Will seniors kill off health reform?

Gossip, speculation, and scuttlebutt about politics.
June 17 2009 6:53 PM

Will Seniors Kill Health Reform?

The Heritage Foundation borrows from the Democratic playbook.

Click here for a guide to following the health care reform story online.

The various interest groups that stand to lose financially from any meaningful health care reform are starting to clear their throats. The American Medical Association's House of Delegates declines to support a public option and says it will outright oppose any such option that resembles Medicare (i.e., one that has the low premiums and discounted doctor and hospital fees necessary to make health reform affordable). The insurers oppose a public option, too, because at best it will cut into their profit margins and at worst it will put them out of business. Within days of a May 12 "stakeholder" meeting at the White House, the American Hospital Association was "clarifying" its pledge to reduce spending. Now conservative opponents to health reform are trying to win a fourth group to their side: the elderly.

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If you're over 65, you don't really need health care reform, because the government already pays your medical bills through Medicare. Medicare is much cheaper to administer than private health insurance, and it delivers pretty high customer satisfaction (41 percent favorable versus private insurers' 29 percent favorable). Why, then, is President Obama burbling so much about Atul Gawande's New Yorker piece documenting outrageously high Medicare spending in McAllen, Texas? Partly because the regional disparities in Medicare spending likely reflect regional disparities in private-insurance spending, which he'd like to eliminate by imposing "best practices" on doctors and hospitals. Mainly, though, it's because paying for health reform will require the feds to trim Medicare spending—and the cuts will have to be greater to whatever extent Congress and the White House flinch from enacting a robust public option and/or raising taxes.

Enter the conservative Heritage Foundation, which has set up a "rapid response" Web site dedicated to killing off health reform. On June 15 Heritage posted a "fact sheet" titled "Obama's Health Care Reform: What Will It Do To Seniors."  Some of it is the standard right-wing stuff about the supposed superiority of private Medicare Advantage plans (in fact, it's been shown time and again that these plans, created as an alternative to Medicare at the insistence of market fundamentalists, waste taxpayer dollars) and the terrible danger that Medicare will be given the power to negotiate volume discounts for the drugs it pays for (a power withheld by these same market fundamentalists when Medicare created its drug benefit in 2003). To this familiar critique, Heritage has added a new theme: Look out, old timer!Obama wants to cut your Medicare benefits!

Energizing elderly voters through demagogy about government benefit cuts used to be a Democratic vice, but health reform is making it a Republican one. Consider the following pitch:

Medicare savings would largely result from a ratcheting down of existing payment formulas and lowering reimbursements to doctors and hospitals. Cutting reimbursements often encourages medical professionals to increase their volume of services, resulting in higher program costs, undermining the objectives of the original cuts. Cuts in reimbursement also discourage doctors from seeing new Medicare patients.

Rep. Claude Pepper in 1982? Nope. It's the Heritage Foundation in 2009!

Seniors' interests are a bit tricky when it comes to health reform. If the most radical (and most sensible) reform were to be enacted—opening Medicare up to all Americans—that could be helpful to seniors because it would expand the interest group clamoring for more generous government health benefits to include the entire country. The less expansive health reform is, the more seniors will likely be called upon to foot the bill with Medicare cuts. It is therefore very much in Republicans' interests first to emasculate health reform and then to rattle seniors' cages about how much the diminished reform is likely to cost them.

Will it work? According to Stan Greenberg in the July 1 New Republic, it's already working. Greenberg, who was Clinton's pollster during the 1994 Hillarycare debacle, recently asked focus groups the same questions he asked 15 years ago. Now, as then, seniors are wary; indeed, they have less reason to support health reform today, because Obama can no longer offer the inducement of government-funded prescription-drug coverage (which seniors now get through Medicare). According to Greenberg, "Obama has already lost seniors." Only one-third support health reform. Is their opposition sufficient to kill it off?

[Update, June 23: The Obama administration, clearly aware of this political problem, struck a deal  with drugmakers to help close the Medicare "donut hole" wherein seniors who spend more than $2,700 annually on drugs receive no further coverage until they've spent $6,154. (These amounts change from year to year.) The draft House bill  similarly promises  a "phased-in elimination" of the donut hole.]

Timothy Noah is a former Slate staffer. His  book about income inequality is The Great Divergence.

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