This Is Not Your Mother's Medicare: Part 2

We are confident that good citizens will be willing to put the country's interests first and advocate for and demand a pragmatic and collaborative solution to our Medicare dilemma.
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doctor keeps the money and the...
doctor keeps the money and the...

In Part 1 of this post we provided background and information on the Ryan Plan for Medicare highlighting reasons why it would neither protect nor strengthen Medicare. We concluded Part 1 as follows:

It seems to us that there is little to no question that if the Ryan Plan were adapted it would mean dramatic changes to the way Medicare is delivered and would apparently have substantial negative cost and coverage consequences for many beneficiaries. There would still be a promise. But, it would be dramatically different than the promise that was made to Paul Ryan's mother. The promise was once a safety net for all. Now it is high wires for us to walk on individually without harnesses.

In this part, we extend our analysis on why this is the case.

The way the Ryan Plan is being sold by the promise makers is by saying to today's seniors -- not too worry, this won't affect you. And -- trust us -- the private sector, the invisible hand, and the magic of market forces will make this all better for future generations. Let's freeze frame on this for an instant and run the reel backward.

Medicare was passed by a bipartisan majority in both the House and Senate in 1965. Let's imagine, for sake of argument, that Paul Ryan's plan was adapted back then. What would it have meant for today's seniors in terms of their costs, coverage and comfort?

Consider the following: According to the Kaiser Family Foundation on its statehealthfacts.org site, for the 2010 reporting period (2009-2010) there were a total of 44,327,400 Medicare beneficiaries; 37,094,600 of these individuals, or approximately 83 percent, were elderly. Seventeen percent of the total population in that time frame was under 100 percent of the federal poverty level ($11,170 for one person in 2012) and an additional 32 percent was within 199 percent of that level -- a total of 49 percent.

In 2007, 1,644,641 beneficiaries had a part B income-related monthly adjustment increase because they had income above $80,000 as an individual or $160,000 as a couple. Although the time frames vary, given these statistics, it seems reasonable to assume that, at a minimum, 50 percent or more of today's Medicare recipients or at least 20 million seniors are living on very modest or fixed incomes.

The 2009 Medicare spending by state of residence was $471,260,000. The average spending per enrollee was $10,365. This suggests that Medicare costs range considerably but the costs covered by the government for even the average enrollee are considerable. It is one thing to have most of those expenses automatically covered. It's another to think that some of them might come out of your pocket. We have not done the calculations, but if the out of pocket costs over a lifetime were similar that to those projected by the Center for American Progress, the numbers would be staggering.

Take into consideration: The significant economic downturns and downsizings of the early '80s, '90s, 2000s, and the great recession, which caused a substantial reduction in the net worth and asset value of all Americans including seniors. It should become apparent that even the relatively more affluent can be put at risk in tempestuous economic times.

Social Security and Medicare have helped seniors weather economic storms and to deal with health and personal crises for almost half a century. Contemplate what things would have been like if the Ryan Plan had been in place for this same period of time and imagine the unimaginable -- an economy that could have collapsed during the Great Recession because there was inadequate protection for the seniors. Government would have been solvent. The citizens would have been bankrupt.

Now fast forward, and think about the future generations of seniors and their needs. Is there any reason to believe that they will not be similar to those of today's seniors or that economic vicissitudes will not come in to play for many of these individuals for them as they age?

The median income in the United States has declined over the past several years, real net wages have been stagnant since the mid-'70s, a recent report showed that the majority of the jobs that have been created since the Great Recession are low paying ones, and our own analysis of BLS projections revealed that bulk of the jobs that will be created in the next 10 years are low paying ones. These are indicators that the economic circumstances for future seniors could be significantly worse than they are for today's who matured during America's golden age and economic boom times. As a result, many of those seniors could be much less self-sufficient than those of today and struggling to make ends meet. They won't be able to afford being saddled personally with an additional dose of Medicare debt.

Our concern with how this Medicare debate has been playing out -- to this point at least -- is that it is evolving into what could be characterized as "generational class warfare." It is becoming a game of we've got ours. You get yours.

And make no mistake, the senior generational "advantage" gap is widening. As David Leonhardt of the New York Times describes it in his June 24 article, younger Americans "are at a significant disadvantage with the older demographic" on three critical measures: change in net worth from 1992 to 2010; change in income from 1990 to 2010; and, share of entitlements -- Americans over 65 receive only 13 percent of social security payments but receive 77 percent of all entitlements.

On the one hand, it seems a perfectly reasonable policy decision to develop a plan that "holds harmless" or "carves out" current Medicare recipients so that there is no retroactive reduction of benefits or insufficient time for them to plan and deal with changes to the system. On the other, it also seems like a pretty good political decision to have a plan that protects seniors who vote disproportionally much higher than younger voters and who would be most resistant to change and won't rally against anything as long as it does not appear to impact them directly.

This could be especially true if seniors are a core constituency for your party as they were for the Republicans in 2008 when they voted 53 percent for McCain vs. 45 percent for Obama. And, as seniors appear to be in 2012 based upon some of the most recent polls, as evidenced in an August 31 video posted by Scott Rasmussen of Rasmussen Reports to his website that shows Romney with 58 percent and Obama with 37 percent of the likely senior vote.

We are at a juncture in American history when we desperately need bipartisan policy and politics -- especially on an issue as important to America's and Americans' future as Medicare. In spite of party line differences, we firmly believe that if more of today's seniors understood what the Ryan Plan could have meant to them and their quality of life rather than in the abstract of what it might mean to others in the future, they would have a different perspective on what should be done to "save" Medicare. They could be motivated to some form of shared sacrifice to protect and strengthen Medicare for future generations such as transferring "some of their governmental benefits to children as Ezekiel Emanuel suggests in his June 24 New York Times article, "Share the Wealth."

That's our opinion. We know that good Republicans will continue to support Republican positions and good Democrats will continue to support Democratic positions. We are confident that good citizens will be willing to put the country's interests first and advocate for and demand a pragmatic and collaborative solution to our Medicare dilemma.

We're not certain where the people who live in The Villages or where the Village People would stand on this. We do know that only the village idiot would think that we shouldn't come together to craft an approach that protects and strengthens a Medicare system of the type that was promised to Paul Ryan's mother.

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