A coalition of labor unions, consumers and advocacy organizations last week launched a $1 million campaign to stop the privatization of Medicare. The groups are demanding that Congress stop the overpayments to insurance companies that the companies are using to lure people out of Original Medicare and into their private Medicare plans.

Members of the coalition include the American Federation of State, County and Municipal Employees (AFSCME), the Alliance for Retired Americans, the Committee to Preserve Social Security and Medicare, the Medicare Rights Center and Americans United for Change, a group formed to fight President Bush’s proposal to privatize Social Security.

Private Medicare Advantage plans receive subsidies for providing Medicare benefits that average 12 percent more than the costs of care under Original Medicare, according to the independent, nonpartisan Medicare Payment Advisory Commission. Those excess payments take two years off the date the Part A trust fund for hospital insurance is slated to become insolvent, according to Medicare’s actuaries.

“There is no justification for wasting our precious resources to subsidize private companies to provide Medicare insurance that can be provided more cheaply and efficiently by traditional Medicare,” said Chuck Loveless, legislative director of AFSCME. “Congress must eliminate subsidies for Medicare Advantage plans before overpayments destroy the one big American health insurance success story.”