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Opinion: Columnists

Campaign 2012 and the truth about Medicare

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Apart from the so-called war on women, the most contentious issue in the current presidential elections is the fight over which party will truly preserve Medicare, the program that subsidizes health care for the elderly.

Speaking at the Republican National Convention, Ryan explained that in order to pass the president's health care law, known as Obamacare, Democrats "needed hundreds of billions more. So, they just took it all away from Medicare. $716 billion, funneled out of Medicare by President Obama. ... A Romney-Ryan administration will protect and strengthen Medicare, for my mom's generation, for my generation, and for my kids and yours."

When did the Republicans become the party of Medicare? At least since Ronald Reagan, who had railed against the program in the early '60s, calling it "socialized medicine," embraced it during his presidency. And if a few Republicans opposed the creation of Medicare Part D in 2003, the vast majority of them voted for it and President George W. Bush signed it into law. At the time, it was the biggest expansion of an entitlement program since Lyndon B. Johnson's presidency.

What seems to be different today is the GOP's willingness to publicly support Medicare -- a move that is supposed to help them gain some votes in November. For instance, Whit Ayres, a GOP pollster, recently explained to Washington Examiner's Byron York that "by targeting Obamacare's Medicare cuts, and by presenting the Romney-Ryan plan as an effort to "preserve and protect Medicare for current recipients and future generations," Republicans can essentially tie the score between those who side with the GOP and those who side with Democrats."

Unfortunately, for anyone who is worried about the financial sustainability of the United States, this strategy is disheartening. Our debt has more than doubled in the last few years, and it is projected to continue deteriorating quickly. And Medicare is largely to blame for it. Here is why: First, the number of enrollees has grown quickly and will continue to grow in the future. The most recent data from the 2012 Trustees Report show that between 1975 and 2011, the number of Medicare enrollees doubled to 48 million. Based on the same report, by 2040, Medicare is projected to cover about 88 million people.

Second, the Trustees Report shows that the real cost per enrollee has quintupled since 1975 and will double by 2040. Third, Medicare already pays out more than it takes in and cannot exist without the constant use of budget gimmicks to make it look solvent on paper only. Currently, the payroll taxes, along with dedicated funding sources such as premium payments, state transfers and taxes on benefits, pay for only half of the program's cost.

The bottom line is Medicare spending isn't sustainable and must be reformed. Lawmakers have several options: They can reduce the number of enrollees in the program, they can reduce the supply of it or increase premiums and taxes, or they can do a mix of both. Better yet, they could switch from the current entitlement system where everyone gets money from the government above and beyond their contribution or their needs to a true safety net for the neediest in society.

Ryan seemed to leave these options on the table last night when he said, "Ladies and gentlemen, our nation needs this debate. We want this debate." However, the more he talks about the $700 billion cuts, the more he solidifies the GOP as the party of Medicare.

Examiner Contributor Veronique de Rugy is a senior research fellow of the Mercatus Center at George Mason University.

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