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Community Corner

How Will Dent Defend His Medicare Vote?

Congressman performed a "bait and switch" on the program, our columnist argues.

I've been wondering how Congressman Charlie Dent was planning to defend his vote to end Medicare in his reelection campaign next year, so it was interesting to see this quote Mr. Dent gave to Bloomberg News:

Republicans are already preparing their strategy on Medicare, said Rooney, who was among 20 lawmakers who met with Ryan and other Republican leaders the day of Hochul’s election victory to hone their arguments. 

The party can prevail “by playing offense and stating the choice: doing something or doing nothing, which means bankruptcy and cuts in current benefits for current beneficiaries,” said Pennsylvania Republican Representative Charlie Dent.

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This is a remarkable quote on several levels.

On the politics, Mr. Dent ran to the left of John Callahan on Medicare in 2010, blasting the Democrats' Medicare cuts:

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In addition to new taxes and other costs to employers and families, the bill cuts a half-trillion dollars out of Medicare to pay for the new entitlement.

But the Congressman voted for that same half trillion in cuts, which Paul Ryan kept in the Republican budget. Seniors thought they were sending Mr. Dent back to Washington to protect Medicare, but he turned around and voted to privatize the program in order to fund a large new regressive tax cut. It was a classic bait and switch.

So it seems much more likely that Mr. Dent will be spending quite a bit more time playing defense on health care. This seems to be well-understood by Dent's political staff, who did not include the word "Medicare" anywhere on the press release announcing the vote.

On the policy, it is not at all obvious that doing "something" is better than doing nothing if that something is replacing traditional Medicare with vouchers whose value falls further and further behind health care costs.  Doing something isn't better if it would double health care spending relative to current law.

In fact, if Congress goes home for the next 10 years and we just stick to current law, the Congressional Budget Office says there is no Medicare problem.

For instance, Congress could stop passing "doc fix" bills. Former Reagan policy analyst Bruce Barlett and libertarian economist Tyler Cowen have both endorsed this policy. Here's how Mr. Bartlett explained the issue in a recent post at the New York Times Economix blog:

Medicare’s actuaries do not believe their own projections are realistic because they were required to assume that a key provision of current law will take effect as scheduled. This is known as the “sustainable growth rate” (S.G.R.) and involves implementation of a law enacted in 1997, but repeatedly postponed by Republican and Democratic Congresses. It would require a 29.4 percent cut in fees for doctors who treat Medicare patients on Jan. 1, 2012.

 The Medicare actuaries just don’t believe this provision will be allowed to take place because they think Congress will punt the ball once again. Therefore the official estimates of Medicare’s fiscal position are much too optimistic.

The typical argument against doing this is that doctors would stop treating Medicare patients, but that threat doesn't seem credible considering how large a share of the health care market Medicare occupies.

 That's the point that really gets to the heart of the disagreement between Republicans and Democrats over health care. 

 Democrats think the solution to Medicare's financial woes is more Medicare. Medicare's sheer size means it can use its near-monopsony power to negotiate low prices with providers, like how Wal-Mart and Amazon push down their suppliers' prices. It's why Medicare is better at controlling costs than private insurance companies. This is also the concept behind the exchanges in the Affordable Care Act. Bigger risk pools means more bargaining power for consumers against health care providers. 

 Charlie Dent would dissolve consumers' group buying power, and that's why the Congressional Budget Office says this plan will double health care spending for the typical 65-year-old by 2022. By shifting costs from the government to individuals, the Dent plan fragments consumer power in the market, giving pharmaceutical companies, hospitals, doctors and insurance companies more power to raise prices.

Because most consumers aren't doctors, or well-enough informed about medical procedures to haggle with their surgeons, there isn't any way for individuals to impose real market discipline on providers and hold costs down. Charlie Dent's plan reduces the government's deficit, but doesn't do anything to reduce costs for individuals. Worse, it doesn't do anything about the gross inefficiencies that make our health care system so expensive in the first place.

 There's a lot of waste in the system, so it should be possible to cut costs while improving care at the same time. Electronic medical records, comparative effectiveness review, and using Medicare's reimbursement formulas to hold hospitals accountable for quality are all things in the Affordable Care Act that could reduce costs while improving health. 

 The Republican plan doesn't try to improve quality, it just pays less and less for the inferior product we have now. 

Charlie Dent will likely argue in his reelection campaign that the Republican health care plan doesn't actually end Medicare, but that's a distinction without a difference. Medicare is a single-payer program that pays seniors' medical bills. Sending people under 55 out on the individual market with private vouchers that pay for just 32% of the benefits you get under Medicare is not even close to the same thing. 

 While it's far too early to speculate whether this vote will even be a dominant issue in 2012, it will be interesting to see how Mr. Dent eventually decides to explain his evolving views and public positions on Medicare.

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