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All Da King's Men

Mediscare, Or Pushing Grandma Over The Cliff ?

By Da King Published: May 26, 2011

Democrats are mighty happy about the results of a New York special congressional election held on tuesday. In that race, the Democrat candidate, Kathy Hochul, defeated the Republican candidate, Jane Corwin, by a margin of 47-43%. A third candidate, Jack Davis, who ran under the Tea Party banner, got 9% of the vote.

There are two reasons Democrats are smiling today. The first is that the Democrat Hochul won in a district that is considered a Republican majority district. The second is that Hochul made Rep. Paul Ryan's (R-WI) Medicare plan one of her major issues. Corwin supported Ryan's plan. Hochul was against it, and a left-wing group was running ads in New York of a Ryan look-alike pushing grandma over a cliff. (I seem to recall left-wingers being shocked and outraged over violent political imagery a few short months ago. Must have been my imagination). Democrats say Hochul's victory proves Americans reject Ryan's plan. Republicans downplay the Democrat victory, saying the Tea Party candidate siphoned votes away from the Republican candidate, splitting the vote and handing the Democrat a victory. Let's examine these two claims.

First the Republican claim. Davis, the third candidate, ran under the Tea Party banner, which would seem to indicate he did indeed take votes away from the Republican candidate. Davis also lost the special election Republican primary to Corwin before switching to the Tea Party banner, another indicator he took votes away from the Republican. However, Davis was a lifelong Republican who switched parties and ran unsuccessfully as a Democrat in elections in 2004, 2006, and 2008. In addition, many Tea Party groups disavowed the candidacy of Davis. Democrats are trying to say Davis also took votes from Hochul. Maybe so, but I have little doubt he took many more votes from the Republican. Just appearing on the ballot with 'Tea Party' next to his name would accomplish that.

The far more important claim is the one being made by Democrats about Americans rejecting Ryan's Medicare/budget plan, because the Republican-led House Of Representatives passed that plan last month, with the vote being along party lines. The Democrat-led Senate rejected Ryan's plan yesterday, with Democrats voting against it. Some Republican Senators also voted against it - Scott Brown (Massachusetts), Lisa Murkowski (Alaska), Susan Collins (Maine), Olympia Snowe (Maine), and Rand Paul (Kentucky). Many Democrats see the Ryan Medicare/budget plan as a big opportunity for them to win in 2012.

Democrat leaders are attempting to capitalize on the "push grandma over the cliff" message. Senate Majority Leader Harry Reid (D-NV) keeps talking about the GOP's desire to "kill Medicare". House Minority Leader Nancy Pelosi (D-CA) said Hochul's “victory in a staunchly Republican district has shocked the political world and sent an unmistakable sign that the American people will not stand for the Republicans’ reckless and extreme agenda to end Medicare". You get the idea.

Rep. Ryan says the Democrats are engaging in "Mediscare" and accuses them of demagoguery. Ryan says Americans will approve of his plan once they understand it, and once they accept the reality of what will happen if we don't reform Medicare.

Do Americans reject Ryan's plan ? Polls suggest it depends how the question is asked. Here are examples from two polls, one from the New York Times where a plurality of responders supported the plan, and one from the Washington post where responders rejected the plan:

The Times asked:

In order to reduce the budget deficit, it has been proposed that Medicare should be changed from a program in which the government pays doctors and hospitals for treating seniors to a program in which the government helps seniors purchase private health insurance. Would you approve or disapprove of changing Medicare in this way?

Yet the Post (PDF) asked:

I'm going to read you two statements about the future of the Medicare program. After I read both statements, please tell me which one comes closer to your own view: Medicare should remain as it is today, with a defined set of benefits for people over 65, OR Medicare should be changed so that people over 65 would receive a check or voucher from the government each year for a fixed amount they can use to shop for their own private health insurance policy.

Regardless of how poll questions are asked, Ryan and Republicans have a problem. A recent poll of Ohioans showed a whopping 75% were against cutting Medicare to reduce the debt. An Assocated Press poll found 54% believe we can balance the federal budget without reducing Medicare costs. If Ryan thinks people will support his Medicare plan once they understand it, well, he better start explaining it to them. My feeling is that change is usually met with resistance, even if that change is needed. People don't like to have anything taken from them, ever, and according to the Congressional Budget Office (CBO), Ryan has an even bigger problem. The CBO says Ryan's Medicare plan will require seniors to pay more for their Medicare in the future, and it won't reduce health care costs either:

Under the [Ryan] proposal, most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare under either of CBO’s long-term scenarios. CBO estimated that, in 2030, a typical 65-year-old would pay 68 percent of the benchmark under the proposal, compared with 25 percent under the extended-baseline scenario and 30 percent under the alternative fiscal scenario.

A private health insurance plan covering the standardized benefit would, CBO estimates, be more expensive currently than traditional Medicare. Both administrative costs (including profits) and payment rates to providers are higher for private plans than for Medicare. Those higher costs would be offset partly but not fully by savings from lower utilization stemming from two sources. First, private health insurers would probably impose greater utilization management than occurs in Medicare. Second, private plans might restrict enrollees’ ability to purchase supplemental insurance plans; enrollees would thus face higher out-of-pocket costs than they do in Medicare, and that increased cost sharing would encourage lower utilization. On net, for a typical 65-year-old in 2011, CBO estimates that average spending in traditional Medicare will be 89 percent of (that is, 11 percent less than) the spending that would occur if that same package of benefits was purchased from a private insurer.

That's a pretty tough sell for Rep. Ryan. The idea with health care is to reduce overall costs, not increase them. That is the biggest flaw in Ryan's plan. As for the CBO's estmate that seniors will have to pay more under Ryan's plan, that is actually less troubling, because there is a hard truth we must face - Medicare/Medicaid costs are skyrocketing, and we have to address them. If we can't reduce those costs, somebody has to pay for them. The health care fairy can't wave her magic wand and make this all go away. We have to face reality.

Former President Bill Clinton had something important to say on the subject yesterday:

Even though Clinton disagrees with the plan put forth by Ryan, the two men both know something must be done. As Clinton said, health care costs will devour our economy. That is the truth. Entitlements are the single biggest driver of future government spending, and therefore the biggest drivers of deficits, debt, and/or tax increases.

I share the same fear as Clinton, that Democrats will beat the kill grandma, kill Medicare drum, using it as a political scare tactic to win elections. The problem with that is, as the Democrats do nothing (the Dems haven't even produced a 2011 budget, for chirissakes, and we're over halfway through 2011), nothing is accomplished. Our challenges remain unmet. The longer we avoid dealing with reality, the more difficult and painful the solutions become. I'm going to leave you with two charts to ponder from the Heritage Foundation.

First is this link to a chart showing that, based upon historical tax revenue to GDP percentages (18%), entitlements will devour ALL tax revenue by 2049. There won't be money left for ANYTHING else.

Second is this link to a chart showing that, based upon current policies, our national debt will skyrocket to 344% of GDP by 2050.

Our country is on an unsustainable path, and anyone who tells you differently is, to put it simply, LYING. I know liberals think I'm some mouthpiece for conservatives (because I'm definitely anti-liberal on fiscal matters. See: unsustainable), but what I really am is someone who sees not just grandma, but his entire country going over a cliff. More than anything else, what I want to do is prevent that from happening.

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