Clinton's Medicare Cuts
Clinton's Medicare Cuts
The conventional wisdom debunked.
Oct. 25 1996 3:30 AM

Clinton's Medicare Cuts

Bill in '93 = Bob in '96.

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Both parties used basically the same regulatory machinery to try to make their plans work in the market without creating a huge "adverse selection" problem--healthier seniors opting into lower-cost plans. The Republicans' machinery, in fact, was borrowed almost verbatim from Clinton's plan--which, in a double twist, the GOP had previously attacked as unworkable.


Let Medicare Wither on the Vine. Clinton twice said that Medicare would "wither on the vine" under Republican reforms. The reference is to a comment by House Speaker Newt Gingrich, who said that the GOP wanted the Medicare bureaucracy to wither on the vine, as seniors opted for the private plans. But the quote has been misused by Democrats ever since.

In any case, Clinton also forecast the decline of the Medicare bureaucracy. New retirees under his Health Security Act would be able to stick with the plan they had when they worked. The government would pay the premiums instead of the employer. Current retirees could choose a private managed-care plan. According to the Congressional Budget Office, Clinton's plan would have moved nearly 3 million seniors from Medicare into private plans in 1998 alone.

To be fair, the White House wanted to sweeten the Medicare pot at the same time it was making these cuts by adding a prescription-drug benefit.

It has also claimed since that its proposed cuts in Medicare were acceptable because they were in the context of "universal health care reform." But that wasn't the argument it made at the time. Hillary Rodham Clinton told a Senate panel in 1993 that savings in Medicare were easy because "we have too many examples now of how it can be done better at lower costs with the same or better quality, and that's what we're counting on."

John Merline is the Washington bureau chief of Investor's Business Daily.

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