Wednesday, April 13, 2011

Republicans Abandon Winning 2010 Strategy with Medicare Privatization Plan

David Dayen Monday April 4, 2011

As many on the blogosphere have been noting for months, the only policy item Republicans used to win election in November 2010 was an odd defense of Medicare. They accused Democrats who voted for the Affordable Care Act of cutting $523 billion in Medicare funding to “pay for Obama-care.” They positioned themselves as the defenders of senior citizens. They created TV ads and mailers with this same theme. It wasn’t all that true – but it’s what Republicans used to win the House of Representatives, and it worked. Their base of elderly voters were very taken by the message and came out in force to defeat those they were told just cut their Medicare.

Flash forward five months, and now Republicans are about to unveil a budget that privatizes Medicare. It ends enrollment to the single-payer program entirely within 10 years, and everybody else who reaches the age of 65 gets a voucher they can use to purchase health insurance on the private market. The voucher’s value does not increase over time even as health insurance rates rise, so it will cover less and less of the cost of insurance. These Medicare-certified private plans, ironically, would live on an exchange, much like the private market in the Affordable Care Act. But two things here: one, the Medicare certification would have no standards like essential benefits, annual limits and minimum guarantees, unlike the vision for insurance exchanges in the ACA; and two, this would cost more money overall, since Medicare is much cheaper than private insurance, similar to all single-payer health care systems. The burden of that additional cost would fall on the individual, as the voucher would stretch less over time.

The same people who won election based on a dubious claim about Democrats cutting Medicare are about to eliminate Medicare and replace it with a free market approach that doesn’t guarantee coverage. They hope the invisible hand of the free market will spur innovation and lower costs over time, but the free market in US health care currently is also the most broken, with the highest cost, the highest rate of cost increases, and the worst quality control. Media figures will probably tread lightly over all of these points, but it’s pretty simple: the Paul Ryan budget plans to end Medicare.

The Ryan plan is to get rid of Medicare and in place of it give seniors a voucher to buy health care insurance from private insurers. Now, what if you can’t buy as much as insurance or as much care as you need? Well, start saving now or just too bad.

Now, by any reasonable standard, that’s getting rid of Medicare. Abolishing Medicare. Phasing it out. Whatever you want to call it. Medicare is this single payer program that guarantees seniors health care, as noted above. Ryan’s plan pushes seniors into the private markets and give them a voucher. That’s called getting rid of the program. There’s simply no ifs or caveats about. That’s not cuts or slowing of the growth. That’s abolishing the whole program. Saying anything else is a lie.

Now, is this political suicide? I don’t think anyone has a good sense of how Americans interact with policy debates. I imagine there’s some way this could be sold to them as positive. Maybe “premium support,” the new Orwellian buzzword, will sound good to some people. Everyone likes support! But provided that this gets explained in something approaching clear language – and provided the opposition party actually mounts a defense – I can see this inspiring rage among precisely the people Republicans used to win the election in 2010.

It’s also worth wondering if the tax increases for 90% of Americans to pay for the tax cuts for the rich will be a feature of the Ryan budget, the way it was in the Roadmap.

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