The new plans for Walkercare and Marcocare were released earlier this week. While they contain significant differences that will be discussed in a subsequent post, they are both in fundamental agreement with the House Republican budget in their treatment of Medicare and Medicaid. It is fair to say, therefore, that with the exception of a few outliers, there is a GOP consensus on these programs.
1. Medicare: While the GOP clearly plans to cut and privatize Medicare, it is important to recognize that these two concepts are not the same, and must be analyzed separately. In other words, it is perfectly possible to privatize without cutting, and it is similarly possible to cut without privatizing.
Privatization is a powerful ideological issue for the GOP, which tends to view it as an end in itself regardless of its practical consequences. From my perspective, there is no ideological reason either to support or oppose privatization; the only important issue is which approach will provide more value to the public.
There are two conflicting models at work here. The prevailing Medicare model assumes that the best way to control costs is to create a non-profit consumer cartel with as much bargaining power as possible. The basis for this approach is the innumerable problems with the workings of the market in health care (local monopolies, lack of price transparency, imbalance of knowledge between consumers and providers, etc.) The GOP takes the position that the market for health care is, or ought to be, little different than the market for other goods and services, and that the best way to hold down costs is through private sector competition.
The outcome of this debate should be determined by evidence, not ideology. All of the evidence I have seen, both domestically and abroad, indicates that costs are best controlled by consumer cartels operated by governments. There is, therefore, no good reason to privatize.
As to cuts, the philosophy is that cost increases have been driven by the overconsumption of health care services, and that, by forcing consumers to have more “skin in the game,” excessive consumption will stop. The problem here is that every study I have seen indicates that the real discrepancy between health care costs in our country and abroad is based, not on different consumption patterns, but on huge differences in unit prices. GOP Medicare cuts, therefore, will only serve to shift costs from the government to individual consumers; they will not result in meaningful reductions in unit costs.
2. Medicaid: The idea of block grants is not, in and of itself, harmful. The key questions are:
Do the cost formulas built into the block grant program adequately address population growth, medical inflation, and economic downturns?
Can state governments dominated by Reactionaries in whose view many Medicaid beneficiaries are not “real Americans” be trusted to use the program’s funds for their intended purposes, as opposed to, say, tax cuts?
Applying these tests to the GOP plan, the answer to both questions is clearly no. The GOP plan is intended, not to improve value, but to reduce benefits to people who do not vote Republican in order to provide money for tax cuts for their constituents.