JONATHAN COHN JUNE 1, 2011
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Very Serious People ™ continue to accuse the Democrats of dishonesty and demagoguery on Medicare. On Sunday, it was the Washington Post’s Ruth Marcus during an appearance on “Meet the Press.” Today it is Time’s Don Von Drehle, writing at the Swampland blog:
Medicare promises more to future retirees than it is going to be able to deliver. Change is urgently needed. ObamaCare envisions change within the existing structure of the health care industry, while Republican Paul Ryan’s proposal would impose change by having elderly patients buy their own coverage, using government vouchers. Both of these represent huge departures from the status quo. If this election educates voters to make an informed choice between these options, we’ll be a stronger country for it.
But we certainly didn’t see that sort of informative campaign in the special Congressional election in New York’s 26th District last week. Instead, we saw candidates accuse each other of trying to destroy Medicare.
Actually, Von Drehle has it half-right. Medicare does need to change. And, under the terms of the Affordable Care Act, Medicare will change. Specifically, the government (which runs Medicare) will take corporate welfare away from some insurance companies. It will reduce payments to providers while introducing payment reforms that encourage efficiency. It will create a series of budget targets for the program – and then empower an independent commission to enforce those targets, unless super-majorities in Congress overrule it.
There’s an honest debate to be had over how these changes will play out. Optimists will tell you that the reforms will turn the program into something much more efficient, providing beneficiaries with better and less costly care. Pessimists will tell you that the reforms will inevitably reduce seniors' access to treatment, as providers see fewer and fewer patients. But even if the pessimists are right – and, to be clear, I don’t think they are -- the program’s fundamental structure will remain the same, at least as far as beneficiaries are concerned. At worst, seniors might wait a little longer for services. They'd still have the assurance that they can pay for their medical care, no to mention better coverage of preventative services and prescription drugs (both of which the Affordable Care Act bolsters).
A smarter critique is that the payment reforms already in place don’t go far enough: That even if the law takes effect as planned, the program will still become too costly, too soon. I’m more sympathetic to that argument -- in fact, I’ve made it myself a few times. But I would also argue that the way to fix that problem is to move more quickly and aggressively on the law’s payment reforms, as President Obama has proposed doing, and then watch patiently to see which reforms work and which ones don’t. The complicated truth of Medicare is that you can't reduce the programs's spending too radically or too hastily -- unless you're willing to end the commitment this country has made to its seniors.
Of course, that is precisely Republicans propose to do -- and why it is perfectly accurate to say Republicans want to destroy Medicare.
Remember, they're not simply transforming a government insurance program with guaranteed benefits into a voucher scheme without them. They're also taking far more money out of the program. As I wrote just the other day, for what seems like the umpteenth time:
This is the essential point that Republicans and their supporters never mention. Over time, they would provide the program with dramatically less money than the Democrats would. It's difficult to find a hard estimate of how much exactly. But if you include proposed cuts to Medicaid (which pays for long-term care and other services the elderly use) and do some math based on the official Congressional Budget Office projections, you'll see that the Republican budget would reduce federal health care spending by an additional 7 to 9 points of gross domestic product by 2050. That's an immense difference.
Paul Krugman, who has been banging his head against the wall trying to get this point across, came up with a good analogy the other day:
think of Medicare as a footbridge that is deteriorating and will eventually become unsafe. You could propose structural repairs to fix its faults; Ryan doesn’t do that. Instead, he proposes knocking the bridge down and replacing it with trampolines, in the hope that pedestrians can bounce across the stream.
To extend the analogy a bit, I think it’s totally reasonable to suggest we need even more structural repairs – i.e., more Medicare payment reforms – than the Affordable Care Act has already begun. But it doesn’t change the fact the Republicans want to destroy the bridge altogether.
Steve Benen had a great post on this Sunday, after watching that "Meet the Press" in dismay:
I’m at a loss to understand what, exactly, Ruth Marcus, David Brooks, and their cohorts would have Dems do. Congressional Republicans have a plan to end Medicare and replace it with a privatized voucher scheme. The proposal would not only help rewrite the social contract, it would also shift crushing costs onto the backs of seniors, freeing up money for tax breaks for the wealthy. The plan is needlessly cruel, and any serious evaluation of the GOP’s arithmetic shows that the policy is a fraud.
Which part of this description is false? None of it, but apparently, Democrats just aren’t supposed to mention any of this.
Update: I see that House Budget Chairman Paul Ryan is now claiming that the Affordable Care Act "ends Medicare as we know it." Sigh. Igor Volsky explains why this is, um, wrong.
14 comments
So THIS is how the "elephant in the living room" is papered over. If the truth is too brutal, it's impolite to mention the truth? I really don't think so. The difference between the Repbulicans scare-mongering and the Democratic scare-mongering is that the Democratic scare-mongering is based on what the Republicans HAVE VOTED to do, while the Republican scare-mongering is based on falsehoods. Frankly I think seniors are correct to fear what the Republicans would do with Medicare if only they had the power, because of what the Republicans have SAID they would do. Oh, and Republicans are MUCH quicker to label what Democrats say as "fear-mongering", as if that changes the truth.
- AllanL5
June 1, 2011 at 10:09am
I like Chait's description of the Republican definition of "demagogue": to describe in accurate but unflattering terms.
- ramcat
June 1, 2011 at 10:21am
Ruth Marcus is, I believe, unimpressive. She spouts nothing but Conventional Wisdom, often not even based on much apparent claim to knowledge or any interesting twist. There seems to be an odd willingness by Very Serious People to shred the social safety net as a response to the finance sector disaster, and to do it without reference to underlying facts. You really do have to conclude Ruth Marcus et al. identify with the architects of the disaster but not with average folks facing the predictable miseries of old age.
- Walpole
June 1, 2011 at 11:01am
Although I despise the too common "On-the-Other-Hand" apprroach to balance in journalism, I think that it would be appropriate for conscientious outlets to append "in a more restrained and much more justified way than the way Republicans and their allies demagogued the Democrat's Health Care Reform Law for its cuts to Medicare" to every mention of Democrats demagoging the Republican Medicare "reform" proposal.
- aduncanson
June 1, 2011 at 12:39pm
Yes JC, and for the umpteenth time you have misrepresented relatively stable funding as a cut. Please! Just because you are willing to throw more and more of other people's money at something doesn't make it smart policy. Why do you and Krugman insist on this bullcrap? An unsustainable projected increase in spending is idiotic, and will not happen. Do you not see this? Please address what our spending should be, and not assume US HC spending at 25% GDP, which is what your comments imply - griping about nasty repub "cuts" - and drop the silly talking points, lest you become unreadable. I understand it is hard to keep up good work, and while history helps, you are only as good as your last sale, and lately there haven't been many.
- ds111
June 2, 2011 at 12:16am
"you have misrepresented relatively stable funding as a cut." I don't think so. The Ryan plan has Medicare funding growing at less than the rate of medical inflation. This means that the vouchers will necessarily be unable to purchase the same amount of care as time goes on. There's a 10% cut that will be incurred just due to greater overhead costs in the private insurance market. The nonpartisan CBO itself came out with numbers that showed the cost-shifting to seniors. So yes, it's a "cut" in that recipients won't be able to get the same benefits in the future, even if nominal expenditures go up. "An unsustainable projected increase in spending is idiotic, and will not happen." And who exactly has proposed this? As Cohn has pointed out, the ACA does have cost control measures. It provides for numerous programs to see what works. It has a payment advisory board with the directive to eliminate the least useful treatments if spending continues to rise above certain parameters (though it can be overridden by Congress). The only cost control measure in the overall health care system in the Ryan plan is the magic of the market, which has done a terrible job keeping premiums down in the individual insurance system, yet Ryan and his colleagues still seem to believe that it will work even though it hasn't worked anywhere else.
- dsimon
June 2, 2011 at 10:23pm
"The complicated truth of Medicare is that you can't reduce the programs's spending too radically or too hastily -- unless you're willing to end the commitment this country has made to its seniors. Of course, that is precisely Republicans propose to do -- and why it is perfectly accurate to say Republicans want to destroy Medicare." This isn't really a complicated truth. In fact, it's pretty straight forward.
dsimon, thanks for responding to ds111. He doesn't quite seem to get it, no matter how many different ways I've explained it. Maybe you'll have better luck.
- GSpinks
June 3, 2011 at 2:44pm
Spinks - I believe your explanations have been wanting, and not always tied to reality..as I've attempted to point out, though for time reasons I was unable to respond on the other thread (is there an easier way to follow up?). Simon, I don't always agree with CBO methodology and GIGO constraints, but they are usually clear as to their constraints. They have deemed ACA cost controls as weak, and leading to the "unsustainable" increase. Not sure they give sufficient credit to the provider response should IPAB get control. Also found their premium support "cost-shifting" projection a bit illogical and absurd, and inconsistent with their general projections on HC spending.
- ds111
June 3, 2011 at 4:30pm
I've said before, to Roi, I'll give you 8.7% federal (and state) spending on HC, which is the public spending of France on all HC. (they spend an additional 2.3% privately). As long as there remains a private market for additional, even excessive HC spending by private actors, this should be workable. You seem to want to put the cart before the horse - provision of ill-defined "adequate" care, without a $ constraint. Sentimental, but no dice on that. You must figure out how to provide adequate coverage, to all, within that 8.7% constraint. That is how a budget works. Premium support would probably be best in the US, but I've no gripe with single payor either, just would prefer to let the states decide, since they may not all go the same way.
- ds111
June 4, 2011 at 12:26am
ds111: "I don't always agree with CBO methodology and GIGO constraints, but they are usually clear as to their constraints. They have deemed ACA cost controls as weak..." Fine, people can disagree as to the analysis. But I think it remains the case that most Democrats realize that Medicare spending cannot continue increasing at unsustainable rates (indeed, that phrase would seem to be a tautology) and have made at least initial efforts to do something about it. And there doesn't seem to be a response to the explanation that the Ryan plan is indeed a "cut" in that government will not provide future seniors with the resources to purchase as much care in the private market as Medicare now provides.
- dsimon
June 4, 2011 at 10:05am
Here is the difference. The Democrats, conceptually, intend to cover seniors under a Medicare program that addresses their medical needs, but subjects the level of service to a socially supported and developing understanding of what constitutes "needs" in the delivery of medical care, given resource constraints. The Republicans intend to create a fixed dollar cap on the funds available to each senior who depends on government-funded care, and to allow the purchasing power of that fixed amount to dwindle in a free market with no regulatory constraints on what can be charged. Further, they intend to do it in a system in which such government subsidy as there is for costs like prescription drugs (their program) has the effect raising the cost of the service and giving higher profits to the private sector. They will not permit government to use collective purchasing power to reduce the overall cost. Thus, whatever weakness there is in the Democrats' actual legislation in terms of cost control, it's a failure of execution, not part of the plan. The Republican plan is to let costs mushroom for private enrichment and leave seniors mostly on their own looking for care, with no particular logic driving what care they can obtain. The Democrats would like to create mechanisms that have us look collectively at the total budget for health care, find ways to reduce it while maintaining a prudent level of care, and relieve seniors of worries about how they will be able to obtain necessary, basic care, and reasonable access to the miracles of modern medicine. Democrats, obviously, are open to mechanisms that preserve choice and avoid the sin of comprehensive central planning. Republicans merely seek a cosmetic cover for a program of defunding senior medical care. I prefer the Democrats.
- Walpole
June 4, 2011 at 12:21pm
Count me skeptical that Dems have any plan to do anything about the growth in fed HC spending - clearly CBO sees things the same way. Including ACA subsidies, here are CBO projections for fed HC spending as % GDP: Now. 5.50 Plan: ACA/Ryan 2022. 7.75/5.50 2030. 9.75/6.00 2040. 12.00/5.75 2050. 13.75/4.75 So it is not really a cut, until the very out years, and I and most would agree that it appears unnecessarily skimpy, and would need a bit more revenue than Ryan targeted - the dope should have stuck to Ryan/Rivlin!) Also in fairness ACA numbers include substantial subsidies, but also require higher revenues to cover them. And this is just the federal portion. While there would be some displacement, the state and private portion are expected to be an additional 10% GDP. Anybody looking at this? You are right that future public resources spent will be lower than today's should HC costs exceed GDP growth, but that must happen in either case - one way or the other, HC cost growth will be reined in - that is the real cut, and all agree it is necessary. More later I hope.
- ds111
June 4, 2011 at 12:25pm
The projection of the ACA costs over time are not worth much, since they can't possibly take into account changing practices in the delivery of health care. The projections of the Ryan plan are nominally a fixed figure, but politics can certainly change them. So projections have limited value. It's the working plan that matters, and the likelihood that it a) creates incentives to reduce total health care costs while b) serving basic needs. I don't see how the Ryan plan is well designed to achieve either goal.
- Walpole
June 4, 2011 at 8:23pm
Walpole, you trust Dems to follow thru with a workable plan. Much of the populace doesn't agree with you. Medicare and SS have grown dramatically since introduced, far beyond any expectations, and placed the burden on current and future taxpayers, always kicking the can down the road. Why so much trust now? The right thing to do would be to accept a fixed amount of govt spending as % GDP, ideally for all public HC funding (France is 8.7%), and figure out what that will buy. That you are unwilling to accept that suggests a lack of confidence on your part - you would commit to spending whatever it takes, trusting that you could control that spending, but without any reasonable limitations on your draw on the public purse. Why would any trust that, given the bipartisan reckless spending histories of other public programs in the US? No, a (relatively) fixed fed commitment is the right way to go. Ryan's plan would never have passed, because it was unrealistic, but it was at least conceptually right about fixing a spending % - of something (should have been GDP, and included all public HC).
- ds111
June 6, 2011 at 10:37pm