The Medicare saga (continued)

Reading Austin’s terrific posts on premium support, I’m remorseful that I aimed for satire (“It’s a floor wax. No it’s a dessert topping! The Romney-Ryan Medicare Plan”) rather than plain substance in discussing this debate. Little by little, the Romney team is being forced to repudiate the draconian pure voucher framework embodied in prior Ryan proposals and his fiscal year 2013 House Republican budget plan. Romney’s proposed premium support would be based on the second-lowest competitive bidder to offer a package of Medicare services. If these bids rise at faster than the general rate of inflation or GDP growth, Medicare would still pay the posited amount.

Austin rightly notes that this is a move in the right direction. A premium support system whose vouchers are allowed to rise at the true cost of medical inflation is much better and safer than one specifically designed to shift costs and risks onto seniors by mechanically pegging voucher growth to some arbitrary target unmoored from the true cost of care.

Even with the backpedaling, Romney still proposes a basic change to what Medicare provides. includes a short policy memo and an 899-word Medicare link to clarify some  50,000-foot details. The campaign website explains that “traditional Medicare would still be offered.” However, “if it costs the government more to provide that service than it costs private plans to offer their versions, then the premiums charged by the government will have to be higher and seniors will have to pay the difference.” That’s a real change.

There’s a lot of fine print to work out, too. The Romney campaign’s Medicare plan is still largely vaporware at this point. The contrast to the Democratic plans developed between 2006 and 2008 is telling. Before the Obama presidency, Democratic constituencies and candidates produced highly wonked-out white papers and proposals that were poured over and vetted by leading experts. Hillary Clinton, Barack Obama, and John Edwards produced broadly similar plans with real detail and political backing that formed the core of what became the Affordable Care Act.

Republicans really haven’t done the same hard political and policy work in their Medicare plan. To the extent that they have, this work was done on behalf of an emphatically conservative agenda expressed by the language of the Ryan budgets and the 2012 GOP platform. These really do support Medicare’s conversion over time to a traditional defined-contribution voucher.

Within a more substantive political world, the Romney team would issue a detailed proposal akin to Max Baucus’s white paper on health care reform that lays out some of the critical details. As with their tax proposals, they have made a strategic decision not to do so.

Some obvious and bad reasons undergird this decision. Most prominently, their numbers don’t add up. On the tax side, independent experts make plain that another round of supply-side measures will produce some combination of increased deficits and higher tax incidence for most Americans. Regarding Medicare, one cannot trumpet the need for “adult conversation” about entitlements and then propose a program whose central cost-control feature is an unproven appeal to payer competition.

Competition promoted by premium support may indeed prove helpful. I’m sure that competitive bidders will find some innovations that traditional fee-for-service Medicare has missed. No one really knows. Experience with Medicare Advantage, not to mention cross-national comparisons, provides little evidence that such market approaches fundamentally bend the cost curve. Romney has an especially weak argument when he simultaneously opposes the very idea of Medicare provider cuts embodied in health reform.

On another level, I have some ironic sympathy for Republicans’ desire to play Medicare close to the vest. The details of any workable and disciplined Medicare plan are messy and sometimes unpopular. (I am much more worried about proposals to bloc-grant and cut federal contributions to Medicaid. It says much about American politics that these Medicaid proposals were barely mentioned in Tampa.)

Three-plus years into the Obamacare debate, Republican strategists also know the death-panel/socialized medicine demagogic potential always present in health policy. Too much rhetoric this campaign season panders to an absolutist mindset held by an influential subgroup of seniors, some of whom seem to regard social insurance as a zero-sum game, rejecting even reasonable modifications to balance Medicare spending with efforts to address other social needs.

Campaign strategists might reasonably worry: Bloody instructions, once taught, return to plague the inventor.


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