Why Am I Guessing That Topsy-Turvy Positions on Medicare Will End Up Costing Us More Money?

Nick Gillespie | September 30, 2009

One of the main ways that virtually any health care reform currently under discussion plans to achieve its cost-cutting goals is by cutting Medicare spending. Which has metastisized like about the biggest tumor you can imagine, plus 1,000 percent.

Despite President Bush's creation of the massive prescription-drug benefit (which got a good share of support from his party), the Republicans, in general, have long been in favor of cutting Medicare spending. To wit:

Ronald Reagan proposed cutting $1 billion in Medicare spending while president in 1981, when the program cost just $40 billion a year.

In the mid-1990s, congressional Republicans proposed deep cuts in Medicare and Medicaid to pay for tax cuts. That sparked a backlash and gave President Bill Clinton his best weapon to fight back against the Republican "Contract With America."

Incidentally, congressional Republicans did not propose "deep cuts" in Medicare (would that they had). Rather, they proposed slowing the rate of spending increases, which passes for budget discipline in Washington. Now, though, the GOP is singing a very different tune. In August, the GOP unveiled its "seniors' health care bill of rights" which opposes any cuts in Medicare.

And what about the forces that typically support Medicare spending and bitch and moan about even the smallest cuts? The Wash Post reports that

The hospital associations, AARP and other powerful interest groups that usually howl over Medicare cuts have also switched sides. Last week, they stood silent as the Senate Finance Committee debated a plan to slice more than $400 billion over the next decade from Medicare, the revered federal insurance program for people over 65, and Medicaid, which also serves many seniors.

The Post further notes that "Cutting Medicare does not necessarily mean reducing spending but rather slowing its rate of growth."

To translate this into worst-case-scenario politicalese: Get ready for more spending on Medicare than you've ever seen, now that you've got the GOP on record as opposing any cuts and the Dems making a full-court press on insuring the uninsured. Somewhere somehow, I'm betting that the final outcome will be what it always is: a pile of money shoved toward seniors, who are making up something like 20 percent of the electorate, and a pile of money shoved at everyone else at the table.

You, me, and the rest of us who are more than 10 years from retirement are not at the table. Which means we can pay for the drinks and motorized scooters.

A note about Medicare that should transfer immediately into any discussion about government-run or mandated coverage plans: The president's own Council of Economic Advisers has determined that "Nearly 30 percent of Medicare's costs could be saved without adverse health consequences." Put another way, the program, the most relevant model of a single-payer system we have in the U.S. (one that's been around since 1965), is wasting close to one-third of its dollars. That's the program the GOP has now pledged to support with a "Bill of Rights." And it's one that the Dems are looking to foist on the rest of us.

Comments

JB|9.30.09 @ 12:50PM|#

Fuck old people. They can pay for their own shit or they can die.

Maybe they would raise their kids better if they knew they had to depend on them.

|9.30.09 @ 12:53PM|#

Somewhere somehow, I'm betting that the final outcome will be what it always is: a pile of money shoved toward seniors, who are making up something like 20 percent of the electorate, and a pile of money shoved at everyone else at the table.

Ah, compromise.

Anonymous|9.30.09 @ 12:56PM|#

Maybe they would raise their kids better if they knew they had to depend on them.

The last half century of political speech has been one lesson in how the government now fills the role that the family once used to.

|9.30.09 @ 1:01PM|#

Somewhere somehow, I'm betting that the final outcome will be what it always is: a pile of money shoved toward seniors, who are making up something like 20 percent of the electorate, and a pile of money shoved at everyone else at the table.

The GOP's betting (and is probably right) that there's no way they can do that without massive tax hikes or a huge debt increase as scored by CBO. It was an attempt to drive a wedge between seniors and the bill in order to defeat it.

CBO won't score the cuts unless they're actually in the law (and not vague promises of "we'll do it later, but first dessert!"), and the rhetoric makes it hard for them to actually include them.

The only way to stop the bill is to divide the Democrats. That is achieved by several tactics:

1) Press amendments to ban government subsidized plans from paying for abortions. (Without this stricter version, money is fungible.) That would actually reduce access to abortion by crowding out. Many moderate Dems would vote for the amendment, but liberal Dems would jump ship if it were added.

2) Try to make the deal increase the deficit too much to upset the moderate Dems. This requires a bit of political pressure to stampede the liberal Dems into voting for more spending. A risky plan for most GOP voters, since unlike 1) it can backfire if the plan passes anyway.

3) Preserving the deal with the drug companies arguably is similar, as it upsets the liberal Dems... but if they strip it on the Senate floor, there are Dems from drug company states that will feel pressure.

|9.30.09 @ 1:02PM|#

This is always my argument against UHI to moderate liberals - I'm not *as* worried about what it will cost now as what it will cost 50 years from now. I'm willing to listen to sensible lefties talking about public options and whatnot, but so far no one has been able to assure me that this won't balloon into another gigantic, badly managed, wasteful government program. Also, I'm wondering, 50 years from now are we going to see another market collapse resulting from insurance companies assuming "hey, they're telling me I've got to cover everybody, it's not like they'll let me fail - they're forcing me to do bad business in the first place." It could be Fannie Mae/Freddy Mac all over again.

Warty|9.30.09 @ 1:02PM|#

Send in the shock troops

|9.30.09 @ 1:05PM|#

Which means we can pay for the drinks and motorized scooters

AGEIST!

|9.30.09 @ 1:12PM|#

I propose that the term parasitic gerontocracy be used more often in this context.

Joe M|9.30.09 @ 1:13PM|#

Travis2, I think you're being pretty optimistic. Fifty years? We'll never make it that long. Try fifteen.

creech|9.30.09 @ 1:14PM|#

There should be a huge opportunity here for Libertarians with twenty and thirty-somethings.
How should we get their attention?

¢|9.30.09 @ 1:14PM|#

Also, I'm wondering, 50 years from now are we going to see another market collapse resulting from insurance companies...

Crazy talk. That'll only take ten years. There's an election in 2020 to throw.

Jeneane Garofalo|9.30.09 @ 1:27PM|#

"Send in the shock troops"

More like victims of obesity.

Alan Vanneman|9.30.09 @ 1:28PM|#

Shut up, Nick, or I won't give you a ride on my scooter.

AK|9.30.09 @ 1:32PM|#

"Nearly 30 percent of Medicare's costs could be saved without adverse health consequences."

My response to this is: THEN DO IT! If Obama comes up with a real way to trim Medicare by 30% without affecting care, and it works, I'll donate the maximum to his reelection campaign, support him reforming the rest of the health care system as he desires, and give him a beej.

|9.30.09 @ 5:28PM|#

As much as I agree Medicare is horribly wasteful, I'd take anything on this issue from Obama's Council of Economic Yes-Men with a 55-gallon drum of salt. His Hopiness needs there to be huge potential savings in streamlining Medicare, so their advice will be that they're there.

|10.1.09 @ 11:23AM|#

Many seem to think that Medicare is a socialist type program with a single payer provision. Wrong!! Seniors paid in all their lives through payroll deduction and now if on regular medicare they have to also get a supplement that cost about $2,000 plus medicare or the supplement does not cover everything and the average out-of-pocket in near $1,000. Not free by any stretch. Annual cost is over $4,000.
Then if you have the medicare advantgage plan, the senior pays a monthly premium to an insurance company and then co-pays every time they see the doctor or hospital or emergency, etc. That of course is on top of the money they pay into medicare each month which is near $1,200. The advantage plans usually give some extras that Medicare doesn't provide like eye care, dentists, free YMCA memberships, etc. Not all, but some. Some 10 million seniors are on the advantage plans of which there are many to choose from.