no part of insuring an elderly population that was prone to file expensive insurance claims; it’s more profitable to sell policies to healthy 25-year-olds. The government was the only viable option for elderly health care, which is why Medicare was created in 1964.

For 33 years, Medicare operated successfully as a single-payer program, but then private insurers demanded a piece of the action. In 1997, President Clinton signed a bill that created Medicare Advantage, and the program was significantly expanded in 2003 as part of the law that created the Medicare prescription drug benefit. Nearly a quarter of Medicare’s 44 million recipients now get insurance through the privatized program.

The privatized program is more expensive than traditional Medicare. The subsidy that’s required to get private insurers to participate costs the federal government $13 billion per year, and there’s little evidence that Medicare Advantage provides better coverage for beneficiaries. According to the American Medical Association, 45 percent of Medicare Advantage policyholders have experienced denial of services typically covered in traditional Medicare, and Wisconsin U.S. Senator Herb Kohl held a hearing last year to address misleading and fraudulent sales tactics of Medicare Advantage providers.

It’s foolish to believe that the same private sector that had no interest in providing an unprofitable service will efficiently provide that same service if given a government subsidy. Like the subsidized student loan program, Medicare Advantage is nothing more than crony capitalism in which insurance companies receive a guaranteed profit with taxpayers shouldering all the risk. Instead of blurring the line between public and private, public programs should be run by the public for the benefit of the public. We can start by abolishing Medicare Advantage.