Why Medicare Reform Is So Difficult


There's a lot to agree with in Kevin Drum's take on the political barriers to Medicare reform:

Both parties can talk about reform all they want, but when the campaign rubber hits the electoral road they know that attacking cuts to Medicare is the way to win votes. And if both Democrats and Republicans take turns bashing anyone who has the gall to cut back Medicare spending, then Medicare spending will never get cut back.

On a wonky note, it's worth pointing out just how outrageous this whole "no one over 55" approach is. If you don't want to rein in Medicare growth in the first place, that's fine. But if you do want to rein in Medicare growth, current and near seniors are the #1 group that should be required to share in the pain. Seniors all like to think that they're just getting their due from a system they paid into all their lives, but it ain't true. They paid a pittance compared to what they're taking out. People in my generation, and the one before mine, will end up getting far more in Medicare benefits than we ever paid in.

I wouldn't quite say it's "outrageous" that seniors are exempt from the changes brought on by the reforms in Paul Ryan's plan. Regardless of what they paid in, the federal government sold them on certain expectations about what sorts of benefits would be available, and it's not entirely unreasonable to design a reform plan that phases in changes over a period of time in order to facilitate planning.

But it's certainly true that a reform plan that started immediately would be far more effective, that seniors often seem deluded about the value of the contributions versus their benefits, and that the majority of politicians in both parties have proven stubbornly unwilling to prepare the public for the challenges of reform. President Obama sells ObamaCare on the argument that it strengthens the Medicare trust fund without mentioning that it only does so if you double count the Medicare savings. Romney is running an evasive and sketchy Medicare reform proposal as well as an explicit promise to repeal the Medicare cuts in ObamaCare. This suggests how challenging it would be to introduce a reform plan that, as Drum says, makes current beneficiaries share the pain. And given Medicare's size and place in the budget firmament, it is not an equilibrium that bodes well for the federal government's long term fiscal health.