The Dems’ Medicare Flip-Flop

Now they’re embracing the GOP reforms they once reviled.

Before last year’s elections, Democrats couldn’t get enough of Medicare. At every turn, they complained that Republicans wanted to decimate the program to pay for tax cuts that would mostly benefit the rich. The White House and friendly interest groups spent millions spreading the word far and wide. These efforts may nearly have cost the GOP control of Congress. They certainly helped keep Bill Clinton in the White House.

Back then, the language was unusually harsh.

“The mask is off those who have argued that their intention is to ‘save’ Medicare,” said Senate Minority Leader Tom Daschle, D-S.D., of the Republicans’ bill. “Their real purpose is to dismantle Medicare.” In a debate with Bob Dole, Clinton, who vetoed the bill, warned that “hundreds of hospitals could close, and people would be hurt badly under the Dole-Gingrich Medicare plan.”

So what does the GOP do for an encore? They introduce essentially the same package of reforms this year–with nearly identical spending cuts and structural changes.

This time around, Democrats are flocking to vote for it. While Democrats have been voicing modest complaints about relatively minor provisions, only three out of 16 voted against the bill in the House Ways and Means Committee, and only two voted nay in the Senate Finance Committee. Last week, the Senate astounded lobbyists for the elderly by recording a 70-30 bipartisan vote in favor of gradually increasing the eligibility age for Medicare from 65 to 67 and requiring better-off recipients to pay more for their coverage. The White House balked at a reform that candid, but it has said that the rest of the package will “help strengthen and modernize Medicare for the 21st Century.”

“Truth of the matter is, we do feel some vindication that we were right on that to begin with,” Senate Majority Leader Trent Lott, R-Miss., said in an interview. “We’re actually doing quite a lot of what we had proposed.”

Democrats claim that this year’s Medicare plan is vastly improved from the last. “This one doesn’t contain $270 billion in spending cuts,” said an aide to Rep. Barbara Kennelly, D-Conn.. Kennelly voted against the last GOP plan, but for this one. “This one was crafted in a pretty bipartisan way.”

H owever the bills were crafted, they are strikingly similar.

Spending cuts are nearly identical. What’s confusing many analysts is that the 1995 GOP reforms covered cuts over seven years, whereas the new plan covers only five years of cuts. While the old bill would have cut spending by more than $200 billion over seven years, its five-year cuts amounted to $119 billion–only $4 billion more than the $115 billion proposed in the new bipartisan bill. Looked at another way, growth in Medicare will climb 6 percent a year under this plan, almost exactly the same as the growth allowed under the dreaded GOP plan from two years ago.

Most of the savings come from cutting payments to Medicare providers–doctors and hospitals. The new plan, for instance, cuts payments to hospitals by a total of $36.5 billion over five years. The old plan: $36.7 billion. Democrats had warned that cuts of that magnitude would force too many hospitals to close. Has that changed? Not according to the American Hospital Association. “The fact of the matter is, you are going to see hospitals close,” said the AHA’s Rick Wade.

Seniors will pay higher premiums. Last time around, the GOP wanted seniors to pay 31.5 percent of Medicare’s physician-insurance program–called Part B–with taxpayers picking up the rest. This time around, the GOP and Clinton agreed to keep it at 25 percent of the program’s cost. But the GOP added a twist. Medicare’s costly Home Health program is shifted over to Part B, and seniors will start paying part of the cost of this program as well. Net result: By the seventh year, monthly premiums under the new plan are indistinguishable from the old one–$82.40 in the new plan vs. $84.60 in the old.

The new plan pretty much lifts the Medicare Plus program from the old bill. The Plus program will let seniors pick from a wide variety of private health plans, including the controversial medical savings account idea. To get Clinton on board, the GOP proposed an MSA demonstration program–capping total MSA enrollees at half a million. Even backers think the cap is all but meaningless, as it would likely take years before that limit is reached.

Punitive damage awards are capped. The language is taken word-for-word from the old bill.

True, there are important differences between the old and new measures. But it’s debatable whether they’re improvements. Last time around, for instance, the GOP included a “fail safe” provision–a guarantee that promised savings would actually materialize. If spending were higher than projected in a given year, provider payments would be cut even deeper to make up the difference. That’s been dropped.