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Lessons from Messing with Medicare

In 1989, a powerful Washington politician messed with Medicare. Grandma and Grandpa weren’t happy. The guy who was untouchable in the marble halls of the Longworth Building was within seniors’ reach back in the district.

Ways & Means Chairman Dan Rostenkowski faced some 250 angry senior citizens. They demanded Rosty undo the harm he and his tax-and-spend buddies had inflicted on their Medicare and them. He got a reality check.

“Progressive” Caucus members today feel untouchable, on the verge of a shut-out policy win for the socialist Left. President Biden pushes the Leftist agenda of Bernie Sanders and Elizabeth Warren. They’re gunning for government price controls, which will hammer seniors.

Budget reconciliation contains gut-punching taxes and spending and socialist policies. They’ll bring a day of reckoning for reckless pols in about a year. Rosty’s retreat should be a warning; it won’t be heeded.

Repeating political hubris, the partisan budget reconciliation package harms Medicare’s most popular parts. It targets the Part D drug benefit’s and Medicare Advantage’s keys to success — private parties in Part D negotiating drug prices and coverage and similarly designed MA, where private entities compete for seniors’ enrollment and offer coverage more like what beneficiaries had during their working years.

These fast-growing, consumer-pleasing Medicare programs will be wrecked. This in total disregard to CBO crediting health care savings that prescription coverage achieves.

Budget reconciliation will dumb down modernized Medicare to resemble conventional Medicare — one size fits some.

Current law prohibits HHS from interfering in Part D drug maker-health plan-pharmacy negotiations. Medicare law also blocks HHS from setting a drug formulary or pricing. Instead, private parties, having equal footing, duke it out without government’s thumb on the scales or arbitrarily choosing which medicines are covered or setting their price.

Other government price control measures from H.R. 3 look likely to be in the reconciliation package, e.g., reference pricing pegged to drug prices foreign government-run health systems set and a 95% tax on the most innovative medicines.

Medicare Advantage faces a tax on its success. MA plans attract more and more seniors, offer attractive benefits, lower out-of-pocket costs, deliver quality care, higher value and better medical outcomes. They do this by care coordination and taking up-front responsibility for their beneficiaries.

Nevertheless, Speaker Pelosi and Leader Schumer plan to pay for expensive new benefits in conventional Medicare by pilfering from MA. MA plans will lose around $300 billion over 10 years while enrollees in Parts A and B gain some level of vision, dental and hearing coverage.

Translation: Seniors will be left worse off. Overall Medicare spending likely goes up because of utilization of the new benefits and uncoordinated care in Parts A and B, while innovation, quality and clinical outcomes suffer in Parts C and D. Congressional Democrats are hanging the 40% of Medicare enrollees — 26 million seniors and counting — in MA out to dry.

Seniors have a property right in Medicare. They qualify through 40 quarters of work and paying Medicare taxes. Here come pols changing the rules on them after the fact, diminishing their due benefits.

Let’s talk reality check and radicals’ reckoning.

A recent Morning Consult survey finds overwhelming seniors’ satisfaction with Part D drug coverage and little support for government price controls:

  • 92% satisfied with Medicare coverage generally

  • 87% satisfied with Part D coverage

  • 85% say their Part D plan provides good value

  • 84% consider their Part D premiums affordable

  • 83% consider having a choice of competing Part D plans important

  • 76% say total out-of-pocket costs are reasonable

  • 75% report their Part D plan covers all their prescribed medicines

  • Only 30% favor piercing the noninterference safeguard

Another Morning Consult survey of MA enrollees finds 98% satisfaction with MA’s coverage. A warning to present-day Rosties: 93% regard a politician’s protecting MA important to getting their vote; 77% of MA seniors “strongly oppose the federal government reducing the amount of money paid to Medicare Advantage” (i.e., just what Democrats are doing).

Simultaneously, President Biden’s numbers are sinking faster than an anchor. Quinnipiac’s latest poll finds Biden underwater, 38% approval vs. 53% disapproval. Only 44% consider Biden honest; only 42% view his administration as competent.

With his party holding narrow majorities in Congress, he and the radical Left (which far outnumber moderate House Democrats) are overreaching.

Washington has a short collective memory. Politics runs in waves — fortune ebbs and flows. There are no permanent victories, no permanent defeats.

That’s why it’s prudent to keep first principles — property rights, the rule of law, fairness, equality — as guiding lights when your party holds power. Rosty lost sight of that. So have Biden and his fellow travelers. Removing HHS noninterference in Medicare drug negotiations and robbing Medicare Advantage may well come back to bite them.

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