Senior Moment: the weird GOP strategy to privatize medicare

You’re a Republican senator. How do you sell a plan to privatize Medicare?

One way is to fashion the massive overhaul as an extension of the private system members of Congress enjoy — the Federal Employee Health Benefits Plan — and then trumpet the merits of that system over existing Medicare.

“We have to convince [seniors] this is something better,” said Sen. Jim DeMint (R-SC), flanked by Sens. Lindsey Graham (R-SC) and Rand Paul (R-KY), authors of a new Medicare privatization plan, at a Capitol press conference on Thursday. “If we thought Medicare was better, we would be on it as senators.”

DeMint is 60 years old. Graham is 56. Paul is 49. Medicare eligibility age is 65.

The plan itself is remarkably similar to ObamaCare, but for seniors. The senators say the system they envision would go a long way toward fixing Medicare’s solvency problem, though the details don’t support the claim.

“Right now we pay $11,000 per person for Medicare, the taxpayer does,” Paul said. “Right now for the federal employee health plan is $5,000. It’s going to be about $7,000 when we put an older crowd in there. Federal employees including myself will have to pay more. It’s about $30 a month more. But I think that’s something we have to do to make it fair to help save Medicare.”

Under the plan, seniors would be subsidized up to 75 percent of their monthly premiums, with wealthier seniors receiving smaller subsidies. The eligibility age would also climb, slowly. But FEHBP per-capita costs are rising faster than Medicare’s — so even if the plan were able to save money at the outset as Paul claims, the costs of the new program would likely surpass projected Medicare costs in the near future.
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“Medicare is already set up as a government program,” DeMint said. “So we’re beginning to privatize with this idea. To go the other way in the private sector for people who have private employment, and to bring that under government control and to define benefits is completely the opposite direction. So what we’re trying to do with Medicare is move it back toward a plan that we would like.”

If Republicans can make their peace with the Affordable Care Act and help figure out how to make the Affordable Care Act's exchanges work to control costs and improve quality, it'd be natural to eventually migrate Medicaid and Medicare into the system. Liberals would like that because it'd mean better care for Medicaid beneficiaries and less fragmentation in the health-care system. Conservatives would like it because it'd break the two largest single-payer health-care systems in America and turn their beneficiaries into consumers. But the implementation and success of the Affordable Care Act is a necessary precondition to any compromise of this sort. You can't transform Medicaid and Medicare until you've proven that what you're transforming them into is better. Only the Affordable Care Act has the potential to do that.

So Bachmann is perhaps right to say that the president is moving us towards a day when ObamaCare -- or, to put it more neutrally, "premium support" -- might come to Medicare. He's seeing whether it works in the private health-care market first and, if it does, there's little doubt that the political pressure to extend it to other groups will be intense. The question is why Bachmann and her party are doing so much to stand in his way? The corollary to Bachmann's accusation that the president has a realistic plan to privatize Medicare is that the Republicans, for all their sound and fury over the Ryan budget, don't.