The Real Threat to Seniors: Single Payer

No sooner had the president’s budget arrived on Capitol Hill last Monday than the demagoguery began. Within hours of the budget’s release, Sen. Brian Schatz (D-HI) tweeted that “One party wants to expand Medicare and Medicaid and the other wants to cut them.” The facts, however, show a different contrast—one party attempting to keep a promise to seniors, and another abandoning that promise to fund other priorities.

First, the budget would not “cut” Medicare. As multiple administration officials explained during congressional hearings on the budget, Medicare spending would continue to rise every year under the president’s proposals. Only in a government town like Washington could lawmakers say with a straight face that a reduction in projected spending increases constitutes a “cut.”

Third, the budget proposals would yield tangible benefits to seniors through lower Medicare cost-sharing. A proposed rule released in July found that one of these changes would lower beneficiary co-payments by $150 million in one year. If enacted in full, seniors would see billions of dollars in savings over the ten-year budget window.

Fourth, and most importantly, legislation Schatz supports wouldn’t “expand” Medicare and Medicaid, it would eliminate them. Sen. Bernie Sanders’ single-payer bill, which Schatz has co-sponsored, would, in addition to ending Medicaid, liquidate the Medicare trust funds, using the proceeds to finance the new government-run program. As I noted last year, that makes Sanders’ bill, as well as similar legislation introduced in the House last month, not “Medicare for All” but “Medicare for None.”

That raid on the Medicare trust funds represents not just an accounting gimmick, but a statement of Democrats’ priorities—or, rather, the lack of them. Medicare has long-term funding problems, which the president’s budget attempts to address. But in using the Medicare trust funds as a piggy bank to finance a single-payer system—the full cost of which Democrats have no idea how to fund—the party shows how, in trying to provide all things to all people, it will abandon the most vulnerable.

Perhaps the best rebuttal to “Medicare for None” came from, of all people, Rep. Steny Hoyer (D-MD). In a speech on the House floor in September 2009, Hoyer said:

At some point in time, my friends, we have to buck up our courage and our judgment and say, if we take care of everybody, we won’t be able to take care of those who need us most. That’s my concern. If we take care of everybody, irrespective of their ability to pay for themselves, the Ross Perots of America, frankly, the Steny Hoyers of America, then we will not be able to take care of those most in need in America.

Therein lies the true flaw in the left’s logic. Whereas the president’s budget would work to protect Medicare for vulnerable seniors, Schatz, Sanders, and their supporters would liquidate the Medicare trust fund to finance “free” health care for Mark Zuckerberg and Elon Musk. The choice between the two paths seems as obvious as it is clear.

This post was originally published at The Federalist.

No, Nancy Pelosi, Republicans Aren’t “Cutting” Medicare — But They Should

In a many-layered case of irony, House Minority Leader Nancy Pelosi (D-CA) attacked Republicans on Wednesday for doing something they didn’t do—but she did. In a letter to her Democratic colleagues, Pelosi wrote the tax reform bill “will lead to devastating cuts to Medicare and Medicaid.”

First things first: A slowdown in a program’s projected growth rate does not constitute a “cut.” That fact applies just as much to Republican spending proposals as Democratic ones. You don’t have to take my word for it: Multiple fact check articles discussing Obamacare’s reductions in Medicare spending pointed out that under Democrats’ law, “Medicare spending will increase each year but at a lower rate.”

Pelosi’s 2011 phraseology hit the nail on the head, because Democrats did “take” money out of Medicare to fund Obamacare’s new entitlements. While on paper the spending reductions extended the life of the Medicare trust fund, the Congressional Budget Office concluded that Obamacare did not “enhance the ability of the government to pay for future Medicare benefits.”

While the Democrat record on Medicare leaves much to be desired, so too does the Republican one. Whereas Democrats reduced Medicare spending, then diverted those savings to fund another new and costly entitlement, Republicans just last month turned around and increased Medicare spending.

In the February budget “deal,” Republicans repealed the Independent Payment Advisory Board (IPAB). While Obamacare created this unelected, unaccountable board of bureaucrats to make binding rulings regarding Medicare, it did so for a worthwhile purpose: To cap Medicare spending. As I noted last fall, Republicans could have kept the caps in place, while repealing the board. They chose not to do so. As a result, the budget “deal” raised entitlement spending rather than lowering it.

As it stands now, the “devastating cuts to Medicare and Medicaid” that Pelosi claimed to warn her colleagues about on Wednesday seem inevitable—not because Republicans will soon pass legislation slowing the growth of entitlements, but instead because they refuse to do so. Because some Republicans remain under the misapprehension that Medicare “is underfunded,” and because liberals love running “Mediscare” campaigns designed to frighten seniors into voting Democratic, Republicans seem poised to do exactly nothing on entitlement reform for the foreseeable future.

At least, until the debt crisis arrives—which it will, and sooner than many think. With the imminent return of trillion-dollar deficits, and the federal government already $21 trillion in debt, China and other nations may not take kindly to the bipartisan profligacy perpetrated by Democrats and Republicans alike.

As I noted two years ago, if not for the double-counting fiscal gimmicks included in Obamacare, the Medicare Hospital Insurance Trust Fund would already have been exhausted, putting the program’s solvency quite literally on borrowed time.

Last month, in typically understated fashion, Pelosi tweeted about how Republicans were “plotting to destroy your Medicare, Medicaid, and Social Security.” That claim implies a level of intent—that Republicans actually have a plan to reform entitlement spending—that quite clearly does not exist.

Instead, Republicans and Democrats will continue to destroy Medicare, Medicaid, and Social Security in the same way they have over the past several decades. Both parties will ignore the problem and do nothing until it’s too late. It’s the most insidious type of “bipartisanship,” but in Washington, also the most common.

This post was originally published at The Federalist.

What’s Wrong with Republicans on Medicare

To demonstrate that most Republicans have no desire to reduce federal spending, one need look no further than a Politico story last Thursday. The article recounted how the pending tax bill could trigger automatic reductions in mandatory spending, including to Medicare, under the pay-as-you-go law. When presented with that scenario, Rep. Phil Roe (R-TN) responded thusly:

Medicare is underfunded as it is. If we have to change the PAYGO [pay-as-you-go] rules [that trigger the spending reductions], we’ll just change ‘em. At the end of the day, we—Republicans and Democrats—have to go home and face our constituents. I wouldn’t want to go home and face my constituents if I’d cut Medicare.

Over and above the obvious fact that Roe expressed less-than-zero interest in actually reducing federal spending, he also showed some tortured and erroneous logic in arriving at his position.

To put Medicare’s spending in another context: According to International Monetary Fund statistics, in 2016, the program spent more than the total economic output of all but 20 nations. That same list demonstrates that Medicare spent more than the entire economic output of New Zealand, Greece, and Portugal combined. Yet Roe considers the program “under-funded.”

But Medicare Is Going Insolvent, and Fast

As I noted last year, the Medicare trustees report issued in 2009, the year before Obamacare’s enactment, predicted the program’s Part A (Hospital Insurance) Trust Fund would become insolvent in 2017—this year. The following year, after Obamacare became law, the trustees postponed the insolvency date from this year to 2029.

But, as the Congressional Budget Office noted, Obamacare did not “enhance the ability of the government to pay for future Medicare benefits.” Put simply, because Obamacare’s re-directed Medicare savings to pay for new entitlements, the provisions improved Medicare’s solvency only on paper. Then-Health and Human Services secretary Kathleen Sebelius admitted as much when, asked in congressional testimony whether the Medicare provisions were being used “to save Medicare or…to fund [Obamacare],” she answered, “Both.”

Substantively, Obamacare’s fiscal schemes did not help Medicare’s solvency one whit. The program was scheduled to become functionally insolvent this year, and because Congress has enacted few meaningful reforms to the program in the time since, can be considered as such. However, because they improved the program’s solvency on paper, Obamacare’s budgetary gimmicks have allowed people like Roe to deny the problem exists, which will only worsen the scale of fiscal adjustment needed when Medicare finally faces its fiscal reckoning.

Reducing Spending Increases Is Not a ‘Cut’

As the New York Times has noted, Republicans argued vociferously—and correctly—earlier this year that slowing the growth of Medicaid spending in their “repeal-and-replace” bills did not represent a “cut” in that program. Yet Roe quickly resurrected the familiar (and incorrect) talking point about budget “cuts” when discussing Medicare.

Over the years, Republicans have spent far too much time demagoguing Obamacare for “cutting” Medicare. (As noted above, the problem with the law wasn’t that it reduced Medicare spending, it’s that it spent those Medicare savings to fund Obamacare, rather than shore up Medicare’s finances.) They now face many of the same opportunistic attacks from the Left regarding the entitlement reform proposals included in the “repeal-and-replace” bills. So why is Roe retreating into that same mindset that a decrease in a spending increase represents a “cut?”

Roe may not want to go back home and explain to his constituents why he reduced Medicare spending. But sooner or later, he and his fellow members of Congress will have to do just that. And the more he and his colleagues continue their pattern of obfuscation and denial through these kinds of ill-informed comments, the worse those spending reductions will end up being.

This post was originally published at The Federalist.

Liberals’ Medicaid Alarmism

The Senate health care bill is dead, and that’s at least in part due to overheated rhetoric from the left about Medicaid. Many of the over-the-top claims lacked important facts or context, and seemed primarily designed to scare people rather than prompt civil debate.

For instance, liberals claimed that Republican plans to reduce the growth of Medicaid spending by nearly $800 billion in the next decade would “unravel” the program, as Clinton administration labor secretary Robert Reich put it. Yet Obamacare did nearly the exact same thing to Medicare. Obamacare reduced Medicare spending by $716 billion, according to a 2012 Congressional Budget Office estimate. And it did so not to improve Medicare’s ability to pay for care for the next generation of seniors, but instead to fund new Obamacare entitlements.

The liberals who claimed this year’s Republican health bills would “cut” Medicaid are the same ones who endorsed Obamacare’s reductions in Medicare spending. Just look at AARP’s framing of the issue: When Democrats reduce Medicare spending by hundreds of billions of dollars, the organization calls it “taking steps to reduce waste, fraud, abuse, and inefficiency.” But when Republicans reduce Medicaid spending by roughly equivalent amounts, AARP decries “unsustainable cuts” to the program.

Likewise the issue of caps on spending. A group of health care advocacy organizations sent a letter to Capitol Hill last month expressing “grave concern about potential changes to the fundamental structure and purpose of Medicaid,” saying they “vehemently oppose converting Medicaid’s funding into a capped financing structure.”

But this objection to capped payments also seems ironic at best, and disingenuous at worst. Section 3403 of Obamacare imposed per capita caps on Medicare spending, to be enforced by the Independent Payment Advisory Board — a group of unelected bureaucrats. So why did many of the same organizations who claim they “vehemently oppose” capped funding for Medicaid, endorse a health care bill that created the same funding structure for Medicare? Is it because a Democratic president proposed the former change, and a Republican Congress is debating the latter?

Then there’s the alarm raised by Andy Slavitt, a former head of Medicare, Medicaid and the Affordable Care Act during the Obama administration. He recently claimed that Republicans had a secret plan “not just to cut Medicaid, but to allow states to eliminate it.” He said a “new waiver process” in the Senate bill — really a modification of an existing Obamacare waiver — would allow states to transfer Medicaid beneficiaries to private coverage, thereby allowing them to “eliminate” Medicaid.

Yet the Obamacare waiver process explicitly prohibits changes to Medicaid — and the Senate bill would not have changed that. In addition, states have always had the ability to “eliminate” Medicaid; the federal government can’t force states to participate in the program. That’s why Arizona didn’t join until 1982, nearly two decades after Medicaid’s creation. States have remained in Medicaid because the federal government provides significant funding to them for their programs — and that funding would continue to rise, albeit more slowly, under both the House and Senate bills.

To be sure, both sides have exhibited their share of political opportunism. Republicans shouldn’t have attacked Obamacare’s Medicare savings as “cuts” — a reduction in projected growth rates should never be considered a “cut” in government spending. And conservatives were guaranteed to reap the political whirlwind sooner or later.

But the left’s hyperbolic rhetoric, coupled with some pretty apparent hypocrisy, not only helped kill the Senate health bill. It did the American people a disservice by detracting from the debate on health care that our country deserves.

This post was originally published at USA Today.

Rep. Hensarling Op-Ed: Medicare and Entitlements

It’s become an annual ritual — almost as much a herald of springtime in Washington as the cherry blossoms along the Potomac: President Bush advances a plan for entitlement reform, and Democrats in Congress proclaim it “dead on arrival.” It happened with Social Security reform three years ago, it happened with the president’s proposed savings from Medicare last year, and now it’s about to happen again with the new and enhanced Medicare proposals that the White House has delivered to Capitol Hill. But things are a bit different this time — for better and for worse.

The worsening news comes from the Medicare trustees themselves, whose latest report details the precarious financial situation of the trust funds that finance Medicare expenditures. The trustees warn that Medicare faces collective unfunded obligations of more than $74 trillion — more than six times the current size of the American economy. And those obligations are not getting smaller; they keep increasing. The Government Accountability Office estimates that for each year that Medicare and Social Security entitlements go unreformed, their projected shortfall grows by an additional $2 trillion.

The implications of these warnings from the trustees could not be more stark to the 200 million Americans under age 54 — who, according to the latest trustees’ report, will not be able to retire with full Medicare benefits. The Medicare Part A trust fund is scheduled to be “exhausted” — in plain English, flat broke — in 2019. This means that tens of millions of Baby Boomers face an uncertain retirement rife with questions about the future of health care.

If there is a silver lining to be found amid the darkening fiscal clouds, it lies in statutory provisions that ensure that proposals to curb Medicare spending will live to see the light of a fair vote in Congress. Fortunately, my Republican Study Committee colleagues and I added a little-known provision into the Medicare Modernization Act of 2003 — the overarching law that added prescription drug benefits to Medicare — that requires the independent Medicare trustees to issue a funding warning if Medicare expenditures are projected to grow to levels that will take away from other important national priorities. The president has now responded to that warning by submitting proposals that will help save the Medicare system by slowing its growth and empowering concerned Americans to demand comprehensive entitlement reform.

The president’s budget constituted a good first step toward Medicare reform, proposing to slow the growth of Medicare by nearly $178 billion over the next five years. Contrary to the mythical rhetoric of congressional Democratic leaders, the president’s budget proposal would not “cut” Medicare. Instead, his proposal allows Medicare to grow by 5 percent, instead of the 7.2 percent currently projected. Since most providers would continue to receive increased reimbursements from the federal government, the level, number and intensity of services provided would still continue to grow. And therein lies one of the keys to true Medicare reform: ensuring that budgetary savings derive from wise choices by patients and doctors about the most cost-effective treatment options.

In addition to the White House budget proposals, there are additional, more comprehensive solutions that have the potential to yield greater savings and slow the growth of the health costs that threaten to cripple our future. Solutions that would restructure Medicare cost-sharing and increase means-testing for wealthy beneficiaries would ensure the program’s sustainability by making beneficiaries more cost-conscious. Solutions like medical liability reform that would reduce providers’ costs associated with legal claims, saving money for Medicare and the general public. Solutions that would transform Medicare into a health care system similar to that which members of Congress have so that all seniors receive better care at a lower cost.

The president’s proposals have advanced the discussion of Medicare reform, and the trigger mechanism which we instituted five years ago provides Congress with a golden opportunity to conduct a thorough, stem-to-stern review of the way seniors receive health care and ensure that we can maintain our promises to baby boomers and future retirees alike.

The current race for the White House is teaching us many things about the American people. They are clamoring for change and yearn for leaders who will not only speak the truth about the problems facing our nation but work to provide solutions to them. Congress has an opportunity to do just that without waiting for a new president.

We have 2 trillion — that’s 2,000,000,000,000 — reasons to act on comprehensive entitlement reform, and to act this year. The American people expect no less.

This post was originally published in The Washington Times.