Now it’s my turn to weigh in on the “Lie of the Year,” the gimmick PolitiFact uses to highlight the most egregious misstatements of the past year. This time, though, the fact-checking service stumbled into a fusillade of criticism from such unlikely bedfellows as New York Times liberal columnist Paul Krugman and the conservative Wall Street Journal’s online opinion page. The lie, according to PolitiFact, was the Democrats’ assertion that Republicans voted to end Medicare when the House voted last spring to embrace a voucher plan pushed by Wisconsin congressman Paul Ryan. PolitiFact also argued Democrats overreached by failing to tell the public Ryan’s plan would not force people over fifty-five to leave the traditional Medicare program, using words like “end” and “kill” even though the program would continue to exist in a privatized form, and showing videos of old people who would not be affected by the change.
I am not going to comment on PolitiFact’s own politics (as the Wall Street Journal did), the notion of fact-checking balance that interested other commentators, or the notion that PolitiFact’s time has come and gone. The fact is Republicans by supporting Ryan’s voucher plan did essentially vote to end Medicare. The Dems who didn’t like that idea should have been more precise in their statements, saying instead “Republicans voted to end Medicare as we know it” or “voted to end Medicare as a social insurance program”—a point that Norman Ornstein, a resident scholar at the American Enterprise Institute, made in PolitiFact’s critique.
PolitiFact and others should have left it there and devoted space to the larger issue. Medicare may be wildly popular, but it is not well understood by most people—be they beneficiaries, politicians, or journalists. Deconstructing how this complicated and misunderstood program works and the historical context for proposed changes would go a long way to helping the public evaluate the arguments from both Democrats and Republicans. For more than a year, Campaign Desk has urged journalists to fill that void.
PolitiFact got into a bit of historical context, but its presentation was one-sided, saying that, “historically, attacks about Medicare have come from Democrats.” But the site did not trace the origins of the conservative/Republican efforts to transform Medicare into a voucher plan, a la Paul Ryan. A decade ago, in my book Slanting the Story: The Forces that Shape the News, I showed that conservative think tanks and their benefactors had long sought such a change as a way to transfer the increasing costs of seniors’ health care from the federal government to seniors themselves, thus saving money for the federal treasury. Deficit hawks like this approach. During that period, the Heritage Foundation and others decided to educate the press on the virtues of using vouchers for Medicare and modeling the program after the insurance arrangements for federal employees.
There’s no doubt that the voucher plan contemplated by Ryan—and now his new sidekick, Oregon senator Ron Wyden—will eventually change Medicare from a social insurance scheme, where everyone who paid into the program is entitled to a benefit, into private insurance, where the sellers must bow to the profit incentive. Because all people over sixty-five are included in Medicare’s gigantic pool, and risks are spread over more than 40 million seniors, Medicare is able to insure lots of very old and very sick people at reasonable costs. Private insurers cannot do that.
Last week, writing for the Reporting on Health Blog, I noted that with private insurance there are zillions of risk pools, and that’s why people who are not part of a group must pay more for their coverage. There’s no one to spread the risk to when they get sick. When you design a risk pool using private insurance, the government must force people to buy insurance in order to broaden the pool and spread the risk, which is what the health reform law does.
The prescription drug law, which gave the task of providing the new benefit to commercial insurers, moved supporters of privatization closer to their goal. Until the prescription drug law came along, all Medicare recipients got the same hospital and medical benefits, although seniors could buy different supplemental coverage to plug Medicare’s benefit gaps. Everyone made payroll tax contributions, which paid for their hospital coverage, and everyone paid the same premium for medical coverage. The drug law began to change that by introducing means testing, a concept more associated with welfare programs than social insurance. It called for wealthier seniors to pay higher premiums for their medical coverage beginning in 2007. The health reform law took means testing a few steps further, requiring those seniors to pay more for their drug benefit as well. The law also reduced the subsidy Medicare will provide wealthier people for their medicines and changed the rules for determining who is wealthy, so that more people will pay the higher premiums. Few in the media paid attention.
After that law passed in 2003, Harvard government professor Theda Skocpol predicted that the changes would splinter political interests. That is happening now—witness Democrat Wyden and Republican Ryan. “The genius of Medicare was that it included poor people and the middle class. It wasn’t designed as charity or welfare,” Skocpol said. Few have defined Medicare better, which is why I use her quote to help journos write about the program. Because Medicare was neither welfare nor charity, it captured popular support early on and has sustained it over the years.
A voucher plan will crack Medicare’s support by allowing people to leave the program, take their government subsidy—in the form of a voucher—and buy private coverage. Under Ryan and Wyden’s plan, people could remain in the traditional program. Experts have long feared that those who remain would be the sickest. These people won’t be terribly attractive to commercial carriers, even if the law is written in a way that requires carriers to take those at death’s door. Care in the government program will become very expensive and perhaps untenable. Medicare could nosedive into a death spiral, common in commercial insurance where policyholders can no longer afford their coverage.
It’s time to end this sideshow drama over PolitiFact and get on with the business of explaining Medicare—what’s at stake for everyone, not just seniors in wheelchairs. Snarky blog posts from all sides do little to enlighten the electorate.