More Liberal Hypocrisy on Entitlements
In the last several days, the New York Times’ Uwe Reinhardt and the Washington Post’s Ezra Klein have both published comments critical of the Rivlin-Ryan plan for entitlement reform, and specifically its plan to transform Medicare into a defined contribution system for prospective retirees under age 55 (read: NOT for current seniors, or those approaching retirement). But neither post fully answers two fundamental questions that any supporter of the health care law – and critic of the Rivlin-Ryan approach – needs to address:
- If competition in insurance markets will work for the under-65 population, why won’t it work for seniors on Medicare? Democrats and their liberal allies are quick to point to the Congressional Budget Office’s analysis that premiums would fall by up to 14 to 20 percent in the individual market, due to administrative efficiencies associated with the new insurance Exchanges and related requirements. (Those same groups are MUCH less willing to admit that individual market premiums would rise on net, due to the new mandated benefits included in the law, but that’s a separate story.) While Republicans may believe that the health law’s Exchanges put too heavy a focus on government intervention and new regulations, many generally agree with the concept that more competition can lower premiums (hence support for cross-state purchasing of insurance). The bigger question though is why liberals who think that creating insurance Exchanges for the under-65 population will save money simultaneously refuse to acknowledge the potential cost savings from a new Medicare Exchange on which all seniors could buy the health care plan that best meets their needs.
- If the Rivlin-Ryan caps on Medicare spending are so bad for seniors, why won’t the EXACT SAME SPENDING CAPS included in the health care law similarly harm seniors? Page two of the CBO analysis of the Rivlin-Ryan plan notes that the defined contribution (again, for those under age 55 in 2011 ONLY) would be increased by “the annual rate of growth in GDP per capita plus one percentage point.” That is the EXACT SAME rate at which Medicare is permitted to grow under Section 3403 of the health care law, which imposes a GDP plus 1% cap on Medicare spending, to be enforced by the new Independent Payment Advisory Board (Language is available at page 432 of this PDF of the law.). It’s therefore ironic that, in expressing his skepticism about the Rivlin-Ryan approach, Reinhardt calls “capping public health spending” as “theoretical” – because that’s exactly what the health care law does.
Of course, Reinhardt himself has publicly written about his support for government-imposed rationing of health care services – federal bureaucrats denying care based on cost grounds – so perhaps he views this possibility as the “solution” that will allow the caps to take hold under the law. But other liberals who think that the Rivlin-Ryan cap on the federal government’s contribution to Medicare will harm seniors should explain exactly how the SAME CAPS included in the health care law won’t similarly harm beneficiaries. (Conversely, Republicans might argue that competition would yield greater efficiencies and savings than the top-down, bureaucrat-centric approach contemplated by the caps included in the new law.)
This is not to endorse the Rivlin-Ryan proposal (or, for that matter, the CBO analysis about how well Exchanges will reduce premiums). It does however point out that many liberal groups publicly attacking spending caps on Medicare when included in a Republican proposal have said precious little about the same spending caps on Medicare included in the Democrat-passed law.