Political Science

Medicare Reform Gains Support

By Sean Evans, Chair and Professor of Political Science

Jan 3, 2012 -

Compromise is a dirty word in Washington, D.C. these days. In fact, Speaker John Boehner (R-OH) refuses to even say the word. Yet, compromise is integral to our constitutional system. The Founders created a system whereby members of the House, Senate, and Presidency would represent different constituencies and serve different terms to insure they would have different interests. For any bill to pass, a majority of districts and states and the nation would have to compromise to pass a law.

The key to compromise though is selling the deal. As satirist Ambrose Bierce wrote, a compromise is “an adjustment of conflicting interests as gives each adversary the satisfaction of thinking he has got what he ought not to have, and is deprived of nothing except what was justly his due.”

Last Friday, conservative Congressman Paul Ryan (R-WI) and liberal Senator Ron Wyden (D-OR) announced a compromise that could be the template for future Medicare reform that both sides can potentially view as a win-win.

The proposal protects traditional Medicare, which currently pays for each treatment no matter what, for all seniors over 55. But beginning in 2022, all seniors will have the option of either traditional Medicare or a voucher to buy private health insurance as long as it provides the same benefits as Medicare. The voucher will be indexed to GDP growth plus 1% and poorer seniors will receive more generous vouchers. Competition and more cost conscious consumers should lead to lower costs which will save money. Furthermore, Medicare spending will be capped, presumably at a level equal to the number of vouchers of those who choose Medicare. This cap will end Medicare’s “all-you-can-treat” program that is bankrupting our country.

This compromise gives Republicans several wins. First, Republicans reduce the size of government and restraining the growth of government spending. Second, Republicans advance their free market ideals by forcing government to compete with private business. Third, Republicans receive political inoculation from the Democrat’s Medi-“scare” tactics by supporting bipartisan health care reform endorsed by a liberal Democrat who was formerly a lobbyist for a senior citizen advocacy group and based on a proposal from the Bipartisan Policy Center.

The plan also gives Democrats several wins. First, Democrats get Republicans to accept a “public option” by having Medicare compete against private insurance which sets a precedent for future health care reform. Second, Democrats get Republicans to accept many key components of the Affordable Care Act as both plans promote insurance exchanges and subsidies to buy health insurance. This compromise complicates Republican efforts to repeal the Affordable Care Act. Third, Ryan’s acceptance of this plan creates huge holes in his Roadmap to Prosperity that showed how the GOP could balance the budget without raising taxes. The more generous benefits of this plan make it nearly impossible for Republicans to argue we can balance the budget without raising taxes.

Most importantly, the plan guarantees health care for seniors while placing the United States on a more sound financial footing. If not reformed, Medicare will almost double by 2050 crowding out all other government spending. In essence, reform saves Medicare while no reform means the end of Medicare.

There are still details to be worked out, but in this Christmas season, maybe even politicians are finally giving us a reason to be hopeful.

This column originally appeared in the Dec. 23 edition of The Jackson Sun