The Republican Medicare Plan Will Fail Miserably
The first partisan “ovation,” of this year's State of the Union address came only minutes into President Obama’s speech. Its timing was suitable. President Obama’s traditionally optimistic introduction had quickly turned into a campaign for Medicare, which should surprise no one. In recent months, the GOP has made Medicare reform a key part of their deficit negotiations. But what does “reform” mean? Both Obama and and Senator Marco Rubio (R-Fla.), who gave the Republican response, approached the topic with ambiguity, underscoring the immense complexity of the issue.
Neither party questions the need for reshaping the health care system, now a major driver of federal debt. The primary difference is that Republicans want immediate budgetary cuts to the program. Under most GOP proposals, this would take the form of a rise in the eligibility age for Medicare. On the surface, the solution appears to be grounded in logic. Sixty-five has stood as the retirement age since Medicare was enacted in 1965, while American life expectancy has risen from 70 to 78. During the fiscal cliff negotiations in December, House Speaker John Boehner (R-Ohio) suggested shifting the Medicare eligibility age from 65 to 67, hardly an exorbitant proposition. Obama briefly entertained the idea — at least in public — but dismissed the possibility 24 hours before Tuesday’s speech. Thank goodness.
Congressional Republicans, Rubio included, have substituted “reform” for “cut” when discussing Medicare in debates over the fiscal cliff. But make no mistake, cutting Medicare is their only objective. Congressional Budget Office data suggests that a two-year age increase would yield 5% in annual Medicare savings. Another potential bonus includes the increased tax revenue derived from two extra years in the workforce. Unfortunately, neither of these benefits outweigh the proposal’s universal economic consequences.
Life expectancies have indeed increased progressively across all financial and ethnic demographics since 1965, but this does not tell the whole story. A multitude of societal epidemics, including obesity, increasing prescription drug use and yes, an abundance of uninsured Americans, have led to diminishing life expectancies among the least educated. These men and women reach the federal retirement age much closer to death than their more affluent counterparts. Unsurprisingly, this demographic also comprises the poorest portion of our citizenry. There is no doubt that a rise in Medicare’s eligibility age will inflict its greatest damages on blue-collar America, hastening the wealth disparity that continues to plague the United States.
The policy might be justified if it actually saved taxpayer money. This is not the case. For one, the youngest Medicare beneficiaries (those aged 65 to 67) are those who utilize the program the least. Even so, cuts to Medicare will not stop them from going to the hospital. As always, some will be able to pay and others will not. Those costs left uncovered will be shifted to every American with health insurance. This scenario fits nicely into the grander Republican scheme, which seeks to eliminate the so-called “individual mandate” that requires all Americans to purchase health insurance.
Obama and Rubio voiced their support for Medicare irrefutably. “It provided my father the care he needed to battle cancer and ultimately die with dignity,” remarked Rubio in his response, “and it pays for the care my mother receives now.”
Any negative rhetoric risks political repercussions for either party. Republicans in particular cannot afford to lose hold of the elderly vote, particularly as their support from millennials remains weak. The party must begin providing long-term solutions that may require short-term sacrifices from their constituents. They may gain popular support for lessened Medicare eligibility, but their strategy is not sustainable.