After spending weeks subjecting the public to unfounded and widely debunked claims that Obamacare contains a hidden “bailout” for private insurers, Republicans have undertaken a complete reversal, and are attacking Democrats for cutting corporate welfare for insurance companies by too much.
Specifically, they’re attacking the Affordable Care Act’s reduction in overpayments to carriers who participate in Medicare Advantage, reflected in lower payment rates for program providers, which were officially announced late last week.
Unfortunately for Republicans, this line of attack on Obamacare hasn’t been as immediately effective as earlier ones, thanks to a few complicating factors. One is that it’s unclear whether or to what extent these lower rates will translate into benefit or coverage changes for actual seniors. Another is that they’ve spent the past several years talking up the urgent importance of slashing entitlement spending. But a third is that Republicans have voted for these same cuts many, many times since Obama’s been in office, have refused to remove the cuts from their own budgets even as they’ve attacked Democrats in multiple election cycles for raiding Medicare, and, broadly speaking, support the cuts on the merits.
This fundamental inconsistency is well known to reporters, and in many other circumstances that would militate toward nixing the Medicare attacks altogether. But Medicare attacks are unusually politically potent, so Republicans have decided it’s worth enduring accusations of hypocrisy if that’s what it takes to continue them.
That means they need answers for the press, though, and the only way for them to square their budgets and their Medicare attacks is through sheer bamboozlement. They think you don’t know how to read a budget, and are too stupid to figure it out.
When confronted, they retreat from pretending to oppose the cuts on the merits, to claiming the real problem is that Democrats used the savings from the cuts to fund Obamacare. But this is a non sequitur. A diversion. The attacks specifically express outrage on behalf of seniors who, Republicans claim, will lose doctors or get stuck with higher premiums specifically as a result of the ACA’s Medicare Advantage cuts.
But remember, Republicans actually support the cuts. All of these supposedly horrible things would happen under their plan, too, regardless of how the savings are spent. So right away it’s clear that the attacks are straightforwardly deceitful.
But Republicans actually redouble the bamboozlement by then claiming their budget proposes using the savings to “strengthen Medicare,” while Democrats “double count” them — i.e. simultaneously claim to have improved Medicare’s finances, and used the savings to finance Obamacare. When you hear those words, remember that whoever spoke them thinks you can’t read and don’t understand fairly simple accounting.
Republicans would have you believe that they contemplate storing the savings from these cuts in a bank vault somewhere to draw upon in the years ahead for the sole purpose of financing future Medicare benefits, whereas Democrats waste the savings on Obummercare. But that’s not how Medicare finance works or how the federal budget works or how any particular budget proposal works.
The sleight of hand Republicans are pulling requires treating Medicare as an ephemeral commitment that would disappear once its “trust fund” runs out, rather than a program that will exist in some form forever, no matter what. “Mandatory” spending in the most literal sense of the word. If you treat Medicare that way, as you should, then the accounting makes perfect sense. Every efficiency or spending cut you apply to the system improves its viability, because this permanent program now costs less each year, while revenues remain unchanged.
At the risk of drawing a generally unwise comparison between government and household budgets, imagine you make $1,000 a week. You spend $300 on your mortgage, and $700 on everything else — food, clothes, frivs, consumer debt service, etc. Now imagine you refinance your mortgage payment down to $250 a week and use the $50 savings to buy groceries from Whole Foods instead of Safeway and some nicer clothes. Nobody would object, “Aha! Double counting!” Because that would be idiotic.
And yet, here we are.
This not-actually double counting is basically what both Democrats and Republicans want to do. They just want to spend the money in different ways. Dems enacted the savings in the same bill that created the Affordable Care Act, so Republicans are fond of saying Dems cut Medicare to fund Obamacare. And in a narrow sense that’s true. But in a more important sense, money is fungible, and what the savings did is really just reduce pressure on the federal budget more generally. Those Medicare savings make Obamacare possible without pulling the money out of a different hat or adding it to the debt. Republicans by contrast want to keep the Medicare cuts but get rid of the rest of Obamacare, which basically means the savings help them make the math work in the rest of their budget. Some of them like to say that they want to apply the savings to deficit reduction, but that again requires pretending that the government stores savings in fortified piggy banks for discreet purposes. What the savings really do is help them finance their priorities — like, say, cutting rich people’s income taxes and increasing defense spending — without blowing up the budget.
And more power to them. But they should just say that. Instead they say that their plan “strengthens Medicare,” relative to the Dem plan. But it doesn’t. It doesn’t make Medicare any more affordable than the ACA does, and it doesn’t make it a more robust benefit in any way. Quite the opposite.
It’s true that in theory that Republicans could propose to apply these Medicare savings to new guaranteed Medicare benefits (a lower eligibility age, or free Iron Man suits for seniors) rather than to funding Obamacare or cutting taxes or whatever. And if that’s what they did, it’d lend some real legitimacy to their claim that they want to use the savings to “strengthen Medicare.”
But they propose no such changes to Medicare. Instead they propose to increase the eligibility age by a couple of years and privatize the program. Democrats at least use the savings to help close the Medicare prescription drug doughnut hole to finance new wellness benefits. But you’d never know any of that from listening to Republicans this week.