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One key political selling point of Medicare-for-all is that Medicare (the existing program for senior citizens) is well-known and well-liked. But Republicans are increasingly looking to jiujitsu Medicare’s popularity. They are arguing that Medicare-for-all will come at the expense of Medicare for those who already have it, and there’s some reason to believe it will work.
Florida Gov. Rick Scott, for example, who won two terms statewide despite having run a business that perpetrated one of the largest Medicare frauds in history, is now running for Senate as a defender of Medicare against the evils of socialism.
If you want to protect Medicare, vote Republican. If you want a socialist experiment with Medicare, by all means vote Democrat.
— Rick Scott (@ScottforFlorida) September 6, 2018
President Trump, rallying last week in Indiana, put his own typical spin on the argument by lying directly about Democrats’ proposals rather than vaguely insinuating something false.
Trump: "They want to raid Medicare to pay for socialism." pic.twitter.com/fo43oziAmU
— Josh Marshall (@joshtpm) August 31, 2018
So it’s worth being clear.
There is no Democratic proposal to cut Medicare to pay for anything; the Medicare-for-all proposals that exist in Congress would actually make Medicare benefits more generous, not less; and the vast majority of Republicans currently serving in Congress have voted in the recent past to phase out Medicare and replace it with a less generous private voucher scheme.
Nonetheless, over time, elderly Americans have become increasingly hostile to redistribution precisely because they fear it will come at the expense of the existing welfare state for the elderly, and Republicans have become increasingly reliant on old people’s votes to win elections. So this flashpoint could very much be the future of American politics.
Left-wing Democrats want to make Medicare more generous
An interesting and sometimes missed quirk of internecine Democratic Party health care debates is that the main Medicare-for-all bills — Keith Ellison’s Expanded and Improved Medicare for All Act, Bernie Sanders’s somewhat different Medicare for All Act, and the somewhat more incremental Medicare Extra for All plan from the Center for American Progress — all give patients a benefits package that’s somewhat different from Medicare as we know it today.
That’s largely because Medicare is actually a little bit stingy compared to private health insurance, with more affluent seniors often supplementing it with so-called “Medigap” plans and poorer ones using Medicaid to accomplish the same goal.
Democrats’ plans address this by making Medicare cover a lot more of existing patient costs, expanding the range of services it covers, and opening up these benefits to more seniors.
On its face, at any rate, Democrats are offering senior citizens a more generous package of benefits. But many elderly people already enjoy comprehensive benefits, and so they fear that any further efforts at economic redistribution will come at their expense.
Old people fear redistribution will threaten Medicare
In an important 2015 paper, Vivenkian Ashok, Ilyana Kuziemko, and Ebonya Washington investigate the question of why public support for economic redistribution has not risen since 1970 despite the large increase in economic inequality.
They show that the overall flat levels of support for redistribution actually mask significant shifts among different subgroups. In particular, African Americans and the elderly have become substantially less supportive of redistribution, while non-elderly whites have become moderately more supportive. Looking more precisely at African Americans, the biggest driver turns out to be a decline in support for race-specific modes of redistribution. For senior citizens, however, the biggest issue is that the elderly “have grown increasingly opposed to government provision of health insurance.”
The authors posit that “older Americans worry that redistribution will come at their expense, in particular via cuts to Medicare.”
This does not factually describe the structure of current Medicare-for-all proposals, though it arguably does describe the structure of the Affordable Care Act, which did reduce payment rates for some Medicare sub-programs — though this was supposed to be designed in a way that wouldn’t harm patients.
A larger question about the impact of Medicare-for-all on existing Medicare beneficiaries, however, concerns the impact on health care providers. The Democratic proposals don’t contain any mechanism that would conjure up additional physicians or hospital beds, but would increase the utilization of health care services by non-elderly patients. Thus it’s at least plausible that elderly people currently covered by Medicare would find it harder to secure appointments.
On the other hand, it’s worth noting that the actual GOP agenda is to substantially cut programs benefitting the elderly.
Republicans want to cut Medicare
When George W. Bush was president, he tried — with the enthusiastic support of then-Rep. Mike Pence — to phase out Social Security and replace it with a system of privatized investment accounts.
That proved to be toxically unpopular and contributed to his political unraveling, so when Republicans made their comeback after the 2010 elections, they stopped talking about Social Security cuts. Instead, under the leadership of not-yet-speaker Paul Ryan, they pioneered a plan to phase out Medicare and replace it with a system of less generous vouchers to buy private health insurance. This also proved to be very unpopular and after 2012, Republicans largely stopped talking about it too.
One of Trump’s signature insights during his 2016 primary campaign was that instead of shuffling, embarrassed, away from the issue of Social Security and Medicare, he could state his loud and proud opposition to cutting programs for the elderly. That helped him win the nomination and the presidency.
But note that pre-Trump Republicans weren’t talking about cutting these programs just for fun. The issue is that because of population aging and structurally rising health care costs, both Social Security and Medicare spending are steadily rising as a share of GDP. At the same time, Republicans want to spend more rather than less on the military and immigration enforcement. And they want to cut taxes. There simply isn’t nearly enough in the rest of the budget to make the math work.
That’s why Trump budget director Mick Mulvaney told Politico’s Michael Grunwald that “he plans to keep pressing for Medicare and Social Security retirement reforms, even if Trump keeps shooting him down” and why Rep. Mark Meadows (R-NC), a key Trump ally in the House, still says that “Social Security, Medicare and Medicaid must be at the center of any serious proposal to return spending to sustainable levels.”
For now, Trump has threaded the needle by simply not caring that the numbers don’t add up. The budget deficit has exploded on his watch, and given the background economic conditions, that’s been totally benign. Interest rates and inflation have both been low by historical standards, and since business leaders only pretend to care about the deficit per se, when a Democrat is president, there’s been no problem.
But much of this fiscal running room represents the legacy of the Great Recession of 2007-’08. By now, the economy has recovered enough that while inflation is by no means out of control, it’s not unusually low either. The Federal Reserve is raising short-term interest rates as the labor market heals, and the interest on longer-term debt is going up too.
There’s no immediate fiscal crisis, but the trajectory of rising spending and flat or falling taxes isn’t indefinitely sustainable. Both possible fixes — tax increases or entitlement cuts — are politically dicey, but Democrats at least aren’t marketing themselves as the party of low taxes. Republicans, by contrast, have hit on “save Medicare” as the key argument against expanding health insurance coverage, even as their own ideological priorities are inevitably going to force them to cut Medicare if they stay in power.
