Re: Obama’s Narrowing Options/Mediscare

by Avik Roy

My subcontinental confederates, Ramesh and Reihan, wrote last week about the probability and efficacy of the Obama reelection team launching an attack against the GOP’s plans for entitlement reform. “Obama’s best bet,” wrote Ramesh, “is probably to hit Romney again and again for his plans for Social Security and Medicare. . . . It seems more likely than any of Obama’s other options to win him a second term.” Says Reihan, “Ramesh Ponnuru is puzzled [that they haven't tried already] — and so am I.”

It’s certainly probable that Democrats will attempt this gambit. But succeeding with it — especially with regards to Medicare — will be harder than it looks. Here’s why:

1. Wyden-Ryan and the Obama budgets use exactly the same target growth rate for Medicare spending: GDP plus 0.5 percent. In other words, when it comes to long-term Medicare spending growth, the Obama budget is just as parsimonious as the GOP budget. The difference is that Obamacare creates a Medicare Independent Payment Advisory Board to ration care via unelected bureaucracy, whereas Wyden-Ryan gives seniors control over their own health dollars. Here’s betting that most seniors will prefer the market-oriented approach.

2. Obamacare cuts Medicare Advantage and slows Medicare growth beginning now, for current retirees, whereas the Wyden-Ryan plan makes no changes to Medicare for current retirees, only going into effect for those younger than 55.

In other words, by conventional fiscal scoring methods, the Obama budget is actually stingier than Wyden-Ryan when it comes to Medicare. Where Wyden-Ryan may do better over the long term is by introducing competitive efficiencies into the program. But the Congressional Budget Office doesn’t attempt to incorporate such market-based effects into its models.

Democrats certainly may try Mediscare. But as Inigo Montoya of The Princess Bride would reply, “You keep using that word. I do not think it means what you think it means.”

Avik Roy is a senior fellow at the Manhattan Institute and the author of The Apothecary, the Forbes blog on health-care and entitlement reform. He is a member of Mitt Romney’s Health Care Policy Advisory Group. You can follow him on Twitter at @aviksaroy.

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