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.

Rep. Hensarling Op-Ed: Democrat Medicare Bill Shortchanges Minorities

Over the last several weeks, I have heard from physicians rightly concerned that lawmakers had yet to pass legislation repealing a scheduled 10.6 percent reduction in their Medicare reimbursement rates. No doubt Congress should and will act soon, to preserve seniors’ access to physician care. This is critical for doctors, specifically primary care physicians, whom already face tremendously difficult challenges. But behind the scenes of the physician reimbursement debate lies an interesting paradox in the way Congressional Democrats protect wealthy seniors, while exposing large numbers of low-income beneficiaries whom the legislation purports to protect.

Nestled into the sprawling 278-page bill the House passed with limited debate are provisions that would expand eligibility for subsidy programs that aid low-income beneficiaries with Part B premium payments, deductibles, and co-insurance. Coupled with several proposals designed to increase outreach to low-income populations, the changes would cost hardworking Americans $7 billion over the next ten years.

Of course, budgetary rules require Congressional Democrats to pay for this expansion of the Medicare benefit. By listening to Senator Obama, you might assume that the likeliest culprit would be yet another tax on the wealthy. But that is far from it. The expanded subsidies for low-income individuals – as well as the physician reimbursement provisions and other related Medicare provisions – are paid for by cuts to Medicare Advantage plans that provide coverage to millions of seniors.

The paradox arrives in the discovery that Medicare Advantage plans disproportionately serve low-income and minority populations. Nearly half of all Medicare Advantage beneficiaries had incomes under $20,000; for Hispanic and African-American populations, that number rises to 70 percent. While policy-makers argue about “overpayments” to Medicare Advantage plans, many low-income seniors have come to appreciate – and rely on – the lower costs and increased benefits that these plans have provided. But as a result of the House-passed legislation, over 2 million seniors, including 1.8 million in private fee-for-service plans popular in rural areas with limited physician access, will lose their Medicare Advantage coverage.

To sum up: Congressional Democrats are cutting benefits for some low-income seniors – in order to extend benefits to other low-income seniors. All the while, proposals to increase Part D premiums for the wealthiest Medicare beneficiaries -think George Soros and Warren Buffett – languish in legislative purgatory.

There is a Machiavellian logic to Democrats’ apparent lack of appetite for Medicare means testing. If wealthier individuals become less dependent on the welfare state for their health benefits in retirement, political support for the popular program may wane. But when President Bush proposed to extend current means-testing of Part B premiums to the prescription drug plan as one way to alleviate Medicare’s funding woes, the New York Times considered this element of the President’s plan a “reasonable” proposal. If President Bush and the editorial board of the New York Times can both see the merits of this concept, there is little reason why Congress, in its infinite wisdom, should not see fit to include it in the Medicare bill.

Instead, the legislative product being considered constitutes, at best, an attempt at behavioral modification – forcing low-income beneficiaries away from plans run by “greedy” insurance companies – and at worst a perverse experiment in social Darwinism, pitting one group of vulnerable seniors against another in a competition for Medicare dollars. All this so Warren Buffett can avoid having his estimated $60 billion fortune decimated by paying an extra $2 per day for prescription drug coverage.

In March, the Medicare trustees issued their annual report, which noted that Medicare faces $86 trillion – yes, trillion – in unfunded obligations. The two best ways to stem this looming tide of debt are increased competition among private Medicare Advantage plans and proposals utilizing means-testing to dedicate scarce health care resources to the seniors who need them most. Yet the House bill undermines the former, while ignoring the latter.

While introducing Medicare legislation very similar to the bill the House passed, Senate Finance Committee Chairman Max Baucus decried efforts to “protect private insurance plans” that would “leave low-income beneficiaries behind,” arguing that his “balanced legislation” will prevent the latter while discouraging the former. I agree with Senator Baucus that his legislation is indeed balanced – it would ensure that a senior with $20,000 in income will continue to pay as much for prescription drugs as Ross Perot (or Senator Baucus himself). But in their ideological quest to undermine private insurance plans, Congressional Democrats are indeed leaving millions of beneficiaries on Medicare Advantage plans, many of them low-income, behind. Speaker Nancy Pelosi and House Democrats – Cutting coverage for beneficiaries while protecting billionaires.

This post was originally published at The Washington Times.