Republicans are getting attacked at their spring break Town Hall meetings over their plans to privatize Medicare and turn it into a voucher program. But they seem to be getting traction with one response, which reflects the political jujitsu contained in Rep. Paul Ryan’s plan. Here’s what Rep. Lou Barletta, a Republican from Pennsylvania, told the New York Times:
I am not sensing the general public is angered over Medicare reform. When I explain that people over 55 are not affected there is almost a sigh of relief.
From the start, it was obvious why Ryan included the delay in his privatization scheme. It allows Republicans, who’ve always backed privatization of Medicare, to tell current seniors — their political base — that this will not affect them. Of course, that also means that the proposed change will do nothing to solve the current decade’s budget deficit, the ostensible reason for the change. But that’s not really the goal, is it?
But let’s take a closer look at what will actually happen after 2023, and think through what it means for the generation between 45 and 65, most of whom will still be alive by 2033 when Ryan’s privatization scheme will be fully in effect. Every new senior entering Medicare after 2023 will receive a voucher to buy insurance. According to the Congressional Budget Office, that will pay for less and less of their coverage. By the time 2033 rolls around, their vouchers will cover about one-third of the cost of care.
But what will the overall Medicare-eligible population look like in 2033, when the entire 77-million strong baby boom generation will be in its golden years? According to the CMS actuary’s office, there will be 85.4 million Medicare-eligible seniors that year, up from 48.6 million today. Their projection for 2023 is about 69 million. That means roughly 16 million newly retired, active, more politically engaged seniors will be receiving sharply lower benefits and making sharply higher co-pays (call it higher taxes) to pay for health care, while about 53 million will be on the old plan that pays about 80 percent of costs. Every year after 2033, the ranks of seniors in the costly plan will grow, while there will be a declining number of seniors under the old, more financially attractive plan. Moreover, those in the old plan will be the most expensive people to take care of because they are the oldest in the cohort, thus consuming the vast majority of Medicare’s funds.
So what we will have is two groups of seniors: one younger, healthier, more politically active and making significantly higher payments for health care insurance out of pocket; and the other older, sicker, poorer and being coddled with the financially “bankrupt” older plan. This is precisely the situation that people in line for state and local government pensions face. Taxpaying private sector workers, whose employers took away their pensions years ago, resent paying higher taxes for pension benefits earned by their neighbors who went to work for government and never had their pensions taken away.
Can there be any doubt that there will be opportunistic politicians in that far away year of 2033 who will attack the “greedy geezers” in the old plan? Won’t older seniors wind up being easy scapegoats for the rising anger of those stuck in the new plan who are paying higher bills?
The politics of resentment has a long history in America. One is reminded of the retort by Guilded Age tycoon Jay Gould, who in 1896 faced a strike among his railway workers at a time of high unemployment. “I can can hire half the working class to kill the other half,” he shrugged.
I’m over 55. In theory, I don’t have to worry about Paul Ryan’s plan. But here’s my message to my cohort: We can hang together, or we can hang separately. You may think you’re safe from the effects of privatization on future seniors, but if I were you, I’d keep a wary eye out for the other half of the working class.Did you like this? If so, please bookmark it, RSS feed.