Sunday, August 23, 2009

Stoking the "Hands off My Medicare" movement -- a dangerous game for Republicans. 

How much do seniors pay towards their own Medicare benefits?

Andrew Biggs answers the question for the average 65-year-old retiring today, at the AEI blog ...
The typical 21-year-old as of 1965 would have paid around $62,290 in Medicare taxes ... while receiving around $140,346 in benefits.
That's 44%. So the average senior retiring today pays for less than half the Medicare benefits to be received. And the percentage is declining, because Medicare expenditures grow faster than the economy.
The Medicare Trustees project that health costs will grow around 1 percentage point faster than the growth of per capita GDP, which in turn they project will grow around 1.3 percent faster than inflation over the next 15 years. So I assume that real Medicare benefits will increase by 2.3 percent each year.
OK, it's obvious that this has big political implications both long-term and short-term, but let's consider them explicitly for a moment.

Right now to fight the Democrats' national health care plan, the Republicans are fueling a "Hands off My Medicare" movement organizing protests at political town meetings and elsewhere. It's certainly proving an effective ploy against the Democrats, hoisting them on their own petard, as the Democrats have so often used seniors rabidly defending their retiree benefits against Republicans in the past (see the 2005 protests against Social Security Reform).

It's also an honest ploy if looked at in the narrow focus of the immediate debate over Obamacare. The Democrats have plainly said they are going to cut medical costs. Obama has explicitly said, emphasized, they must cut the cost of Medicare to save the nation from future bankruptcy. But neither Obama nor the Congressional Democrats have any plan at all to actually measurably cut costs with efficiency improvements.

By arithmetic, that leaves the only option to be cutting benefits -- rationing to control costs, such as the Britain's National Health Service not paying for more than £30,000 of treatment per “quality adjusted” year of life. As one of Obama's top health care advisors, Ezekiel Emanuel (Rahm’s brother), has put it outright...
“Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality are merely 'lipstick' cost control, more for show and public relations than for true change”... [medical care should be reserved for the non-disabled, not given to those] “who are irreversibly prevented from being or becoming participating citizens ... An obvious example is not guaranteeing health services to patients with dementia” [NYP]
The Democrats have put themselves in a box. They've committed themselves to a "reform" that must logically result in cutting Medicare benefits, but are denying it will cut Medicare benefits. Seniors, not being entirely stupid about the processes of government, don't believe them. In the game of hardball politics it's entirely fair and honest for Republicans to point out the Democrats' problem and exploit it.

But it is also a dangerous game in the longer run, for both Republicans and the nation.

Because the fact of the matter is, those Medicare benefits that are already only 44% paid for by recipients, are growing by 2.3 percent a year and are indeed on course to bankrupt the nation if nothing is done about them.

Fundamentally, it is just plain wrong for any senior to think in terms of "hands off my Medicare benefits" when other people are paying the majority of their cost -- and rising. To encourage wrong belief among the masses for partisan short-term gain is itself wrong, and in this not just wrong in principle but likely to prove damn cosltly and painfully wrong, self-defeatingly wrong, in the long run.

Because in the end, to a greater or lesser degree, those Medicare benefits are going to have to be cut.

Moreover, if the Republicans at the end of the game want to attain their purported goals of low taxes, smaller government, and economic efficiency, those Medicare benefits are going to have to be cut to the greater degree.

And whipping up seniors to believe, "those Medicare benefits are yours, they are uncuttable, no matter how little you paid towards them", just does not square with that objective at all.