The Dual Hypothesis on Medicare

There are some simple truths that Paul Ryan and the Republicans need to understand about the politics of government run health care.  The first and most basic being that people – on both sides of the aisle – love their medicare.  70% of tea partiers love their medicare and oppose cuts to the program.  If that is the ideological base of your party it should be pretty clear that messing with people’s medicare isn’t going to be a winner politically.

On the other side, perhaps a more realistic side even, politicians in both parties know that medicare is unsustainable.  Paul Ryan is right that we can’t support the entitlement system as it stands in this country going forward.  There are going to have to be key concessions from all parties involved to make the system solvent moving forward.  This idea that by showing “leadership” on this issue Republicans are somehow going to be rewarded for making a politically stupid mistake is kind of ridiculous.  That’s like saying that because the quarterback had the courage to throw the ball on the final play of a game that it’s okay that the pass was intercepted.  Ask Brett Favre how that’s worked for him.

If you listen to Paul Ryan’s talking points on medicare he actually does a pretty good job selling the thing.  One area that he does a particularly good job in is rebranding the fundamental dismantling of the medicare system.  Rather than using words most people don’t understand like “vouchers,” which sounds a little too much like “coupons” Ryan uses the term “premium support.”  That’s smart because people like to be supported.  The downside is that it’s fundamentally not true.  What Ryan’s plan calls for is essentially a state based medicare system that uses the same cost cutting mechanisms as the Affordable Care Act, but uses them in a manner that is grossly ineffective.

For instance, during the 2009 health care fight Republicans touted a plan that would allow people to save costs by letting people purchase health insurance across state lines.  The idea here is that some states have awesome health care systems and we ought to let everyone participate in programs that have low costs, but high benefits.  That sounds great, but the reality is that if you push a whole bunch of people into a system that’s worked well for a few the system itself will become bloated with operating costs because of the new influx of customers.

The rhetoric behind this is the same used in the debate over charter schools.  Republicans are fond of saying that charter schools are fundamentally better schools than public schools.  But, it’s not true.  Charter schools are different than public schools in that the majority of their students are part of a demographic that does well in school anyway.  Taking those students out of a public school and putting them in a charter school just makes the charter school look good because it picks students that are more likely to succeed.  The sad reality in the charter school program is that whole families will put all of their faith in the school and then be completely shocked when their child doesn’t automatically become a straight-A student.  It’s true that putting children in a better environment to learn increases the chances that they themselves will learn more, but it doesn’t mean that they’re going to all of a sudden have higher test scores.

I understand why Paul Ryan believes his plan is being thrown under the bus however.  The problem is communication and not ideology however.  If Republicans really want to get rid of certain entitlements they should just say so.  By going out and saying “medicare and social security are the two most important government programs that we have” and then saying that “we cannot continue to support these programs as they’re currently constructed” you’re essentially talking out of both sides of your mouth.  You can’t expect to sell something by saying we need to phase out certain aspects of a program people like.  An assault on part of the system is, essentially an assault on the entire system because the system works as it’s currently constructed and people like the way it works.  What people don’t like are the costs that are involved with Medicaid and Medicare.  More specifically, people don’t like the fact that we’re going to have to pay more in taxes to support a system that everyone does not see a net benefit from.

That’s a perfectly acceptable and understandable argument, but if we only paid for the things we liked and refused to pay for things we didn’t like, government wouldn’t function very well.  You could argue that by educating the public about where their tax dollars go people will be better informed to make decisions about how to spend their money, but most people have a tough time taking a philosophical argument and applying it to their daily lives.  People don’t understand the idea behind premium support and don’t want to understand it because people generally don’t like change.

The real sticking point for Republicans is that after introducing the notion of “death panels,” “rationed care,” and a government funded “abortions for everybody” it’s tough to dial back the rhetoric when you’re the ones who ratcheted it up in the first place.  Republicans scared people in 2010 by saying Democrats want to take their Medicare away and now in 2011, Republicans are surprised when they’re losing on that very same issue.  What Republicans fundamentally don’t understand is that it’s much easier to give people rights than to take them away.  That’s why Democrats wholeheartedly embraced the Affordable Care Act because although it mandates coverage, in the long run, it cuts costs and if we’re going to make Medicare solvent we’re going to have to cut costs.  Democrats and Republicans just disagree on how to do that.

Republicans believe that people should have to manage their finances and not count on the government to manage their finances for them and that’s a perfectly legitimate argument, just don’t be surprised when people look at that argument and disagree with the premise.  The reason that the Affordable Care Act will be a winner for Democrats going forward is because by mandating care for everybody you fundamentally lower the costs of delivering medical care.  The theory is that by bringing more people into the system, prices will go down.  The theory behind the Republican position on health care is that our health care is awesome and only needs some minor tweaks to make it sustainable.  But, by their own measurement, this theory is wholly untrue.

So how do Republicans want to reform the system if they’re against an individual mandate to purchase health insurance?  If you don’t want to lower costs then the only other solution available to you is to cost-shift and that’s what Republicans are trying to do by block-granting Medicaid and instituting a “premium support” system for Medicare.  What their plan does is give you money so you can purchase health insurance yourself at the state level.  The problem is that unlike Medicare and Medicaid, they don’t pick up the whole tab, they ask the consumer to pay more in out of pocket expenses.

So when Democrats say that Republicans want to take away your Medicare they are somewhat correct in that they want to take away the Medicare delivery system, which is run by the government and pass the costs off to you.  This allows the government to say “hey, we’ve slowed the growth of Medicare.”  Which is true, you have slowed the growth of Medicare, but you’ve also lowered the level of care people will receive and increased the real costs of health care.  My problem with the Republican health care plan isn’t that it tackles entitlements, it’s the way in which they tackle entitlements.

Everyone agrees that these systems need to be reformed, but Democrats believe that the systems should remain structurally intact whereas Republicans believe that we should slowly phase out benefits of the program by making people responsible for purchasing their own health care with help from the government.  The problem with this idea is that it doesn’t attack the fundamental problem with health care in our country, which is that we pay too much for too little care.  If you want to attack that problem the only way you can proceed is to increase the amount of people in the marketplace so that prices begin to grow at a slower pace.

Cost shifting doesn’t do this, in fact the only thing cost shifting does is take politicians off the hook for dealing with health care costs and delivery and the big take away from 2009 was that the most important thing that we can do to attack entitlement spending is to lower the costs of the underlying issue that’s causing costs to go up and that is the cost of delivering health care.

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