Saving Medicare

The political tug-of-war continues

In the end, Medicare's future inevitably comes down to politics rather than policy. Ryan's plan "is just another battle in a 50-year war," says Jonathan Oberlander, professor of social medicine and health policy at the University of North Carolina, Chapel Hill, and a historian of Medicare politics. "It's déjà vu all over again."

Ever since Medicare became law in 1965, Democrats and Republicans have fought ideologically over its design — with liberals favoring it as a government-run social insurance system and conservatives preferring a private insurance alternative.

That's why the GOP stoked opposition among older Americans to President Obama's health care law in 2010, just as the Democrats are now trying to put a match to Ryan's Medicare plan, which also has earned the wrath of a majority of seniors, according to recent polls.

Oberlander says Ryan's plan is the most radical change ever proposed because "it would eviscerate the value of Medicare" by requiring beneficiaries to pick up far more of the cost than they do now. It also would reduce choice by eliminating traditional Medicare as an option for future seniors, he says.

Currently three out of four beneficiaries choose the traditional program — in which they can receive health care from any provider that accepts Medicare patients, anywhere in the country — instead of the local or regional private plans that are offered as alternatives. These other plans, known collectively as Medicare Advantage, were promoted by Republicans during an earlier time in power in the hope that the lower costs and extra benefits they provided would wean beneficiaries away from traditional Medicare — allowing that program to "wither on the vine" in Newt Gingrich's famous phrase.

But the better deals were made possible only by the government paying the plans more for each enrollee than it did for people in the traditional program — and the Democrats, through the new health law, are reducing those excess payments as another way of lowering Medicare's costs.

The ideological divide yawns just as wide among think tanks that study health care issues. While most liberal think tanks say Ryan's plan is too extreme, their conservative counterparts say it doesn't go far enough.

So the philosophical war intensifies, but is unlikely to be resolved before the 2012 elections, if then. "My guess is that we're in for at least a decade of repeated clashes over Medicare," Oberlander says. "This isn't a settled issue."

Marsha Mercer is a freelance writer who covers political and policy issues in Washington. Patricia Barry writes about Medicare for the Bulletin.