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The Hill reports that Paul Ryan's budget committee will propose huge Medicare and Medicaid reforms.  The Democratic response is gonna be epic.  The fight over public opinion for block granting Medicaid is probably winnable, but even that will take some care.  Reformers will have to lead with the present broken condition of Medicaid and present the block granting as a way to let states produce better results with less money.  The fight over Medicare will be much harder.  Almost everyone is a current or prospective stakeholder in Medicare.  Defined contribution Medicare (where the government gives a set amount of money and the recipient uses the money to purchase from a range of health care plans) is a policy proposal that is almost entirely unknown to the public.  I would be surprised if one in fifty Americans could accurately describe defined contribution health care.  If you were to write down a neutral, one sentence description of a defined contribution version of Medicare, I suspect most respondents would not prefer it to the present system.  One of the most important facts in this debate is that most people would keep things going as they are - if they could.  They would want Medicare to continue to pay at the projected (pre-Obamacare cuts) level and for the resulting burden to not crush the economy. Well that isn't going to happen.  There are going to be limits placed on Medicare spending.  The only question is whether those limits will be more of the kind centralized, sudden, and dumb cuts we saw in Obamacare, or whether we will have more market-oriented reforms that increase the productivity of the health care sector and let the elderly pay for the services they want rather than the services some bureaucrat wants them to have.  A few pieces of advice from an amateur for Paul Ryan:

1. Defined contribution is a terrible way to describe the conservative version of Medicare.  So is is voucherizing and privatizing.  It should be called patient-centered Medicare for future retirees.  It should be conservative patient-centered health care reform that allows the (future) elderly to purchase the services they want vs. bureaucrat-centered Medicare cuts where some agency just says no.  It should be innovation, choice and better health care vs. death panels.

2.  Medicare reform is a comparative issue.  We are really facing tough choices and those who say otherwise are liars who want to cut your health care.  There are two major ways of bringing down Medicare spending to a sustainable level. The Democrats will cut your benefits and leave you with no other options.  We see that in Obamacare's plan to reduce provider reimbursements.  The Obamacare plan is to pay your doctor less, thereby making it harder to get medical care.  Multiply this approach across all your medical needs.  And the Democrats are doing this to current retirees.  Sometimes the government will just tell you no.  More often the government will find sneakier ways to deny you care (creating waiting periods or paying at artificially low rates so that a service becomes unavailable.)  They will nickel and dime you to death.  This is the future under the Democrats and they have already started building it.  Republicans need to explain that patient-centered Medicare will force providers to reorganize to provide better care for the elderly at a lower price, and that this is much better than the Democrat plan to give you less care when and how the government says so.

3.  Ryan is articulate, energetic and smart, but he can't be everywhere at once.  I assume most Republican members of Congress will be hopeless at explaining this issue past a couple of talking points.  Some Republican members of Congress are quite old and have lost something off their fastball.  Some are hacks who are just there to be there and aren't about to take on a complicated and controversial issue with enormous political downside risk.  They will run for cover after the first AARP blast email. Some have real limited government principles but have demonstrated little ability (and perhaps little interest) in communicating to people who haven't already bought into the conservative narrative.  Some congressional Republicans fit into more than one of the above categories. 

Ryan needs to get together about twenty congressional Republicans to be the voices of the GOP on this issue (and one of them should be Marco Rubio.)  They need to know the facts and the arguments inside and out, and have their responses honed to the second.  Then they need to go everywhere and explain, explain, explain.  Congress won't pass patient-centered Medicare this year or next.  This is a public education effort and those most principled and articulate of Republicans need to be ready.  They won't get another chance to make a first impression with the public.        

 

Categories > Politics

Discussions - 41 Comments

Over at PowerLine, Steven Hayward makes a powerful point:

"If you think public employee unions are reckless and out of control, just wait till the AARP takes to the streets against entitlement reform."

The only way to deal with the embedded harpoon of entitlement is to undercut and delegitimise those with their snouts deepest in the trough.

AARP ceased representing the elderly long ago. To increase their base, they've slid membership back to age 50, in a Euro-type indulgence.

Worse, AARP is now just an insurance broker masquerading as an advocate. Make their revenue sources public to destroy their credibility. Commissions on product sponsorship vastly exceeds membership dues.

Tell me how a man gets paid and I'll tell you how he votes.

Pete's right, of course, that this is going to be a huge fight, but I think there is a large and growing number of people who understand that the deficit is out of control and that entitlement reform is a necessary step to fixing the problem. However, Republican plans are always vulnerable to the charge that the poor and middle classes are the ones who will have to endure the most pain. Pete is also right in pointing out that they will be hurt in any case, and that words matter, but class warfare remains the easiest and most effective weapons on the Democrats' arsenal.

I therefore have a suggestion for the Republicans: as part of any overall reform package, include a provision rolling back the Bush tax cuts on the wealthy, provided that the additional revenues can be directed toward paying down the deficit. Don't wait for the Democrats to propose it, because then they will get the credit. This would, I think, be a small price to pay for real entitlement reform, and would likely attract enough Democrats to push it through Congress.

Won't work....tax revs will decline as added taxes on wealthy are circumvented legally....plus dems won't support 'cause they lose favorite anti repubs talking point and ability to demagogue.

The Republicans are up against two fearsome adversaries here: media bias, and the insidiousness of socialism.
1. Media bias is a gale force opponent, and should not be underestimated. Obamacare slashed in the neighborhood of $500 billion from Medicare. Where was the outcry? Did the media caterwaul about throwing grandma out in the snow? Of course not. But these cuts are (or will become) real. Yet by underplaying/not focusing attention on them, the AARP and the media kept the dogs from howling. Rest assured that this will not happen when Ryan's budget is unveiled. Instead, the coordinated demonization will begin in earnest. Every 1995 geezer-killing charge will be recycled and repeated to death...Obamacare-related hypocrisy be damned. And the question "didn't you just cut $500B from Medicare?" won't even be raised outside of Fox and Rush.
2. The secret to socialism's entrenchment lies in its insidiousness. Once you get somebody hooked on benefits (i.e., somebody else's money), it is extremely difficult to take them away. The problem with buying votes is that it works. This is thanks to human nature. And not only won't human nature ever change, it is an extremely tough force to overcome.
Between 1 and 2, I give the Republicans about a 30% chance of success. Unless our few smart, charismatic spokesmen (Ryan and Rubio are a terrific start) can maintain their bearings, tell it like it is, and keep from being steamrolled.

John, we are going to have to raise revenue along with spending cuts, but I would personally prefer an approach that concentrates as much as possible on reducing tax deductions rather than raising marginal tax rates. Going back to the Clinton top marginal income tax rates, especially if partially offset by eliminating the Obamacare Medicare surcharge (and therefore really returning to those rates) wouldn't be the worst thing in the world, but I think that it might make sense to have that be a fallback negotiating position. One thing Republicans ought to stress is that their approach to reforming entitlements is, in many ways, already progressive. Ryan's various approaches to reforming Medicare (whether his Roadmap or Ryan-Rivilin) cut the amount that the federal government will spend on future wealthy and healthy retirees (when they are healthy.) A Social Security reform (there seemingly won't be one in the forthcoming Ryan budget) that reduces benefits for future high earners is similarly progressive. There is a lot to be said for a government that (other things being equal) taxes high earners less during their working years, but also gives them less when they don't need the money later on. It also helps produce more economic growth for everyone else.

ptsargent, there is a point where top marginal rates become so high that they bring in less revenue than would some lower rate. I don't see that an effective federal marginal tax rate of 42.8% (a 39.9% marginal income tax rate + 2.9% Medicare tax - I excluded the Obamacare surcharge) is that point and I'm not sure that many economists see that as being the point either.

Pete, I'm curious about whether you and other residents of Massachusetts are covered by the commonwealth's near universal coverage provisions after age 65, or whether turning 65 turns you over exclusively to Medicare and removes you from the state rolls?

Rationing by Never Event
Surgeon:  The risks of elective surgery for this patient are just too large.
Hospitalist:  Really? He doesn't seem that bad.
Surgeon:  I mean the risks to me.

A "never event" is a medical complication that should never happen, such as leaving a sponge behind in surgery. But, the government has already specified in-hospital falls, skin ulcers, and surgical site infections (among others) as never events, although these are not entirely preventable. What is the government doing?

•  Specify never events that cannot be entirely avoided in elderly, sick, fat, and malnourished patients.
•  State that never events should never happen.
•  Refuse to pay doctors and hospitals for treating never events under Medicare.
•  Insurance companies will also refuse, following Medicare guidelines.
Lawyers will sue and win when never events occur.
•  This applies pressure on doctors to avoid treating risky patients, where possible. "Conservative" treatment will become preferred.
•  Medicare/Medicaid spending will fall as elderly, sick, fat, and malnourished patients receive "less risky" care.
•  Medical rationing is achieved without using the word "rationing".

George, I'm not sure I understand your question, but I'll try to answer anyway. Romneycare created a highly regulated "private" insurance market that includes community rating, guaranteed issue, significant coverage mandates, a sliding scale subsidy for some, and an individual health insurance purchase mandate. We have Medicaid like every other state - we call it MassHealth. The Romneycare system has produced problems like spiking insurance premiums and declining competition among "private" insurers.

http://www.necn.com/03/31/11/Patrick-on-insurers-Sick-of-their-excuse/landing_business.html?blockID=494842&feedID=4209

Massachusetts politicians are of course busy blaming the insurers (who are benefiting from captive market) for premium increases that are caused by the incentives in the politician-created system. You can expect similar stories if and when Obamacare is fully implemented along with building public pressure for a single-payer health care system to fix the problems caused by Obamacare.

Medicare works the same here as elsewhere.

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Pete's very sobering post below on the difficulties of the coming war over entitlement spending prompts a thought on the comparatively minor skirmish over public employee compensation and union power.  If Republicans actually succeed in curtailing... Read More