“Privatization Of Medicare”: Jeb Bush Now Says He Wouldn’t ‘Phase Out’ Medicare. What He Would Do Is Just As Wrong
It had to happen sooner or later: a Republican presidential candidate says something suggesting he’d destroy Medicare, the Democrats jump all over him, and he backtracks, saying that’s not what he meant and in fact he only wants to strengthen it. This time it’s Jeb Bush, who said the other day that though we can keep Medicare around for the people who are currently on it, “we need to figure out a way to phase out this program for others and move to a new system that allows them to have something – because they’re not going to have anything.”
This is an old argument from Republicans, one they also use to justify attacks on Social Security: the program is doomed anyway, so we should go ahead and privatize it. The argument is completely wrong with regard to Social Security, and the truth about Medicare is that the program’s future is looking brighter and brighter — in no small part because of the Affordable Care Act. The argument Bush is making is ten years out of date.
Bush did try to walk back his statement a bit, saying the “phase out” part was taken out of context and he’s only talking about how we “reform our entitlement system.” Here’s his follow-up, which doesn’t change the essence of what he was arguing:
“It’s an actuarially unsound health care system,” said Bush, who said something must be done before the system burdens future generations with $50 billion of debt. “Social Security is an underfunded retirement system; people have put money into it, for sure.
“The people that are receiving these benefits, I don’t think that we should touch that; but your children and grandchildren are not going to get the benefit of this that they believe they’re going to get, or that you think they’re going to get, because the amount of money put in compared to the amount of money the system costs is wrong.”
Bush hasn’t yet released his plan to phase out/reform Medicare, but given these comments it seems likely he’ll embrace something like what Paul Ryan has been advocating for years. It involves changing Medicare from a guaranteed single-payer government insurance plan into a voucher plan, in which the government gives senior citizens a set amount of money with which they can go out and get private health insurance. It saves money by limiting the value of that voucher, so if it’s less than what coverage actually costs, well, tough luck. In that way, it eliminates the central promise of Medicare, which is that every American senior citizen will have health coverage.
We’ll await Jeb’s particulars, but I promise you that most of the GOP candidates will embrace some version of this plan, because that’s what the Republican consensus on Medicare is these days. And it’s always justified with the argument Jeb gives: because of skyrocketing costs the program is doomed, so privatization is the only way to make sure it’s there for your kids. But don’t worry, current seniors, we won’t touch your Medicare! Which is one of the ironies of their argument: the free market is supposed to make everything wonderful, but they fall all over themselves to promise senior citizens that they won’t disturb the big-government, socialist program that seniors love.
Now on to the cost question. As it happens, the Medicare Trustees just released their annual report on the future of the program. And as Kevin Drum noted, things are looking a lot sunnier than they were a few years ago:
Ten years ago, Medicare was a runaway freight train. Spending was projected to increase indefinitely, rising to 13 percent of GDP by 2080. This year, spending is projected to slow down around 2040, and reaches only 6 percent of GDP by 2090. Six percent! That’s half what we thought a mere decade ago. If that isn’t spectacular, I don’t know what is.
Those are projections for what’s going to happen decades from now, so things are doubtless going to change. But the presumption of the Republican argument is that Medicare is eventually going to eat the entire federal budget, and so we have no choice but to fundamentally alter it. And that’s just not true.
The other assumption they make is that the way to alter Medicare is simple: privatize it. But they’re wrong about this, too. Medicare is expensive, but that’s not because it’s an inefficient big-government program. In fact, Medicare is remarkably efficient, more so than private insurance. That’s because it benefits from economies of scale, and because it doesn’t have to spend money on things like marketing, underwriting, and big salaries for executives. The reason Medicare is expensive is that American health care is expensive, and it serves a lot of people. The retirement of the large Baby Boom generation is what’s producing its current funding challenges.
Let’s not forget that at the same time Republicans cry that Medicare is unaffordable and so must be dismantled, they fight any effort to actually lower costs in a rational way. For instance, they’re adamantly opposed to comparative effectiveness research, which involves looking at competing treatments and seeing which ones actually work better. That this isn’t something Medicare already takes into account sounds ridiculous, but it’s true. If there are two medications for a particular ailment that are equally effective, but one costs $100 a year and one costs $100,000 a year, wouldn’t it make sense for Medicare to 1) find that out, and 2) make coverage decisions accordingly? But Republicans have said no — Medicare should just pay for both, no matter what it costs.
Republicans also oppose the most significant effort to reduce Medicare costs in decades, something called the Affordable Care Act, which included all kinds of provisions meant to achieve this goal. Perhaps most critically, the law starts a move away from the fee-for-service model, in which doctors and hospitals make more money the more procedures they do, to a model where they get paid a single rate for treating a patient. Under the fee-for-service model, if your hospital screws up, you get an infection, and you have to get re-admitted, they make more money; the ACA actually punishes them for that, giving them a greater incentive to provide better and less expensive care.
But Republicans not only want to repeal the ACA, which means repealing all those kinds of payment provisions, they have nothing much to say about how, specifically, we might save money in Medicare. Their only answer is that if we privatize it, the magic of the market will produce savings. Of course, if that were true America would have the cheapest health care system in the advanced world, since ours is already more private than in any other similar country. And yet we don’t — ours is far and away the most expensive, and that’s precisely because the market has failed.
So to sum up, this is the Republican argument on Medicare: We absolutely can’t do anything in particular that would bring down the cost of Medicare, but the cost of Medicare is so outrageous that we have no choice but to privatize it.
When Jeb Bush and the other candidates talk about this subject, pay close attention to what they say. They’ll use the word “strengthen” a lot — we want to strengthen Medicare! They’ll tell seniors, who vote in great numbers, that they aren’t going to touch their precious Medicare. And they’ll ignore what we’ve learned in the last few years, talking as though things look just as bad as they did before the Affordable Care Act was passed and health care spending slowed. But the truth is that their solution is no solution at all.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, July 24, 2015
“No Longer Any Political Margin To Be Gained”: Why Republicans Won’t Object To The Return Of ‘Death Panels’
There was a lot about the period leading up to the passage of the Affordable Care Act that was ridiculous and maddening, but perhaps no episode was worse than the controversy over “death panels.” Here you had a small provision of the bill that doctors, patient advocates, and health care experts all agreed would lead to better care, not to mention cost savings. Then Republicans concocted a lie about it, spread that lie as far as they could, and finally saw the provision removed from the final legislation.
Well, now Medicare is finally doing what that provision of the ACA would have done.
Under a newly proposed rule, it will reimburse doctors for the time they spend with patients planning how they want to be cared for near the end of their lives. And just you watch: this provision that Republicans said six years ago was so horrifying? They’re not even going to bother opposing it anymore, now that doing so serves no political purpose. It’s barely going to be a controversy at all.
That’s not what everyone else seems to be predicting. All over the web there are articles about this issue, many illustrated with photos of Sarah Palin, predicting that this is going to blow up into another angry debate. But I say it won’t. Here’s why: Republicans’ opposition to end-of-life counseling was always utterly cynical, a performance enacted for no purpose other than undermining the legislation. At this point, with the law implemented long ago and the major legal challenges over, there’s no longer any political margin to be gained in shaking their fists at patients and doctors talking about the options for end-of-life care.
Let’s review a little history. This whole thing got started when conservative activist Betsy McCaughey appeared on the radio in 2009, when versions of the legislation were working their way through Congress, and said this about the one in the House:
“And one of the most shocking things I found in this bill, and there were many, is on Page 425, where the Congress would make it mandatory — absolutely require — that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go in to hospice care. And by the way, the bill expressly says that if you get sick somewhere in that five-year period — if you get a cancer diagnosis, for example — you have to go through that session again.”
To paraphrase what Mary McCarthy said about Lillian Hellman, every word of that statement is a lie, including “and” and “the.” The actual provision stated that if a patient wanted to have a consultation about their options, including how to create an advanced directive that would lay out what sorts of treatment they wanted and didn’t want if they got to a point where they couldn’t communicate it themselves, Medicare would pay the doctor for the time counseling the patient. Nothing was mandatory, nothing would require doctors to “tell them how to end their life sooner,” and nothing required anyone to have the session again. It was all lies.
But that didn’t prevent the claim from taking off like a rocket. Sarah Palin floated the “death panel” talking point. Chuck Grassley told a crowd back home, “We should not have a government program that determines if you’re going to pull the plug on grandma.” Although media outlets tried to explain that the allegation was false, millions of people believed it anyway. Chastened Democrats removed the provision from the bill.
So now that Medicare is finally moving ahead with this provision, are Republicans really going to fight it? No, they won’t. I’ve been looking around for condemnations from conservative media outlets or prominent Republican politicians, and so far I’ve come up empty. There was one small item on the National Review’s blog, with no substantive objection, just a little harumphing about bureaucracy. No outraged statements from Mitch McConnell and John Boehner, no thunderous denunciations from the presidential candidates, nothing.
Maybe they just haven’t gotten around to it yet, and the indignation is on its way. But I wouldn’t bet on it. In this somewhat cooler environment, it isn’t going to be easy for them to argue that patients shouldn’t sit down with their doctors and plan for their future care. And with congressional Republicans all but giving up on repealing the ACA, this isn’t a battle that offers much to be gained.
So five years after the ACA was passed, doctors will know that they can get paid for this absolutely vital service, explaining the options to their patients and making sure that when the time comes, those patients’ wishes are honored. The people like McCaughey, Palin, and Grassley who back then lied to the country in order to score a few points against Barack Obama ought to hang their heads in shame. But at least it’s finally happening. Better late than never.
By: Paul Waldman, Senior Writer, The American Prospect; The Plum Line Blog, The Washington Post, July 9, 2015
“Where Government Excels”: Recognizing The Reality That There Are Some Things The Government Does Better Than The Private Sector
As Republican presidential hopefuls trot out their policy agendas — which always involve cutting taxes on the rich while slashing benefits for the poor and middle class — some real new thinking is happening on the other side of the aisle. Suddenly, it seems, many Democrats have decided to break with Beltway orthodoxy, which always calls for cuts in “entitlements.” Instead, they’re proposing that Social Security benefits actually be expanded.
This is a welcome development in two ways. First, the specific case for expanding Social Security is quite good. Second, and more fundamentally, Democrats finally seem to be standing up to antigovernment propaganda and recognizing the reality that there are some things the government does better than the private sector.
Like all advanced nations, America mainly relies on private markets and private initiatives to provide its citizens with the things they want and need, and hardly anyone in our political discourse would propose changing that. The days when it sounded like a good idea to have the government directly run large parts of the economy are long past.
Yet we also know that some things more or less must be done by government. Every economics textbooks talks about “public goods” like national defense and air traffic control that can’t be made available to anyone without being made available to everyone, and which profit-seeking firms, therefore, have no incentive to provide. But are public goods the only area where the government outperforms the private sector? By no means.
One classic example of government doing it better is health insurance. Yes, conservatives constantly agitate for more privatization — in particular, they want to convert Medicare into nothing more than vouchers for the purchase of private insurance — but all the evidence says this would move us in precisely the wrong direction. Medicare and Medicaid are substantially cheaper and more efficient than private insurance; they even involve less bureaucracy. Internationally, the American health system is unique in the extent to which it relies on the private sector, and it’s also unique in its incredible inefficiency and high costs.
And there’s another major example of government superiority: providing retirement security.
Maybe we wouldn’t need Social Security if ordinary people really were the perfectly rational, farsighted agents economists like to assume in their models (and right-wingers like to assume in their propaganda). In an idealized world, 25-year-old workers would base their decisions about how much to save on a realistic assessment of what they will need to live comfortably when they’re in their 70s. They’d also be smart and sophisticated in how they invested those savings, carefully seeking the best trade-offs between risk and return.
In the real world, however, many and arguably most working Americans are saving much too little for their retirement. They’re also investing these savings badly. For example, a recent White House report found that Americans are losing billions each year thanks to investment advisers trying to maximize their own fees rather than their clients’ welfare.
You might be tempted to say that if workers save too little and invest badly, it’s their own fault. But people have jobs and children, and they must cope with all the crises of life. It’s unfair to expect them to be expert investors, too. In any case, the economy is supposed to work for real people leading real lives; it shouldn’t be an obstacle course only a few can navigate.
And in the real world of retirement, Social Security is a shining example of a system that works. It’s simple and clean, with low operating costs and minimal bureaucracy. It provides older Americans who worked hard all their lives with a chance of living decently in retirement, without requiring that they show an inhuman ability to think decades ahead and be investment whizzes as well. The only problem is that the decline of private pensions, and their replacement with inadequate 401(k)-type plans, has left a gap that Social Security isn’t currently big enough to fill. So why not make it bigger?
Needless to say, suggestions along these lines are already provoking near-hysterical reactions, not just from the right, but from self-proclaimed centrists. As I wrote some years ago, calling for cuts to Social Security has long been seen inside the Beltway as a “badge of seriousness, a way of showing how statesmanlike and tough-minded you are.” And it’s only a decade since former President George W. Bush tried to privatize the program, with a lot of centrist support.
But true seriousness means looking at what works and what doesn’t. Privatized retirement schemes work very badly; Social Security works very well. And we should build on that success.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 10, 2015
“Jeb Bush Pushes To ‘Phase Out’ Medicare”: Slow Learner’s? Ignorance? There’s Just ‘Something’ About Republican Politicians
Republican presidential hopeful Jeb Bush appeared at a New Hampshire event last night sponsored by the Koch brothers’ Americans for Prosperity, and the former governor raised a few eyebrows with his comments on the future of Medicare.
“The left needs to join the conversation, but they haven’t. I mean, when [Rep. Paul Ryan] came up with, one of his proposals as it relates to Medicare, the first thing I saw was a TV ad of a guy that looked just like Paul Ryan … that was pushing an elderly person off the cliff in a wheelchair. That’s their response.
“And I think we need to be vigilant about this and persuade people that our, when your volunteers go door to door, and they talk to people, people understand this. They know, and I think a lot of people recognize that we need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits. But that we need to figure out a way to phase out this program for others and move to a new system that allows them to have something – because they’re not going to have anything.”
Remember, Jeb Bush is the ostensible moderate candidate in the massive GOP presidential field. It says something important about Republican politics in 2015 when the most mainstream candidate is also the candidate who wants to scrap Medicare altogether.
Regardless, there’s quite a bit wrong with his take on the issue, both as a matter of politics and policy. Let’s start with the former.
The Florida Republican is convinced that “people understand” the need to get rid of Medicare. He’s mistaken. Given the polling from the last several years, what people understand is that Medicare is a popular and successful program, and a pillar of modern American life.
Previous attempts to “phase out” the program have met with widespread public scorn and if Jeb Bush believes he can “persuade people” to get rid of Medicare, he’s likely to be disappointed.
As for the policy, there’s no point in denying that the Medicare system faces long-term fiscal challenges, but to argue, as Jeb Bush does, that Democrats have ignored the conversation is plainly incorrect. On the contrary, while Republicans fight to eliminate the Medicare program, Democrats have had great success in strengthening Medicare finances and extending its fiscal health for many years to come.
The secret, apparently, was passing the Affordable Care Act.
Before “Obamacare” was passed, Medicare was projected to face a serious fiscal shortfall in 2017. As of yesterday, Medicare trustees now believe the system is fiscally secure through 2030.
Kevin Drum noted the slowdown in costs, which is “spectacularly good news.”
Ten years ago, Medicare was a runaway freight train. Spending was projected to increase indefinitely, rising to 13 percent of GDP by 2080. This year, spending is projected to slow down around 2040, and reaches only 6 percent of GDP by 2090.
Six percent! That’s half what we thought a mere decade ago. If that isn’t spectacular, I don’t know what is.
Obviously, all of these projections come with caveats because no one can say with certainty what will happen in the future, but the projections are encouraging – and far more heartening than they were before the ACA passed.
But Jeb Bush is under the impression that Medicare is, without a doubt, doomed, so we might as well get rid of the program now and see what Paul Ryan has in store for seniors in his far-right bag of tricks.
There’s a better way. Medicare’s future is looking brighter, it’s as popular as ever, and its fiscal challenges can be addressed without tearing down the entire system. It’s a matter of political will – either elected policymakers will fight to protect Medicare or they’ll push to eliminate it.
By: Steve Benen, The Maddow Blog, July 21, 2015
“The Obamacare Plaintiffs And Medicare”: Maybe They’d Love Obamacare If The Hated President’s Name Wasn’t On It
Politico‘s Jennifer Haberkorn scored a bit of a scoop by convincing the chief plantiff in the King v. Burwell litigation, David King, to let her into his Fredericksburg, VA living room, apparently because he didn’t want to leave her shivering on his front doorstep. Most of what she tells about him, though, seems to come from his recent social media expressions rather than from anything he said to her in person:
The man who could cripple Obamacare isn’t shy about telling the world that he thinks the president is an “idiot,” posting altered images of the first lady in Middle Eastern clothing and expressing his hatred for the “Democraps” who enacted the health care law.
Greg Sargent, however, finds something more interesting to examine about King and a couple of his co-plaintiffs:
[I]t’s fascinating that King is less than a year away from qualifying for Medicare. As it happens, Politico reports that two of the other four challengers are 64 and 63, also putting them very close to qualifying. Remember, this lawsuit is all about the plaintiff’s objection to being subjected to the individual mandate’s requirement that they get insurance. The plaintiffs are claiming injury because Virginia is on the federal exchange, which, they say, means they should not be getting the subsidies which are necessary under the law to require them to get insurance under the mandate. Yet three of the challengers are very close to having the mandate canceled for them by Medicare. (One, it should be noted, is 56 years old.)
It would be really interesting to know what these challengers think of Medicare, given their role in a lawsuit that could go a long way towards gutting the coverage guarantee for millions of Americans.
Unfortunately, we cannot answer Greg’s question yet, if ever. Maybe these folk share the not uncommon belief of seniors that Medicare is an “earned benefit” (at most half-true) in contrast to the “welfare” nature of Obamacare (again, at most half-true). Maybe they don’t like Medicare as it is but would like to “reform” it–though the most common Republican proposal for “reform” is to convert Medicare from being a defined government-provided benefit to a means-tested system of public subsidies for private insurance purchases like Obamacare. Maybe they’d love Obamacare if the hated president’s name wasn’t on it. It’s hard to say. But whatever their reasons, they’re willing to force millions of people who aren’t on the brink of qualifying for Medicare into a health care wilderness. No wonder they don’t want to give interviews.
By: Ed Kilgore, Contributing Writer, Political Animal, The Washington Monthly, February 6, 2015
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