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Republicans Push Back on Medicare Reform



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Democrats have been having a field day demagoguing the Paul Ryan/House Republican plan to reform Medicare — claiming it will cause seniors to “die sooner,” comparing it to Hurricane Katrina and releasing a slew of scare-mongering ads (See: here and here), and so on. They appear determined to make Medicare the central issue in the 2012 election.

Republicans, for their part, have mounted a vigorous defense. The plan’s author, House Budget Committee chairman Paul Ryan (R., Wis.) has performed brilliantly (See: here, here, here and here). But ever since former House speaker Newt Gingrich’s appearance on Meet the Press on Sunday, where he called Ryan’s Medicare plan “radical” and an example of “right-wing social engineering,” the GOP has rallied around Ryan and his plan, launching a counter-attack against Democrats who simply refuse to acknowledge that the need for meaningful entitlement reform.

Republicans have a simple question: Where’s the Democratic plan for Medicare? Senate Budget Committee chairman Kent Conrad (D., N.D.) continues to “courageouslyresist his law-bound duty to introduce a budget resolution in the Senate, which has now gone more than 750 days without passing a budget. And President Obama continues to conflate specifying with actual policy making. But even when he talks policy, his plan is to double down on the new health care regime, which calls for the rationing of care at the behest of a council of elders board of “experts” (See: here), a solution that even some Democrats despise.

Sen. Tom Coburn (R., Okla.) in a recent interview with ABC News, railed against “dishonest” Democrats who suggest the deficit crisis can be solved without touching Medicare and other entitlements, as well as those on both sides of the aisle who have criticized the Ryan plan. “Nobody can be critical of what Paul Ryan has done,” Coburn said. “He’s the only one out there with a plan. When you have a plan, then you have the right to be critical of what Paul Ryan has done. If you haven’t put a plan on the table, you need to keep your mouth shut.”

House Majority Leader Eric Cantor (R., Va.) issued a statement Friday slamming Democrats for their failure to propose a sensible alternative to the Republican plan. “Democrats like to champion themselves as the defenders of Medicare, but today’s Democratic party is willing to stand idly by as Medicare goes bankrupt,” Cantor said, pointing to the most recent Medicare Trustees report, which found that the Medicare trust fund will become insolvent in 2024, five years earlier than had been predicted just last year.

“Republicans have offered a plan to guarantee benefits for seniors and those approaching retirement while ensuring that this important safety-net exists for Americans under 54 years of age,” he continued. “In stark contrast, the current Democratic plan for Medicare — endorsed by President Obama, Leader Reid, and Leader Pelosi — is the rationing of care, elimination of benefits, and bankruptcy of the popular program.”

Indeed, it’s becoming increasingly clear now that when it comes to Medicare — after sifting through the countless platitudes and bloviations about the need for a “national conversation” to “improve” the program and “eliminate waste, fraud and abuse” — Democrats have absolutely nothing to offer and are simply willing to go to mat for the status quo. As House Minority Leader Nancy Pelosi’s recently told lefty blogger Greg Sargent: “We have a plan. It’s called Medicare.”

Well, technically, their plan is called “Obamacare.” But Democrats continue to insist has “solved virtually all problems” when it comes to Medicare. Only that couldn’t be further from the truth. As Yuval Levin explains, the Medicare trustees report — grim as it may be — is far too optimistic. Medicare’s chief actuary, Dr. Richard Foster, points out in a letter attached the end of the report that the unrealistic assumptions and shoddy reforms included in the new health care law are simply masking the seriousness of the problem.

Foster writes: “…the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable).”

In fact, Dr. Foster has never been convinced of the Democratic plan to control Medicare costs. Foster was pressed on the issue when he testified before the House Budget Committee back in January. Rep. Chris Van Hollen (D., Md.), the ranking Democrat on the committee, asked him about the Medicare reforms included in Paul Ryan’s “Road map” (similar to those in the House GOP budget) as they compare to Obamacare. Foster explained that rising health-care costs, driven by new technology, is perhaps the biggest obstacle to saving Medicare from insolvency.

“If there’s a way to turn around the mindset for the people who do the research and development … to get them to focus more on cost-reducing tech and less on cost increasing technology, if you can do that then one of biggest components of [increasing costs] turns to your side,” Foster said. “If you can put that pressure on the research and development community, you might have fighting chance of changing the nature of new medical technology in a way that makes lower cost levels possible.”   

Van Hollen attempt to denigrate Ryan’s plan backfired, however, when Foster told him what he thought about the efficacy of the competing approaches: “The Road Map has that potential,” he said. “There is some potential for the Affordable Care Act price reductions, though I’m a little less confident about that.”

At that same hearing, Foster was also asked about the infamous “double-counting” in the new health care law — which even Health and Human Services secretary Kathleen Sebelius acknowledges — by which $500 billion is Medicare cuts is used to simultaneously “save” the program from insolvency as well as to help fund an expansive new entitlement program. As he explains, this is simply impossible. And while Obamacare assumes all of the beneficial “primary impacts” like reduced Medicare costs, it does not account for any potential “secondary impacts” that could have disastrous implications for seniors.

“If the payment rates become inadequate, if nothing is done about it and providers exit the market or refuse to treat Medicare patients, then you have some not very pleasant potential consequences,” he said. “You can’t find a doctor. Your local hospital will no longer treat Medicare. We do not model those secondary impacts.”

Republican Senators have recently authored a letter addressed to Dr. Foster and Treasury Secretary Tim Geithner asking them to reconcile the contradictory statements made by both officials on this very issue. In response to the Medicare trustees report, Geithner said the report “illustrates, once again, the importance of the reforms in the Affordable Care Act, which will significantly strengthen Medicare’s finances and extend the life of the Medicare Trust Fund.” But Foster, on the other hand, has pointed out that under the new law, the so-called “savings” to Medicare  are “used to finance other Federal outlays (such as the coverage expansions under the [health care law])” and cannot be “simultaneously used…to extend the [Medicare] trust fund.”

“Basic accounting tells us that we cannot both save and spend the same dollar,” the Senators write. “The American public deserves to know whether budgetary gimmicks are being used to mask the fiscal condition of the Medicare program and the true cost of the health care overhaul.”

“Either the new health care law will not have enough funding to operate or our Medicare system is in jeopardy of becoming insolvent much sooner than the Trustee report claims. Either Medicare beneficiaries will struggle to find hospitals, doctors and others to provide them health care services, or Medicare beneficiaries will see no changes and will be held harmless by the Medicare payment reductions. These assertions cannot be simultaneously accurate.”

Of course, these arguments are not new. Republicans have been making them since the onset of the health-care debate in 2009. But expect to hear them trotted out again if Democrats insist on making the already-passed Obamacare law their “viable alternative” to the Ryan budget. Indeed, the 2012 election may very well come down to a question of — which party’s political toxic plan do American voters despise the least? A choice between a piece of actual left-wing social engineering or a plan that Newt Gingrich once called “radical.”

Democrats want a fight over Medicare? Looks like Republicans are saying: “Bring it on.”



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