In 1980, Medicare was only in its adolescence, having been signed into law in 1965, and the extent of the fiscal challenges it would create were not yet apparent. For this reason, attacks against Republicans on the Medicare issue were relatively mild throughout the 1980s (although the left achieved some of the same effect by highlighting homelessness). By the 1990s, however, things had changed, as the program that was originally projected to cost only $12 billion in 1990 had already surpassed $100 billion in spending annually. As Avik Roy explained in National Affairs, "Medicare expenditures grew at roughly 2.4 times the rate of inflation" in the period from 1975 to 1990--a period that was not unfamiliar with inflation.Agreed.
[NOfP note: what follows is Roy's chart, which was not included in Troy's piece.]
source: Avik Roy, Testimony before the Health Subcommittee of the House Energy & Commerce Committee, July 13, 2011, at 19
By the time the Republicans took control of the House and the Senate in 1994, Medicare had become a significant part of the federal spending--today, Medicare and Medicaid constitute a staggering 23 percent of the federal budget. No effort to control budget deficits could then or can now be taken seriously without taking Medicare into serious consideration. In the aftermath of their electoral triumph, the Gingrich Republicans saw an issue that had to be addressed, and they sought to put controls on the growth of Medicare spending. And in this, Democrats saw an opportunity to regain lost political ground. . .
The standard narrative about the episode is that the Mediscare campaign, along with the showdown over the government shutdown, stopped the momentum of the Republican Revolution and helped get Clinton reelected in 1996. . .
The reaction to Representative Paul Ryan’s honest proposal to reform Medicare has served only to solidify that fear. In April, Ryan proposed a "premium support" plan to restructure Medicare to make it fiscally sustainable. He has long been regarded as the most thoughtful and articulate Republican on budget issues, and the plan he created is far from a radical one. . .
The basic outline of the Ryan plan is as follows. Future, not current, retirees will get a list of guaranteed coverage options for Medicare provided by private-sector insurance companies. They will also get some level of federal support for the premiums they must pay into the plan they choose. The support would be means-tested, so wealthier individuals would receive less support than would lower-income individuals. Medicare would also provide additional assistance to both lower-income recipients and beneficiaries with greater health risks.
This innovation--linking support to both economic and health needs--would correct a serious flaw in the current structure of Medicare. Right now, seniors currently are promised, and receive, Medicare hospital benefits regardless of income level. This means that Medicare’s Part A does not distinguish between Warren Buffett and an impoverished widow. As a result, Medicare currently spends billions of dollars on seniors who do not need governmental assistance to pay for their medical bills. This is done largely to maintain the illusion that Medicare is an insurance policy on which people are collecting and not an income transfer from younger taxpayers to the elderly. Shattering this illusion is one of the most politically explosive aspects of the Ryan plan. . .
And so, even as the administration’s leaders acknowledge the absolutely desperate state of Medicare’s finances--while refusing to suggest ways to solve the problem--their minions are steadily on the political attack on behalf of this misleading and unattainable notion of "saving Medicare as we know it." The next election will test Republican resolve to get the country on a more responsible track, and test the basic honesty of Democratic leaders when they are called to account for the fiscal disasters that lie in wait if Medicare is not reformed. And the American people will be tested as well. Will they be able to see through the fog of Mediscare to the very simple fact that a program designed with the best of intentions could have the most catastrophic of results--the fiscal collapse of the country itself?
(via reader Warren)