Critical Condition

A Small-Government Solution to a Big-Government Problem

Democrats — the perennial defenders of Medicare as we know it — have turned Medicare upside down with the adoption of Obamacare. And now the alarm bells are ringing in our senior-citizen communities as a result.

As it turns out, the GOP seems intent on branding itself this fall as the defenders of Medicare, attacking President Obama relentlessly for the hundreds of billions of dollars in cuts he’d make to the program to pay for his signature health-care reform law.

And while Governor Romney and his running mate, Representative Paul Ryan, may spend most of their airtime alerting Americans to the president’s cuts to Medicare, it’s their market-centered approach to reforming the program that deserves conservatives’ attention.

Only by reorienting Medicare in line with the principles of market competition can our leaders prevent the entitlement from sinking the federal budget — not to mention the economy.

Ryan’s plan to save Medicare keeps Medicare as-is for everyone over the age of 55. It then relies on a “premium support” model toward future recipients, which would provide seniors with subsidies and enable them to decide how to spend their health-care money. They’d be able to choose from an array of private plans or stick with traditional Medicare.

The would-be veep’s bold approach has become a tent-pole of Governor Mitt Romney’s presidential platform — and has distinguished the GOP ticket as the one that understands the need to introduce competitive discipline into an entitlement system wracked by inefficiency and waste.

Compare this to the Democrats’ plan for Medicare. Obamacare robs the entitlement to the tune of $716 billion by cutting payments to health-care providers.

That’s of great concern to American voters. Nearly three-quarters are worried that cuts in payments to doctors and hospitals will cause them to stop accepting Medicare patients, according to a new American Conservative Union (ACU) poll conducted by McLaughlin and Associates.

Even worse, Democrats are determined to undo the aspects of Medicare that harness market forces — and thereby yield lower costs than the alternative — like the Medicare Part D drug benefit.

Part D allows seniors to purchase prescription drug coverage from private insurers. Beneficiaries can shop around for the plan that best meets their prescription needs. Insurers must compete for enrollees’ business. And the government subsidizes most or all of the plan’s price.

As conservatives we have never been fans of the expansion of the entitlement state that Part D represents. But the Democrats’ plans for reforming the program would only make our entitlement crisis worse.

Many on the left are pushing to implement a “rebate” for those seniors who qualify for both Medicare and Medicaid, the so-called “dual eligibles.”

But if drug companies are forced to sell their drugs at below-market prices to some Part D enrollees, the result will be higher prices for everyone else. Such a “rebate” would amount to a new tax on American seniors — and would be especially harmful to those who take multiple medications.

A study by the Lewin Group, a consulting firm, found that monthly Part D premiums for non-dual-eligibles could increase by 25–50 percent if rebates were enacted.

It’s no wonder, then, that 65 percent of likely voters oppose President Obama’s proposed “rebate” in Part D, according to the ACU poll.

Of course, a plan to levy new taxes on Medicare beneficiaries is hardly surprising coming from the Obama administration. Obamacare is teeming with taxes, mandates, and regulations that threaten to throw our already wobbly economy into a tailspin.

Again, as conservatives we certainly had our issues with the creation of Part D, but the program has been successfully run and is now coming in 43 percent under budget.

In turn, the president’s proposed rebate would unravel these successes and savings and just create new problems.

Thanks to America’s aging population combined with Medicare’s flawed funding structure, the program is on the road to fiscal ruin. According to a 2012 report for the Medicare trustees, the program’s trust fund will run dry by 2024.

Voters will have to decide how to address this looming cost crisis. Republicans want to rely on the market forces that have made even the most wasteful government programs more cost-effective. And they have the backing of American voters — four in five of whom support this approach within the drug benefit.

Democrats, meanwhile, are committed to harmful new taxes and reduced services for America’s seniors.

The irony is that while Democrats use phony scare tactics to claim Republicans want to end Medicare, it is the Republicans’ sound fiscal solutions that would save it.

— Al Cardenas is the chairman of the American Conservative Union.


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