‘Mediscare’ Works Because The Consequences of Privatizing Medicare Are Scary

Ruth Marcus has many virtues as a political pundit, but her weekend remarks on Medicare (flagged by Steve Benen) reveal that the right is having some success in its plan to cry “mediscare” in an effort to avoid criticism of its Medicare privatization scheme. Here’s what she said on Meet The Press:

MARCUS: This play has been run time after time. If you go back and look at the quotes from President Clinton back when he needed to win re-election, they sound a lot like the quotes from Democrats today about don’t let those Republicans take away your Medicare. The difference is that the debt is bigger, the deficit is bigger, the gap is bigger, and the situation is more dire. But I think that, sadly, the lesson of New York 26 is “mediscare” works.

Here’s what’s true. If you go back and look at the quotes from the time Congressional Republicans tried to privatize Medicare in the mid-1990s they do sound a lot like the quotes from the time Congressional Republicans tried to privatize Medicare in 2011. That’s because many people believe that it would be a bad idea to privatize Medicare, so every time the congressional leadership tries to privatize Medicare you have people speaking up against this idea. And we speak up against it in similar terms because the terms that have been used in the past are politically effective. And they’re politically effective because the consequences of privatizing Medicare are scary.

As I’ve been at paints to point out, the key consequence of privatization would be a steep increase in the per unit cost of health care services. Medicare is able to use its semi-monopsony status to drive down prices. If privatized the cost of treating the typical 65 year-old would increase by around 40 percent. Paul Ryan’s version of privatization then “saves” a tiny bit of money for the taxpayer by simply paying a much smaller share of the now much-higher bill. Then he promises to save large sums of money over the long term by ensuring that the share of the higher bill that the government covers will shrink drastically over time. This shrinkage in the value of the government health care coupon either won’t occur (in which case all privatization will do is increase costs) or else it will occur (in which case over 100% of the savings will come from people going without health care services they need) and in either case the consequences are scary.