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The Hypocrisy of the GOP’s New-Found Love for Medicare “As We Know It”

August 31st, 2009 . by economistmom

This post was inspired by an email exchange I had with Bruce Bartlett this morning, which I’ll quote from a little later, but Bruce didn’t use the word “hypocrisy”–that’s my own fairly careful choice of words after giving it some thought and reading this explanation of what “hypocrisy” means, from Wikipedia (my emphasis added):

Hypocrisy is the act of pretending to have beliefs, opinions, virtues, feelings, qualities, or standards that one does not actually have. Hypocrisy is thus a kind of lie. Hypocrisy may come from a desire to hide from others actual motives or feelings.

Hypocrisy is not simply an inconsistency between what is advocated and what is done. Samuel Johnson made this point when he wrote about the misuse of the charge of “hypocrisy” in Rambler No. 14:

“Nothing is more unjust, however common, than to charge with hypocrisy him that expresses zeal for those virtues which he neglects to practice; since he may be sincerely convinced of the advantages of conquering his passions, without having yet obtained the victory, as a man may be confident of the advantages of a voyage, or a journey, without having courage or industry to undertake it, and may honestly recommend to others, those attempts which he neglects himself.”[1]

By the above interpretation, I’d say President Obama is not being a hypocrite, because his Administration has put forth some policy proposals that they truly want to see happen.  They’re sincerely convinced of the need to expand health care coverage.  They’re sincerely convinced of the importance of fiscal responsibility and the need to both “bend the health cost curve” over the longer run and offset the cost of their proposal over the first ten years.  And they’ve offered up a way they think they can honor all those goals.  It’s just not yet clear that President Obama will be able to “follow through” on those strong convinctions–i.e., be “strong and powerful” enough to achieve those goals (claim “victory”) in whatever policies actually, eventually, get enacted.  (It’s like David Wessel said the other day:  President Obama from here forward will be judged on his achievement and not just his effort.)

Why do I accuse the Republicans of being hypocrites on this issue of health care reform?  (And by the way, don’t worry–there are and will be plenty of other things I can accuse Democrats of being hypocrites on.)  Because I don’t think the Republicans really want to “protect” Medicare “as we know it”–the way they’re pretending, claiming, or at least strongly suggesting via the town hall protests against the President’s health reform plan.  As Ronald Brownstein wrote in the National Journal last Friday (my emphasis added):

Republican National Committee Chairman Michael Steele’s pledge this week to “protect Medicare” might have been more convincing had it not come five months after nearly four-fifths of House Republicans voted to literally end the program as we know it for all Americans younger than 55.

They cast that vote on April 2 in support of a GOP alternative budget plan that would have converted Medicare from an open-ended entitlement that guarantees seniors virtually unlimited access to care into a voucher system that provides future retirees only a fixed sum of money to purchase private health insurance. That approach — a variation of legislation Republicans actually passed through the House when they controlled it in 2003 — has some advocates among health policy experts. But this longstanding GOP prescription for Medicare emphatically violates most of the six principles that Steele enshrined this week as the pillars of a Republican “Health Care Bill of Rights” for seniors.

Although Republicans are accusing President Obama of embarking on a “risky experiment” by pursuing Medicare cost savings to help fund universal coverage, by any measure the plan that House Republicans endorsed this spring represents a much more wrenching change in the program

With polls showing seniors uneasy about Obama’s health care plans, Steele this week committed Republicans to six reassuring goals on Medicare. Among them were avoiding cuts in the program and ensuring that seniors can keep their current coverage. But those pledges are flatly incompatible with the Medicare agenda that Republicans have pursued for the past decade — and reaffirmed with their vote this spring…

Rep. Paul Ryan of Wisconsin, a leading GOP fiscal thinker…insert[ed] into the House Republican budget an especially aggressive version of premium support. Ryan proposed to maintain the existing Medicare program, which is open to seniors once they turn 65, for all current recipients and anyone else who is at least 55 today. But the bill mandated that all younger Americans, once they turn 65, would instead receive a voucher to purchase private insurance (with sicker and poorer seniors receiving larger vouchers). In Ryan’s proposal, unlike the 2003 Republican plan, new retirees would not even have the option of buying into traditional fee-for-service Medicare once the voucher system is implemented; Medicare as it now exists would disappear once the last retirees still eligible for it passed away. House Republicans backed the GOP budget including that plan to phase out conventional Medicare this April by a vote of 137-38, but it was rejected amid unanimous Democratic opposition.

Ryan, like other proponents, argues that premium support would provide seniors “more direct control over health care decisions” while saving Washington money. But critics like [AARP's John] Rother say that converting Medicare into a voucher would increase costs for all beneficiaries and over time force less-affluent seniors to accept lower-quality care. “It is a very dangerous idea,” he says.

And why would Paul Ryan propose such a “dangerous idea”?  Because it’s only with severe cuts to Medicare spending that he could keep taxes as a share of GDP at the 40-year historical average (deemed somewhat “magical” by the GOP) of 18 percent.  See for yourself; here’s a chart of the effect of the GOP alternative budget on long-term federal spending provided by Paul Ryan himself, in his op-ed in the Wall Street Journal (published on 4/1/09):

ryan-gop-alternative-from-wsj-article-april09

See where the red line ends, at around 18 percent of GDP?  See how big that gap is between spending under the blue-line Democratic budgets (keeping Medicare at status quo) and spending under the red-line GOP alternative budget?  You see, “keeping taxes low” is a far greater priority for Republicans than is “protecting Medicare”–or certainly Medicare “as we know it.”

And as Bruce Bartlett wrote in an email this morning (quoted with his permission), whatever it is the Republicans really want to do about Medicare, they’re certainly not fessing up to it with the American public.  Either they want to cut Medicare (a lot), or they don’t (and I think they do)–or as Bruce put it (my emphasis added):

We see all these demonstrators protesting Obama’s health care plan and the right wingers are eating it up. But most of these protesters are seniors upset about the extremely modest Medicare cuts that Obama wants to finance universal coverage.  And these cuts are just a drop in the bucket compared to what would be necessary to keep Medicare spending from rising as a share of GDP, which is what would be required to prevent the necessity of raising taxes.  Can you imagine how big the protests would be if Congress really tried to cut Medicare?

And if the Republicans don’t want to cut Medicare by a lot (i.e., if they’re now saying “never mind” on the Ryan alternative budget), then the Republicans (yes, even the Republicans) will  have to acknowledge that taxes will have to come up.  Again from Bruce’s email:

I think it would have been better for Obama to have financed his health plan with some sort of dedicated tax—VAT, payroll tax, whatever.  If people didn’t want health reform enough to pay the tax then maybe it wasn’t something worth doing. Keep in mind that people will pay higher taxes for something they really want. Social Security was enacted in the middle of the Great Depression and included new taxes on a vast number of people who had never paid a penny of income taxes in their lives.  Moreover, benefits weren’t paid out for several years, so in the sort run it was a pure tax increase with no offsetting benefit.  But FDR sold it.

So I guess President Obama will have to “sell” his vision for health care reform with conviction and honest advertising, and Congress and the American people will have to “buy” it–or else the President’s efforts will turn into, not a hypocrisy, but at least somewhat of a failure.

10 Responses to “The Hypocrisy of the GOP’s New-Found Love for Medicare “As We Know It””

  1. comment number 1 by: SteveinCH

    Couldn’t agree more that the Republicans are being hypocrites or trying to have it both ways on health care. I had more respect for the position prior to the Medicare Bill or Rights or whatever the heck its called. By the way, can we stop calling things Bills of Rights. It cheapens the real and original one in my opinion.

    However, the parenthetical mention that the Obama administration genuinely wants to be fiscally responsible is pretty hard for me to square with the blue line in the Ryan chart above. My suspicion is that the administration is not particularly interested in fiscal responsibility if, by that, one means limiting the scope of government by the willingness of the citizens to pay.

    I personally see no willingness on the part of the administration to come to grip with the costs of its plans for the future. I’m not saying that the Republicans are any better on this front but I don’t think it fair to hold the administration blameless on this.

    Politicians, by nature, tend to be hypocrites because they are trying to appeal to a wide range of people with different views. When they are forced to say something to multiple groups with different points of view, they tend to fudge or fib (or say things they don’t believe in, by omission or comission).

    Having said that, the thrust of the post is right on…the Republicans are not the defenders of Medicare and probably shouldn’t pretend to be…they will only disappoint in the long run. That said, we cannot afford Medicare as currently constructed without structural changes in our tax regime.

  2. comment number 2 by: Brooks

    Diane,

    Re: They’re sincerely convinced of the importance of fiscal responsibility and the need to both “bend the health cost curve” over the longer run and offset the cost of their proposal over the first ten years. And they’ve offered up a way they think they can honor all those goals.

    They have? Really?

    First, it’s possible, but not clear to me that they have offered anything that they contend (even leaving aside the question of sincerity) will lower projected long-term federal spending on healthcare. And I think an important distinction sometimes gets lost in the phrase “bending the curve”. For a given “reform” package, there is (1) immediate (or nearly immediate) impact on the base of federal spending on healthcare (which would be increased substantially by expanding federal coverage to 47 million more people), (2) impact on the growth rate from that base (the ongoing slope and shape of the curve), both of which interact to produce what matters, (3) projected federal healthcare spending over the long term. Component #1 shifts that spending curve up (or if you prefer, causes an immediate or short-term rapid increase followed by the ongoing growth rate as the slope), so even if the long-term curve is “bent” downward (i.e., lower slope), it could still mean higher spending due to that earlier upward shift of the curve. Obviously, if something reduces the ongoing, long-term growth rate, then even if it causes an initial increase, it’s just a matter of time before it results in lower spending vs. without that factor, but whether this occurs in 10 or 20 or 50 years is a function of the particular assumptions (how much added to the base and how much reduction in ongoing growth rate). Also, this obviously assumes a lower ongoing growth rate at some point resulting from the “reform” package, which, while certainly plausible (due to the measures that may produce efficiency gains), is not a given, since increasing expansion of coverage increases aggregate demand for healthcare, which puts upward pressure on prices.

    Does the Obama administration (or anyone) have long-term projections showing that the “reform” they envision (e.g., one of the current bills) would eventually reduce federal spending on healthcare vs. continuation of the status quo? If so, and assuming that they would concede that spending would increase over the short/medium-term due to that upward shift in the base, how many years out do the spending lines intersect, with “reform” reducing spending vs. the status quo projection, and do the effects (initially higher spending, eventually lower spending) over time work out favorably in NPV terms, including the direct and indirect cost of additional debt throughout the “higher spending” period and the relative degrees of certainty of the spending-increasing components vs. the eventual spending-decreasing components in out years? If not, then as I’ve said before, their selling this “reform” as part of the solution to the problem of too much projected spending is like telling you you’ll lose weight by eating ten Hershey Bars right now because the caffeine in them will increase your metabolism (even though consuming the Hershey Bars will actually cause you to consume more calories than the incremental number you’ll burn).

    Second, even if the Obama Administration does have such a projection, and even if the eventual reduction in spending (vs. status quo projection) is significant enough and comes soon enough to be a net plus in NPV terms (two big “ifs”), they are still selling “reform” as a package largely with the rationale of reducing federal spending on healthcare (although usually implied in more deliberately vague language), even though the core of this “reform” is the expansion of coverage which (presumably) increases federal spending even over the long term, and unless their argument is that the long-term spending projections would actually be lower with the expansion of coverage than without it, their argument for the package as a whole (rather than just for the cost-containment measures without the expansion of coverage) resembles the following dialogue:

    Obama: We aren’t getting any Vitamin C in our diet. On our current course, we’ll get scurvy. We need to start eating a breakfast every day of bacon, sausages and orange juice.

    Citizen X: But eating bacon and sausages every day will be bad for our health (we’re already obese and have dangerously high cholesterol). Why do we need to eat the bacon and sausages every day?

    Obama: Did you not hear me?? We aren’t getting any Vitamin C and we’re going to get scurvy on our current course! The status quo is unacceptable! We need to have this bacon, sausages and orange juice breakfast every day.

  3. comment number 3 by: economistmom

    Brooks: I sincerely believe that the Administration understands we need to go on that “orange juice” diet–withOUT the bacon and sausages. They are “book smart” about that diet, even if they have a hard time carrying out the diet in practice because it requires telling everyone that they’ll have to give up the bacon and sausages, especially with Congress (both sides of the aisle) fighting over who can offer more bacon and sausages (or claims of the OTHER side trying to take away the bacon and sausages). Universal coverage doesn’t have to mean we’re adding “fat” to the diet–the analogy might be that the Administration views the increased coverage as like adding yoga classes to the mix (not just trimming the fat from the diet) OR letting more people drink the healthy orange juice, as I think the hope is that it would make preventative care available to more Americans, which is cheaper than treating the diseases that occur from neglect. The problem is that the Administration has a hard time completely leveling with the American public that we do have to cut out the bacon and sausages from our diet, even as we let more people “drink the orange juice.” (And note I did NOT say “drink the kool-aid”…) ;)

  4. comment number 4 by: SteveinCH

    I’m with Brooks on this one. I only know what I read and hear in the public domain, so I will admit it is possible that the administration is saying things in private that they won’t say in public but my objections are largely the same as his.

    1. The coverage of an additional X million Americans will not be without cost, not will the offering of support to purchase insurance up to 300 or 400 percent of the poverty level come without cost. This will tend to shift the curve upward for total health costs and dramatically shift it upward with regard to Federal health outlays. Nowhere does the admininstration own up to this simple fact. Note, in making this statement, I’m roughly assuming that increased usage of healthcare (through subisdies) will largely offset the benefit of more preventative care and lower cost care options (e.g., internists vs. emergency rooms). I don’t know this to be the case but, then again, I don’t think anyone else knows what the net effect will be.

    2. I’ve seen nothing beyond the setting up of a commission (that Congress probably will not give binding power to) to suggest that the long term curve of health spending is likely to be bent downward. To the contrary, I think it far more likely that it will bend upward as more and more things are added to the mandatory coverage of any insurance (to participate in the exchange as it were) driving costs upward. If we imagined *shudder* that the Federal minimum would be any thing that is in any state (not an unreasonable assumption over time), this will have the tendency to bend the curve upward as greater usage of these new minimum services increases as the price of these same services declines. You may argue this is a good thing, but it is not a thing without cost.

    In my view then the curve is likely to shift upward and steepen in slope. This is almost assuredly true for Federal spending on health care and, in my view, largely true for total spending.

    Having said this, the total spending argument is a fallacious one. What business is it of the government how much of our money we choose to spend on health care. I find the whole discussion that goes health spending is 20 percent today and it will be 40 percent at sometime in the future specious and irrelevant. It’s specious because it’s unlikely to happen. Eventually that’s the argument that says we will spend more than 100 percent of GDP on health care, not very likely. It’s also irrelevant because much of our health spending is a matter individual choice (directly or indirectly, e.g., by choosing an employer).

    Perhaps you are right about what the administration understands. From where I sit, it’s entirely unclear that they understand it. Their faith in government’s ability to maintain spending discipline in a highly complex area of great public emotion seems the height of ivory tower understanding over real world insight.

    If they wanted to convince me, they would have to write very restrictive cost metrics into the bill and describe how they would reduce the rate of growth of spending (e.g., through rationing, lower payments or whatever). As long as government has a short-term limitless checkbook, it’s hard to trust them with something as expensive and inflationary as health care if one of the fundamental rationales is cost containment.

  5. comment number 5 by: Brooks

    Diane,

    ok, so if we’re doing the Bidalasana cat stretch while eating sausages from a trough…

    Let’s clarify our proliferating metaphors.

    My “bacon and sausages” refer to the expansion of federal health insurance coverage. Presumably you agree that the Administration is pursuing a very large expansion of federal coverage and that it is in the current bills and is at the heart of any “reform” as envisioned and articulated by Obama. Now, unless they are making the argument (which would be dubious) that long-term federal spending will somehow be lower with this expansion of coverage than without it (either under the scenario of continuation of the status quo or under the scenario of implementing all the cost containment measures of “reform” without expansion of coverage), they they are packing together two elements, (1) cost-containment measures (the orange juice) and (2) spending-increasing expansion of coverage (the bacon and sausages), and they are selling this package of both elements as a solution to our projected spending problem. And a rational response to such a pitch is to ask what my Citizen X asks, which is essentially “If we have a threat to our health and we can get a solution (orange juice) without also getting something that has an adverse effect on our health (the bacon and sausages), why are you saying we need it all to address that health threat? Why not just drink the orange juice and forgo the bacon and sausages, unless there is some justification for eating the latter even though it makes the stated problem worse?

    The “stated problem” above is excessive projected spending, and the possible justification is humanitarian — wanting the uninsured to get better healthcare and/or to avoid economic hardship from getting healthcare. Certainly humanitarian arguments can be made for the expansion of coverage (although to apply a rational moral framework, one has to consider the harm to others that doing so will cause, given that exacerbating our long-term fiscal imbalance means eventually imposing greater sacrifices, probably including taking measures that reduce the quality of healthcare for a very large portion of Americans beyond what we’d have to do without the cost of expansion of coverage — and that’s why it’s not irrational for people to see a trade-off between providing universal coverage now and stricter rationing of federally covered healthcare eventually*). My point is just that the Administration selling the entire package, with the costly expansion of coverage at the heart of it, as something we need to reduce projected federal spending on healthcare resembles my “bacon” dialogue.

    Re: I think the hope is that it would make preventative care available to more Americans, which is cheaper than treating the diseases that occur from neglect.

    First, let’s keep in mind the distinction between total (public and private) healthcare spending vs. federal spending. Yes, there is, in effect, cost-shifting by providers to the insured for uncollectable charges to the uninsured, but only some of that shift impacts the federally-insured — mainly Medicare and Medicaid — (or even more broadly, publicly-insured at any level of government), whereas all the cost of expanded federal coverage is a federal expense. Also, insured people consumer more healthcare than uninsured people, so that means the newly insured will increase their consumption of healthcare, further tipping that balance toward a net increase in federal healthcare spending, and also increasing aggregate demand for healthcare and putting upward pressure on prices.

    Second, the premise itself is invalid. Prevention programs generally do not reduce costs. Sure, it’s cheaper to prevent some health problem or catch early than to treat it later, but obviously many receiving the preventive care do not have that particular problem and will not get it even without a particular form of preventive care (i.e., the preventive care is largely wasted on most people). Of course, it’s possible for preventive care to be sufficiently targeted to produce net savings, but apparently, in practice, preventive programs generally don’t. See http://blogs.abcnews.com/politicalpunch/2009/08/congressional-budget-expert-says-preventive-care-will-raise-not-cut-costs.html and http://cboblog.cbo.gov/?p=345 In fact, even “wellness services” that produce lifestyle changes that improve health like reduction of obesity and smoking cessation don’t reduce long-term federal spending, because healthier people live longer and thus receive more Social Security and Medicare benefits, etc. (I know that sounds cold, but I’m just talking about net effect on spending, not about what’s desirable, all things considered) See http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/97-1053_E.pdf and http://www.nber.org/papers/w4891 The research on obesity that I’ve seen reaches the same conclusion (I don’t have links handy).

    As for the “bacon” to which you’re referring, I’m not sure what it represents in your comment (the somewhat beneficial healthcare that will be cut from government health coverage? other spending?), and I’m not sure what the “yoga” represents (public option? or just including another segment among the ranks of the insured?)

    * As Eugene Robinson said:
    I’m a true believer. It’s scandalous and immoral that the richest, most powerful nation on Earth callously ignores the fact that 47 million Americans lack health insurance…But reform is being sold not just as a moral obligation but also as a way to control rising health-care costs. That should have been a separate discussion. It is not illogical for skeptics to suspect that if millions of people are going to be newly covered by health insurance, either costs are going to skyrocket or services are going to be curtailed. http://www.washingtonpost.com/wp-dyn/content/article/2009/08/10/AR2009081002455.html

  6. comment number 6 by: Brooks

    Hot off the (Washington Post) presses, here’s an update on my point regarding preventive care in my prior comment. Discussion of new study: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103854.html

  7. comment number 7 by: murf

    “They’re sincerely convinced of the importance of fiscal responsibility.”

    Laughable.

  8. comment number 8 by: Underwriterguy

    Has anyone estimated the impact of plan design mandates on cost. My understanding of the proposed plan is that it will be equivalent to FEHBP, making sure not to exclude any current state mandated benefit. All those currently uninsured will get this benefit and all those currently insured with a less rich benefit will have to convert to the richer plan over time (5 years?).

  9. comment number 9 by: Brooks

    I should amend my earlier reference to “expanding federal coverage to 47 million more people”. Presumably achieving universal coverage does not mean that all the currently uninsured will receive 100% federal coverage or subsidies. Presumably some will at least partially fund the cost of their coverage. I don’t know what the breakouts are projected. But my point and my questions regarding the expansion of partially/completely federally subsidized coverage still apply.

  10. comment number 10 by: Brooks

    Also, I realize that some of the intended cost-saving elements in some versions of “reform” interact with expansion of federal coverage and would be less effective (or perhaps even impossible) without it. But here, too, my point and questions still apply.