The Medicare battles have returned, and few in Washington are surprised. This time, it is Democrats who accuse Republicans of wanting to cripple the very popular federal health program that covers 64 million elderly and individuals with disabilities. In the past, Republicans have effectively portrayed Democrats as Medicare threats.
Why do politicians use Medicare and Social Security as weapons so frequently? Because electoral history demonstrates that it is effective. In general, the party accused of endangering sacred benefits pays a price; nevertheless, millions of beneficiaries who rely on feuding lawmakers to support the programs stand to lose the most.
As per NPR, Republicans have frequently threatened that they will hold the increase of the federal debt ceiling hostage if Democrats do not negotiate changes to Medicare, Medicaid, and Social Security. In addition to money for the Affordable Care Act and the Children’s Health Insurance Program, these three programs account for approximately half of the federal budget.
The political bomb that detonated during Joe Biden’s State of the Union address had been ticking for weeks. In his speech, Vice President Biden pledged to veto any moves by Republicans to reduce Social Security or Medicare. This was one of three veto threats he issued that evening. During a subsequent trip to Florida, he stated it more emphatically: “I am acquainted with a large number of Republicans whose dream is to slash Social Security and Medicare. Yet, if that is your dream, I am your worst nightmare.”
Top Republicans have distanced themselves from the plans referenced by Biden, including ideas from the House Republican Study Committee and Sen. Rick Scott (R-Fla.) to make Medicare changes or even allow the program to expire if Congress does not vote to continue it.
Senate Minority Leader Mitch McConnell stated on a Kentucky radio program on February 9: “That’s not the Republican plan; it’s Rick Scott’s plan,” citing his opposition to the idea last year. The day before Biden’s veto threat, House Speaker Kevin McCarthy announced, “Cuts to Social Security and Medicare are off the table.”
McConnell and McCarthy appear to be aware of something Rick Scott does not: Politicians who threaten large, popular entitlement programs do so at their peril. Typically, it is Republicans that suffer electorally as a result.
This practice stretches back to at least 1982 when Democrats used the fear of Social Security cuts to win more than two dozen House seats in the first midterm elections under President Ronald Reagan. President Bill Clinton won re-election in 1996 in part by persuading voters that Republicans led by House Speaker Newt Gingrich wanted to privatize Medicare and Social Security.
In 2005, at the start of his second term, President George W. Bush made “partially privatizing” Social Security his main objective. This was universally unpopular. In the subsequent midterm elections, the Democrats reclaimed the House for the first time since 1994.
In 2010, the Republicans regained control of the House by utilizing what they termed “Medicare cuts” in the Affordable Care Act. (These “cuts” were primarily reductions in payments to providers; ACA beneficiaries received additional benefits.)
The Medicare club undoubtedly reached its pinnacle in 2012, when Democrats targeted Paul Ryan’s Medicare privatization proposals as leader of the House Budget Committee and Republican vice president. This debate resulted in a controversial political ad, paid for by the progressive Agenda Project Action Fund and recalled by many in Washington, which depicted a man in a suit and red tie – presumably Ryan – pushing a wheelchair-bound “granny” off a cliff while the words “Is America Beautiful without Medicare?” flashed on the screen.
Medicare’s value as a political weapon undermines any bipartisan efforts to tackle the program’s financial difficulties. The last two times the Medicare Hospital Insurance Trust Fund was this near to insolvency, in the early 1980s and late 1990s, Congress passed bipartisan legislation to save the program.
Even the word “cut” can have political implications. One beneficiary’s Medicare “cut” is another beneficiary’s gain. Lowering payments to medical providers (or, more frequently, limiting the extent of payment increases to doctors and hospitals) may cut premiums for Medicare recipients, whose payments are dependent on the program’s total expenses.
Increasing Medicare beneficiaries’ premiums or cost-sharing benefits all taxpayers who help support the program. Raising accessible benefits is advantageous for doctors, hospitals, and other healthcare providers, as well as for beneficiaries, but it incurs additional expenses for taxpayers. And then some.
There are irreconcilable fundamental conflicts between the parties. Many Republicans want Medicare to transition from a “defined benefit” program, in which beneficiaries are guaranteed a certain set of services and the government pays whatever they cost, to a “defined contribution” program, in which beneficiaries would receive a certain amount of money to finance as much as they can — and would be responsible for the remainder of their medical expenses.
This would transfer the risk of health care inflation from the government to the elderly. And while it would plainly benefit the taxpayer, it would harm both Medicare providers and beneficiaries. But Congress might adopt numerous intermediate measures to at least delay Medicare and Social Security insolvency. Some are more controversial than others (such as increasing the payroll tax that pays Medicare), but none go beyond what previous Congresses have done whenever the programs approached insolvency.
Medicare and Social Security cannot be “fixed” until both sides lay down their arms and begin communicating. But each time a politician reveals their talking lines on “Medicare cuts,” the possibility of a truce diminishes.
