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The Short-Term Thinking on Medicare That Can Cause Long-Term Problems

May 07, 2015
1:06 pm

It was very encouraging, to say the least, when Republicans and Democrats in Congress worked together this spring to pass legislation bringing much-needed reform to the Medicare physician payment system.  It gives hope that bipartisanship can continue to reign long enough for Washington to take on an even bigger challenge – strengthening Medicare’s long-term financial solvency.

As Jim Pethokoukis wrote this week on the American Enterprise Institute’s blog, this effort won’t be helped if those running for president in 2016 distort the issue of Medicare sustainability with their rhetoric.  One recently-announced candidate on the Republican side is, in fact, making opposition to Medicare reform a centerpiece of his messaging, saying “Washington has done enough lying and stealing.  I’ll never rob seniors of what our government promised them and even forced them to pay for.”

That kind of statement – and it’s a sentiment heard all too often on both sides of the aisle – either ignores or obscures certain unavoidable facts:

•    In blustering that you won’t “rob seniors” by improving Medicare, you’re essentially planning to rob younger generations, by forcing them to help finance a program that will be in far worse financial shape when it’s their turn to utilize its benefits.

•    You can’t pretend demographic realities don’t exist.  Today, that average senior who paid $500,000 in payroll taxes for Medicare and Social Security over his or her working life is receiving more than double that in benefits.  At the same time, the ratio of working Americans to retirees is rapidly shrinking.

•    Some of the more innovative and promising Medicare reform proposals have nothing to do with ‘robbing’ seniors, but rather providing them a choice of conventional fee-for-service Medicare or letting them enter a program similar to the popular Medicare Part D prescription drug program, in which private plans compete on the basis of cost, quality and value.  The Congressional Budget Office has said, in fact, that this approach would reduce costs for both beneficiaries and taxpayers.

Congress has already made great strides this year in improving the way Medicare operates.  The next step is to put in place the structural improvements to keep the program healthy for generations to come.   I’m under no illusion that will happen in the upcoming 2016 campaign cycle.  It would be nice, though, if we could at least have a productive, honest conversation on the subject.

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