There followed three decades of progressive proposals, each shot down by lawmakers animated by fierce public dissent. The Left realized the dream of socializing the health-care sector was not attainable in one fell swoop, so an incremental strategy was adopted: Get a foot in the door with less ambitious proposals; establish the precedent of government control while avoiding debate over the principle of government control. “Incremental change,” said Medicare scholar Martha Derthick, “has less potential for generating conflict than change that involves innovation in principle.”
She was talking about disability coverage, which was added to Social Security in 1956. The one-way government ratchet implanted by Social Security two decades earlier had made such narrowly tailored additions inevitable. As an insightful incrementalist, Ms. Derthwick realized that disability coverage was, as she put it, a “necessary prelude” to the enactment of Medicare. She would have understood, better than Representative Ryan I’d wager, how even an anti-debt crusader who now wants to reform Medicare could be seduced into voting for the Bush prescription-drug entitlement — the so-called Medicare Part D that was added by Representative Ryan and the Republican-controlled Congress just a few years ago, even though it was already well known that Medicare Parts A through C were driving the country to insolvency.
Everything about Medicare was fraudulent, beginning with the name “Medicare.” As Professor Twight notes, it was appropriated from “a term coined by a reporter to describe a previously established comprehensive health care program” that had won support because it was tailored to military dependents. Although Medicare’s architects were knowingly laying the groundwork for fully socialized medicine, they narrowly proposed to underwrite only care for the elderly — who, after all, were already benefiting from Social Security. Proponents pretended to be removing the aged from “dependency” when they were merely shifting the burden of dependency from its traditional obligors (personal responsibility, the family, and private charity) onto taxpayers. They claimed to be relieving the young of responsibility for their aging parents when they were actually burdening the young — and the young of future generations — with an ever-increasing tab for an ever-ballooning population of elderly dependents.
Of course, if Medicare had been on the up and up, proponents could have sculpted a welfare plan for the 15 percent of seniors who arguably needed assistance. But that would have disserved the goal of fully socialized medicine. So proponents instead followed their successful (and equally unsustainable) Social Security model and gave us what David Hyman has tartly called a “reverse Robin Hood” scheme that “robs from the poor and the working class and gives to the middle class and the rich.” They pulled it off by caricaturing the elderly as uniformly destitute, even though, factoring in assets rather than just income, the elderly as a class were (and are) better off than many of those paying the freight.
More shrewdly, proponents misrepresented Medicare as an “insurance” program, with a “trust fund” into which working people paid “contributions” and beneficiaries paid “premiums” that would “entitle” them to claim “benefits.” In reality, there is no “trust fund.” Workers pay taxes — at levels that can no longer satisfy the pay-outs for current beneficiaries. This state of affairs was entirely predictable when Medicare was enacted in 1965 with the Baby Boom well underway. Back in the early days, when the program was flush, the surplus of taxes passed from the “trust fund” into the federal treasury, which redistributed the money to whatever chicanery Washington happened to be heaping money on. In return, the “trust fund” got an IOU, which would ultimately have to be satisfied by future taxes (or by borrowing from creditors who’d have to be repaid by taxpayers with interest). And the “premiums” largely turned out to be nonsense, too: The pols endeared themselves to elderly voters by arranging for Uncle Sam pick up more and more of the tab, or by using the government’s newfound market power to demand that providers accept lower payments.
When Medicare was enacted in 1965, the inevitability of its many adverse consequences was crystal clear. The system was grossly underfunded. The fee-for-service structure (expertly described by Capretta) was certain to increase costs exorbitantly with no commensurate increase in quality of care (indeed, care is mediocre, or worse). But most palpably, the fact that government was at the wheel made Medicare instantly ripe for political gaming and demagoguery. The ensuing 46 years have not only made the obvious explicit; Medicare and its tens of trillions in unfunded liabilities are actually worse than even its most fearful early critics predicted it would be.