Compromising On Medicare Doesn't Make Sense Unless It Strengthens Obamacare

A blog about business and economics.
Dec. 8 2012 10:23 AM

Compromising On Medicare Doesn't Make Sense Unless It Strengthens Obamacare

Raising the age at which people become eligible for Medicare benefits is a bad idea. Nonetheless, in the course of political life you sometimes need to sign on to a bad idea to advance other objectives. So as far as that goes, I agree with Jonathan Chait that it would be foolish to categorically rule this out and think there's no need for the ritual scourging. But it really does depend on what the deal is! And I don't think the deal Ezra Klein sketches out in which Obama agrees to a higher Medicare eligibility age, and in exchange Republicans agree to a hybrid rate-hike deduction-cap strategy for raising tax revenue makes any sense and I don't think it will be made.

The only logic to there being any acceptability to raising the eligibility age, after all, is the idea that the Affordable Care Act framework is an acceptable alternative to Medicare coverage.


Now people will disagree about whether or not that's the case, but we can all see why the Obama administration would be inclined to think that it is the case. The probablem is that the Affordable Care Act framework is something that's still facing massive resistance from the Republican Party. The Speaker of the House has pledged to use every tool at his disposal to repeal it. A very large share of states, initially at least, are not going to agree to the Medicaid expansion provisions that are necessary to achieve the ACA coverage goals. And virtually every Republican governor in the country is refusing to set up a state-run health insurance exchange, and leading voices on the right think there are a variety of legal and political technicalities they can still exploit to prevent its implementation.

Under the circumstances, denying people Medicare eligibility would constitute a substantial step backwards from Obama's signature domestic policy achievement. And, indeed, by raising the cost of exchange premiums it would make ACA implementation even harder. Those are not concessions that you make in exchange for tax revenue. After all, what is the revenue for if not the construction and stabilization of the welfare state?

In my piece I propose a different kind of swap. Something like raising the Medicare eligibility age in exchange for the creation of a strong public option or a Medicare buy-in of some kind. In other words, a spending reduction measure that conservatives like in exchange for a spending reduction measure that liberals like. As far as I know, nothing along those lines is under discussion. But that's a deal that would let both parties walk away from the table feeling like they'd achieved something. Conservatives would have reduced the fiscal cost of the welfare state, while progressives would have strengthened the underpinnings of the Affordable Care Act. You could imagine plenty of other possibilities. But the baseline for any of them would have to be that the ACA is going to be there to pick up the pieces. What are low-income seniors in the South supposed to do when Medicaid isn't expanded to cover them, they're not eligible for subsidies, and now Medicare's been yanked out from under them? Turning around and saying in response "at least rich people are paying more taxes!" doesn't cut it.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



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