Political Animal


September 19, 2011 3:10 PM Not all Medicare cuts are created equal

By Steve Benen

When evaluating any debt-reduction plan, I get the sense some immediately ask a surface-level question: does it cut Medicare? If it does, the plan is misguided (or terrific, if you’re not a fan of Medicare). If it doesn’t, then we can move on to other concerns.

The problem, of course, is that this kind analysis is superficial. Medicare, unlike Social Security, faces legitimate fiscal problems and will need meaningful reforms. Indeed, as any objective look at the nation’s long-term financing shows, the United States doesn’t really have a long-term debt problem, so much as we have a long-term cost-of-healthcare problem. As Jared Bernstein put it recently, “As long as health care costs (and, as the population ages, demand for services) continue to spiral up, it’s going to create huge problems.”

Given this, policies that “cut” Medicare deserve scrutiny, but to reject them reflexively is a mistake. Not all Medicare cuts are created equal. Those who want to increase the Medicare eligibility age are not in the same boat as those who want to tweak hospital reimbursement formulas.

As for President Obama’s debt reduction plan, Jonathan Cohn does a nice job walking though some of the proposed changes to Medicare the administration intends to pursue.

[T]he cuts Obama has in mind are more or less consistent with the kind of cuts that you find in the Affordable Care Act: They are reductions designed to change the way Medicare pays for treatment and services, ideally (although not always) in ways that will actually improve the efficiency or quality of care. To the extent they would force individual seniors to pay more, it’d be in the form of higher premiums from wealthy seniors or higher co-pays for treatments likely to be unnecessary or wasteful.

In short, if this proposal were to become law — fat chance, I know — the providers of health care along with wealthy seniors would have to make do with less. And, with any luck, health care will actually get a little better as a result.

Jonathan goes through some of the policy details, and it’s well worth reading.

I’d just add one related note about politics. I’ve seen some suggestions that, even if some fiscal reforms to Medicare are reasonable from a policy perspective, Democrats would be foolish to propose any such changes for political reasons — Dems want to go on the offensive on Medicare in the 2012 elections, and if the party supports Medicare cuts, the edge disappears.

I understand the point, but I disagree with the analysis. The House Republican budget plan, as crafted by Paul Ryan, didn’t tweak Medicare financing, it literally eliminated Medicare from existence, replacing it with a privatized voucher scheme. Nearly every GOP lawmaker in the House and Senate voted for this garbage, and it helped Democrats flip a “red” district to “blue” in a special election in May.

A proposal from the White House for slightly higher out-of-pocket costs for home health care and Part B services isn’t comparable to — and doesn’t negate — the ridiculous Republican plan to end Medicare altogether. The plan presented by Obama this morning arguably makes the program stronger; the GOP plan obviously can’t say the same.

The Democratic edge on this issue, in other words, doesn’t simply disappear.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • Memekiller on September 19, 2011 3:27 PM:

    If we don't face a debt problem but a healthcare cost problem, why not offer Obamacare II as our debt-reduction policy? More healthcare reform would be the most effective and popular means of debt-reduction - without destroying the economy to achieve it.

  • slappy magoo on September 19, 2011 3:29 PM:

    The Democratic edge might not disappear, but it does get blurred. Because Dems usually suck at messaging. Republicans can accurately claim that the Dems want to "cut Medicare," never mind what constitutes those cuts.

    A smart Dem would lead with this in his or her campaign ads "President Obama has discovered ways Medicare can be more efficient, without denying a single person any medical care they truly need. Republicans think you're stupid enough to believe them when they say Obama is just cutting Medicare. Don't fall for their con. Support me, so I can support Obama's plan to make Medicare more efficient and solvent for generations to come.

  • Memekiller on September 19, 2011 3:31 PM:

    Reading through again, it sounds like this is healthcare reform, if you want to call it that. It comes down to, which is a more popular way to package this? As entitlement cuts, or more affordable care act? I'd say it's a two-fer - championing Obama's greatest success and asking for more, rather than fighting to save it from getting dismantled.

  • square1 on September 19, 2011 3:37 PM:

    Ah yes "some" say that all Medicare cuts are bad. Who are these foolish "some"? We are not told. I, for one, would love to find out though, since I have yet to see any notable liberals make such a blanket statement.

    One question, regarding this claim: A proposal from the White House for slightly higher out-of-pocket costs for home health care and Part B services isn’t comparable to — and doesn’t negate — the ridiculous Republican plan to end Medicare altogether.

    From a political standpoint, whether or not Ryan's plan and Obama's plan can be distinguished is irrelevant. The only thing that matters is whether voters will make such a distinction. If voters see all "Medicare cuts" as bad -- even if they aren't -- then it is profoundly stupid to deliberately cloud the issue by proposing alternative "good cuts". OTOH, if voters can make a distinction, then it isn't stupid.

    So far, I haven't seen any proof one way or the other. But are there really enough high-information voters who will vote FOR Democrats because Democrats are proposing smart Medicare reform to offset the numbers of low-information voters who stop seeing Democrats as defending the program?

    But let's look at the big picture. There will be no smart Medicare reform during the current Congress. None. Forget about it.

    And if the Democrats don't keep the White House, take back the House, and hold the Senate, we aren't getting any smart reform after 2012. So unless there is a strong political advantage to talking honestly about Medicare -- and, again, I'm not seeing any evidence of that -- I question the wisdom of the timing.

  • Anonymous on September 19, 2011 3:48 PM:

    Two words: Death Panels

    The media spreads GOP lies and the Dems suck at speaking coherently.

    It's best to not do that now no matter how much it may make sense.

  • howie on September 19, 2011 4:50 PM:

    Steve, Steve, Steve.

    The American voter doesn't DO nuance.

    Obama's cut will be seen as exactly the same as Ryan's death bill.

    The villagers will see to that.

  • Robert Waldmann on September 19, 2011 7:23 PM:

    I agree with your claims about policy and disagree with your claims about politics. The defence of the new proposed Medicare cuts is that they are similar to those in the PPACA. Republicans shellacked Democrats in 2010 in large part because of those cuts (they picked up more seats than one would forecast given the state of the economy etc).

    Yes Obama's proposed Medicare budget cuts are completely different from Ryans. So ? The PPACA cuts are completely different from death panels. you know that. Cohn knows that. Even I know that. But the low information voters who decide elections don't.

    I think "no cuts to Medicare or Social Security benefits" is the winning line. No exceptions for people with high incomes and dubious procedures. Of course I contradict myself, since the PPACA included no cuts of Medicare benefits. However, I think that refusal to squeeze providers more would cause so much villager outrage over Mediscare that it would be politically counterproductive.

    I'm not sure, since I don't know to what extent self perceived opinion leaders lead opinion. But higher Medicare premiums for the rich are bad politics. Also pointless. The deficit is the same whether rich people pay higher Medicare premiums or higher taxes, while the higher taxes are very popular and any change to Medicare is very unpopular.

  • Upper West on September 19, 2011 8:18 PM:

    I agree with all of the above. The 2010 elections proved (if any was needed) that subtlety is (unfortunately and disgracefully) for losers.

    Koch ads screamed "DEMS CUT 500B FROM MEDICARE" and millions voted in those who immediately voted to kill Medicare.

  • bob h on September 20, 2011 6:36 AM:

    The easiest thing to cut is Medicare Advantage subsidies, giveaways to the healthcare insurers, which are probably still too large even after ACA.

  • awake108 on September 20, 2011 11:57 AM:

    We shouldn't have to recreat the wheel. Mnay other countries are doing it better than we are. Why not take the best of these systems and do it one better. The insurance business in this country are part of the probleme taking billions out of health care AND DRIVING UP THE COST. Oh I forgot they buy our politicians.