Political Animal


August 16, 2012 2:40 PM Waldman Boils It All Down on Medicare

By Ed Kilgore

Does Medicare, and the endless political arguments over that program, confuse you? If not, you are a rare and blessed beast. I read and write about Medicare all the time, and have for decades, but still sometimes get tripped up in the weeds.

So if you are like me, I strongly encourage you to take the time to read Paul Waldman’s relatively brief and remarkably lucid discussion of the two parties’ Medicare proposals at TAP. Here’s the kicker, involving the Obama and Romney/Ryan approaches to restraining Medicare’s long-range costs:

Through the Affordable Care Act, Obama uses a variety of means-dozens of them, actually-to attempt to bring down costs within the existing program. But he does it while retaining Medicare’s guarantee of coverage. Romney, on the other hand, explicitly refuses to entertain changes within Medicare itself. He doesn’t propose changing the way Medicare pays for care, or suggest any pilot programs or any incentives to lower costs. Instead, he hopes that that competition with private insurers is all that’s necessary to bring those costs down. If that doesn’t work, his plan will shift more and more of the expense onto the seniors themselves. One approach says we can shape this program to make it work as well as possible and use it to leverage the kind of changes we’d all like to see in the broader health care market. The other says if we just get government out of the way, the market will produce optimal results on its own. The Obama approach includes some uncertainty; improving on a large and complex government program isn’t easy, and it’s likely that some of the reforms in the ACA will work better than others. So it’s possible it won’t succeed. But if Romney was right, the private insurance market would already be outperforming Medicare. And we know that hasn’t happened.

Beyond that, I might add, Obama’s approach uses Medicare’s massive leverage to execute cost-saving improvements in how the entire health-care system operates, while the Romney/Ryan approach exposes Medicare much more than it is today to the cost pressures of the private market-place, which have boosted, not restrained, prices, even as it makes tomorrow’s retirees more “individually responsible” (i.e., stuck with the bill for) their health care.

So you can either listen to or take with a grain of salt all the charges and counter-charges of “Medicare cuts.” What’s really going on is an obscured but very real debate over two fundamentally different views of government’s role in a mixed public-private health care system.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.


  • Old Uncle Dave on August 16, 2012 3:17 PM:

    Competition between insurance companies won't reduce prices any more than competition between oil companies reduces the pump price of gasoline.

    What used to be called price fixing or combination in restraint of trade is now called "free market capitalism."

  • T2 on August 16, 2012 3:23 PM:

    whew...."obscured" is right. Thanks to the Media, the average guy now believes it is Obama that wants to torpedo Medicare. But really, the Ryan/Romney plan is flawed to the core. Just like the "privatize Social Security" idea is flawed.....It goes like this, we will take away the guarantee that makes your life better and replace it with a crap shoot. We won't guarantee your healthcare, we'll give you money to pay a company and hope the company will pay you enough when you need it or else.....you die.
    We'll not give you your SocSec check, we'll give you some money to put in the Stock Market so the next time our Conservative Economic Plan hurtles off the cliff, you'll be left with Zero money and the Wall Street brokers will be rich.

    You just marvel at why people don't understand such a simple choice.

  • Peter C on August 16, 2012 3:50 PM:

    Thanks Ed, you're right, that's a very clear explanation.

    This is exactly the sort of information WE need, because we must go out and educate our fellow citizens.

    Our opportunity here is real, though. Anyone whom we can convince will not only better understand the differences between the two approaches, but will also see the blatant dishonesty of the Romney/Ryan campaign. I still believe that the vast majority of Americans HATE being lied to. When lower-income 'low information voters' realize that rich people (like Romney and Rick Scott 'the Medicare fraudster') are lying to them to line their own pockets, they may well re-evaluate the whole 'Republican brand' in a significant way.

  • FlipYrWhig on August 16, 2012 4:43 PM:

    This whole brouhaha seems fairly easy to knock down. Obama can say, "We did a thorough review of Medicare and found hundreds of billions of dollars in savings, which we could recover without jeopardizing anyone's benefits or care. And yet the party that's always saying the government spends too freely says they have a problem with that -- they want to undo what we accomplished and put hundreds of billions of dollars in waste back into the budget. They want the government to squander billions, and they're making a ruckus about it. Does that make a lot of sense to anyone?"

  • paul on August 16, 2012 8:59 PM:

    It's really simple: if Obama's plan fails, we all share the resulting burden. If Romney and Ryan's plan fails, sick old people bear the burden alone.

  • emjayay on August 16, 2012 11:29 PM:

    In all the many decades of free market health insurance in this country, when did the health insurers make systemic changes in health care delivery to improve quality and reduce cost? They didn't, because they couldn't. They could decide what to pay for and how much, which controls costs and may at times limit ineffective or more expensive but not better treatment, but then each provider is dealing with ten different insurers with different ideas about what to approve and how much it should cost and has to employ more staff to deal with all of it.

    They couldn't do the systemic stuff, because they were all competing for a piece of the pie. Who did stuff like that? Mayo Clinic, Kaiser Permanente, the VA - because they were in control of a whole system. A decade ago at least Kaiser and the VA went to computerized health records.

    I know everyone hates centralized HMO's and big government, but in some ways they work better. Kaiser isn't competing with someone else to have or use more MRI's, and their doctors have no incentive to order more tests and expensive treatments and therapies because they have a piece of the test or treatment or therapy pie, because Kaiser owns everything. The docs are on salary, not piecework.

    My doctor today, good as he is, pulls out a file folder of scribbled notes and stuff and paws through it, and if I am somewhere else there is no access to the information.

    Medicare isn't the same thing, but by being big and having everyone in it can exercise some of the same power, which under Obama it is starting to do. That's how to provide better outcomes and hold down costs. There is no evidence that the Ryan competition for your voucher sysem does any of that.

  • bob h on August 17, 2012 6:38 AM:

    If we accept the $6400 figure for the Ryan voucher, then we will soon be talking about dog and cat food, because the average retirement income for those 65 and above is about $29,000. Traditional Medicare itself is a burden for many seniors. For those below this average, the voucher burden will be too great.