My View: Political Hot Potatoes
April 2, 2013
There are political hot potatoes of varying degrees, but one of the hottest is how to keep Medicare viable in the future.
We have come to a polarized legislative standstill full of poison pills fed by one partisan-dominated house of Congress to the other. A third way is sorely needed and boiling up underneath the partisan rhetoric may be a possible compromise.
The decision time is now, since the cost of Medicare in the future is part of the current budget debate before Congress. Those under 55 should keep their eyes wide open as they make plans for their retirement.
I recall attending some political events four or five years ago when angry senior citizens with hand printed signs waived “Don’t let government take my Medicare away.” My takeaway was that seniors feel passionately about Medicare, which presents tough political challenges for those seeking to make sure Medicare is available for the next generations.
So far proposed solutions are either unrealistic or politically too hard for constituents to swallow. Those solutions cover the map: to do nothing but to raise taxes or to reduce benefits to all or some, to increase eligibility age, to increase co pays and contributions, or to get it out of government budgets by privatizing it with government subsidized vouchers (aka premium support) that are not enough to keep up with future costs.
The “do nothing” option is no option at all. There is a bulge in numbers of baby boomers tapping into Medicare that is just beginning and costs of medical care have skyrocketed with increasing availability of life extending treatments and equipment. Obamacare helps some, changing reimbursement methods, providing greater access to preventative care, and efficiencies, but that still is not enough to stop costs from increasing until there is nothing left in the non-military budgets to fund infrastructure, education, and social safety nets .
What both political parties have done is what holders of hot potatoes do … toss it to someone else. In this case, they promise no changes will affect those 55 and older. Grandfathers and grandmothers have been grandfathered in.
Republicans have the most motivation to find a third way. For Republicans it is a particularly sensitive topic since seniors exempted by age from proposed changes in Medicare were the only demographic they carried in 2012, other than non-minority men. Their plan to issue inadequate vouchers and move future seniors into the private sector is not popular with voters in general, nor is reducing the debt, the GOP argument for doing it. The voucher concept polled badly in 2012 per Kaiser Health Tracking, and giving seniors the choice between government or private insurance changed little. Debt reduction is a top concern for a mere 5 percent of voters per a recent CBS News/New York Times poll, finishing far behind jobs and the economy and “other.” If they are not careful, the GOP could lose recently retired seniors in future elections.
A potential way out is emerging quietly from the White House and some Republicans seeking an alternative to vouchers. Traditional government-provided Medicare would continue, except the deductibles for doctors visits would increase and the ones for hospital care would be reduced. The theory is that the costs of doctors visits are not increasing nearly as much as the costs of hospital care. The advantage is that seniors would no longer have to pay high prices for supplementals to cover the cost of hospital care. The price the White House may demand for the compromise is to increase some revenue, but it may be the only way the GOP budget hawks can get their way without ticking off a demographic that means so much to them.