Many of the proposals to reduce the federal deficit by cutting back Medicare are deeply flawed because they ignore a central fact: Compared to the private health insurance system, Medicare is not only a more compassionate way to provide health care for older people, it is a more efficient one.
A two-year delay in the age of Medicare eligibility, like the one advocated for by deficit commission co-chairmen Alan Simpson and Erskine Boles, would not only add to the financial burden of lower- and middle-income retirees, it would increase the total medical bill of the country.
Congressman Paul Ryan’s plan is even worse. It essentially replaces Medicare for people now under 55, giving them an annual subsidy that would fall short of the private insurance premiums they would have to pay, depriving us of virtually all of the efficiency advantages of a single-payer system like Medicare, with its substantial reduction of insurance company profit and overhead.
Moreover, those covered by the Ryan approach could look forward to receiving less in Medicare benefits when they retired, but would continue to pay the full Medicare tax while they were working.
Making substantial reductions in Medicare and Medicaid benefits without addressing the need to improve the efficiency of our entire health-care system has two significant weaknesses. First, it would greatly exacerbate the problem of access to medical care, particularly but not exclusively in large areas of our country where that is already a problem. If physicians and other health-care providers can make significantly more money through the private insurance system than through the publicly funded programs, some will choose either to limit their participation in these programs, or abandon them altogether.
Second, this will do nothing to address the issue of medical care costing too much in our economy, since most of the care will continue to be paid for in the current way.
I acknowledge that I do not share the view that reducing societal health-care costs must be our highest priority.
As to the federal deficit, there are far larger savings to be achieved by a rational security strategy that will leave us as the strongest nation in the world by far, at no more than 75 percent of recent military spending levels. And as to the costs of medical care in our society as a whole, while they are going up faster than other costs, that’s due in part to the fact that the quality of the medical care we receive has increased dramatically as well.
But even given these factors, if we could reduce medical costs in general by a combination of one efficient delivery method and sensible public policies, we should do so.
Frustratingly, the conservatives most eager to cut back Medicare and Medicaid are the strongest opponents of policies to do this. Efforts in the Affordable Care Act bill to promote research on and push for the adoption of the most cost-effective treatments were severely diminished in the bill because of opposition from the right. And conservatives generally oppose the other ways to constrain costs.
First, the best way to bring down the cost of future health care is to be healthier in the future. Cleaner air, less smoking and drinking alcohol, healthier food, safer cars and driving – if we could accelerate the already positive trends in these areas, health care will cost measurably less 20 years from now.
Second, we can stop forcing very expensive end-of-life care on those who do not want it, and receive no real benefit from it.
The best example of the anti-cost control impact of conservative thinking is the case of Terri Schiavo, where Gov. Jeb Bush tried to force her husband to ignore her wishes and keep a feeding tube in place, long after any sign of life other than breathing had left her body.
Lowering the medical care cost curve is important. So is doing it in a way that avoids inflicting social harm.
Barney Frank is a former Massachusetts congressman and author of landmark legislation. He was the first member of Congress to come out as a gay man. He lives with his husband in Ogunquit.