Republicans march into Democrats' line of fire in promising to cut Medicare
During last year's election campaign, candidate Donald Trump and his fellow Republicans surprisingly managed to avoid political damage over proposals in the GOP platform to restructure and cut Medicare and Medicaid.
Democrats rarely unleashed their potent Medi-scare ad campaigns from previous elections, warning older voters about the danger of Republicans going after their beloved Medicare benefits. That line of attack was blunted because Trump repeatedly promised not to touch Medicare, Medicaid, or Social Security.
But now congressional Republicans seem to be inviting scrutiny of their controversial plans to reform those popular social insurance programs by promising such action immediately after passing tax cut legislation.
Political observers say that's a questionable campaign strategy heading into the hotly contested 2018 congressional elections, in which Democrats are considered to have a fighting chance to win control of one or both chambers.
It's particularly perilous coming in the midst of a GOP drive to pass a bill sharply cutting taxes for corporations and wealthy Americans, which polls show is widely unpopular. Voters may not like it if they perceive that Republicans doled out big tax windfalls to the wealthy, then moved to trim healthcare and retirement benefits for people of more modest means.
"It's not exactly what I would consider a wise political strategy," said Robert Blendon, a professor of health policy and political analysis at Harvard University. "Giving all these tax advantages to upper-income people and then reducing these programs? I'm speechless. Politically it's very hard to understand why you would run on these issues."
House Speaker Paul Ryan (R-Wi.) and other Republicans recently have argued that cutting spending on Medicare, Medicaid, and Social Security will be essential following enactment of the GOP tax cut bill, which would increase the federal budget deficit by about $1.5 trillion over 10 years.
Even without Congress acting to cut entitlements, the tax bill could trigger automatic budget sequester cuts in Medicare and other social programs, including a projected $25 billion Medicare cut in 2018, according to the Congressional Budget Office.
"We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit," Ryan said in a radio interview Wednesday.
"You also have to bring spending under control," Sen. Marco Rubio (R-Fla.) said a week earlier. "The driver of our debt is the structure of Social Security and Medicare for future beneficiaries."
Their warnings come despite a new report from the CMS Office of the Actuary showing historically slow spending growth last year in Medicare and Medicaid.
Medicare spending grew 3.6% in 2016, down from 4.8% the year before, with per-enrollee spending growing only 0.8% compared with 2.1% in 2015. Federal and state Medicaid spending grew by 3.9%, down from 9.5% the year before, with per-enrollee outlays rising just 0.9%, compared with 4.5% in 2015.
Private health insurance spending grew much faster, increasing 5.1% in 2016, compared with 6.9% the year before. On a per-enrollee basis, private insurer spending also rose much more steeply than Medicare or Medicaid outlays—5.1% in 2016, up from 5.0% the year before.
"It's good news that healthcare spending growth continues to be below historical trends," said Melinda Buntin, chair of the health policy department at the Vanderbilt University School of Medicine. "It has given us all a welcome pause to look at what's driving the lower rates and think about how to move forward."
Since the 1990s, whether spending growth was up or down, Ryan and other Republicans have promoted Medicare and Medicaid restructuring and spending cuts. Ryan has included different versions of a Medicare voucher or premium support system in a series of House Republican budgets since 2011, softening some of the tougher cost-saving features with each new edition.
But the concept is strongly opposed by Democrats and so far lacks public support. According to a mid-2015 Kaiser Family Foundation survey, 70% of Americans support keeping Medicare as it is today, with only 26% supporting a shift to premium support. Those percentages were similar among Democrats and Republicans. Just 18% of seniors supported turning Medicare into a premium-support program.
That's why Blendon doubts most Republicans will push entitlement reform before the 2018 elections. "There are a lot of people who care about those programs who vote Republican," he said.
Both before and after his election, President Trump has seemed keenly aware of the unpopularity of proposals to restructure and cut Medicare and Social Security. He reversed his original campaign stance not to touch Medicaid, however, embracing major reforms and spending cuts in that program as part of GOP legislation to repeal and replace the Affordable Care Act.
But Ryan said this week he believes he's changing Trump's mind about his plan to restructure Medicare. "I think the president is understanding that choice and competition works everywhere in healthcare, especially in Medicare," he said.
Even so, congressional Republicans remain divided on whether and how to reform Medicare and Medicaid, as shown by some Senate Republicans' rejection of Ryan's proposed Medicaid changes during the repeal-and-replace battle.
Given the internal schisms and unpopularity of GOP entitlement reform plans, analysts are baffled about how and why Republicans would pursue them heading into 2018 election season.
Nevertheless, neither Republican Sens. Patrick Toomey of Pennsylvania nor Marco Rubio of Florida would rule it out when challenged recently by Sen. Bernie Sanders (I-Vt.) to promise not to advance cuts in Medicare and Social Security after their tax bill.
"Why bring it up if they can't agree on a real reform policy?" asked Joe Antos, a conservative health policy analyst at the American Enterprise Institute who thinks Medicare and Medicaid restructuring are needed to avert a coming budget crisis when baby boomers move into old age.
"I don't see where this is going."
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