Why Do Politicians Weaponize Medicare? Because It Works

February 21, 2023

By Mark Wrede

News Feed/Stories

Sabotaging or Weaponizing

This dates at least to 1982, when Democrats used threats of Republican cuts to Social Security to pick up more than two dozen House seats in President Ronald Reagan’s first midterm elections. In 1996, President Bill Clinton won reelection in part by convincing voters that Republicans led by House Speaker Newt Gingrich wanted to privatize Medicare and Social Security.

At the beginning of his second term, in 2005, President George W. Bush made it his top priority to “partially privatize” Social Security. That proved singularly unpopular. In the following midterm elections, Democrats won back the House for the first time since losing it in 1994.

In 2010, Republicans turned the tables, using what they described as “Medicare cuts” in the Affordable Care Act to sweep back to power in the House. (Those “cuts” were mostly reductions in payments to providers; beneficiaries actually got extra benefits through the ACA.)

The use of the Medicare cudgel likely reached its zenith in 2012, when Democrats took aim at Medicare privatization proposals offered by Paul Ryan, the House Budget Committee chair and Republican vice presidential candidate. That debate produced the infamous “pushing Granny off the cliff” ad.

The reality is that Medicare’s value as a political weapon also sabotages any effort to come together to solve the program’s financing problems. The last two times the Medicare Hospital Insurance Trust Fund was this close to insolvency — in the early 1980s and late 1990s — Congress passed bipartisan bills to keep the program afloat.

Even the word “cut” can be political. One stakeholder’s Medicare “cut” is another’s benefit. Reducing payments to medical providers (or, more often, reducing the size of payment increases to doctors and hospitals) may reduce premiums for beneficiaries, whose payments are based on total program costs. Raising premiums or cost sharing for beneficiaries is a benefit to taxpayers, who help fund Medicare. Increasing available benefits helps providers and beneficiaries, but costs more for taxpayers. And on, and on.

Benefits for Contributors

There are fundamental differences between the parties that can’t be papered over. Many Republicans want Medicare to shift from a “defined benefit” program — in which beneficiaries are guaranteed a certain set of services and the government pays whatever they cost — to a “defined contribution” program, in which beneficiaries would get a certain amount of money to finance as much as they can — and would be on the hook for the rest of their medical expenses.

This would shift the risk of health inflation from the government to the beneficiary. And while it clearly would benefit the taxpayer, it would disadvantage both providers and beneficiaries of the program.

But there are many, many intermediate steps Congress could take to at least delay insolvency for both Medicare and Social Security. Some are more controversial than others (raising the payroll tax that funds Medicare, for example), but none are beyond the steps previous Congresses have taken every time the programs have neared insolvency.

Republicans are correct about this: Medicare and Social Security can’t be “fixed” until both sides lay down their weapons and start talking. But every time a granny in a wheelchair gets pushed off a cliff, that truce seems less and less possible.