IN RECENT WEEKS, REPUBLICANS have been blasted in certain conservative quarters for caving in to the White House on Medicare. The charge? That they allowed the administration to slip a provision into the budget deal that effectively stripped senior citizens of their right to contract privately with doctors. A Wall Street Journal editorial complained that, under the provision, seniors enrolled in Medicare “will have less freedom than elderly British citizens” (who, of course, live under socialized medicine). Steve Forbes has made the same complaint a central feature of his criticism of the budget deal.
The complaint is exaggerated. This is unfortunate because it obscures the far more important fact that, in the war between Republicans and the White House over Medicare, the GOP has mostly won — though you’d hardly know it.
To understand the current state of Medicare politics, go back to the autumn of 1995. The Republicans offer up dramatic Medicare reform as part of their balanced-budget plan. President Clinton and the rest of the Democratic party jump all over it, denouncing it as a savage attack on the elderly. Clinton vetoes the plan, then, in the presidential campaign the next year, boasts that he prevented “excessive cuts in Medicare.” The White House and its allies spend millions on the issue, with almost no response from the GOP. Pep. Charles Rangel, the feisty Democrat from Harlem, tells Republicans that they “ought to be ashamed of what you’re doing to the American people.” Rep. Pete Stark speaks of the GOP’s “urge to destroy Medicare.” Sen. Jay Rockefeller moans, “I have no idea how I am going to explain the damage done to the seniors of West Virginia . . . by this Medicare cut.” Rep. John Lewis of Georgia sums up the Republican effort this way: “A scam, a sham, and a shame.”
Now fast-forward to the spring of this year. Republicans — mounting a full- scale retreat on practically every other issue — introduce almost exactly the same Medicare bill. But this time, most Democrats vote for it — including Rangel, Stark, Rockefeller, and Lewis. Clinton gladly signs it. And the press, for the most part. ignores the flip-flop.
Today, Democrats insist that the bill they supported was far milder than the one proposed two years before. But when you look at savings in the first five years of each plan, they are nearly identical: $ 119 in the old plan, $ 115 in the new. And most of the cuts come from the same place — doctors and hospitals that treat Medicare patients. Yet, two years ago, the Democrats assailed these cuts as “devastating” and “heartless.”
So too with the structural changes of the two plans — another sore spot with Democrats in 1995. They were essentially the same. Under the new law, seniors will be able to choose from a menu of private-insurance options, including Medical Savings Accounts, with the premiums paid for by Medicare.
“In the majority of cases, the bill signed into law is quite similar to the one proposed two years ago,” admits John Rother of the American Association of Retired Persons. Either by design or accident, the GOP played the issue almost perfectly. Democrats directed their assault at a last-minute Senate effort to tack on means-testing of Medicare’s Part B premiums and a boost in the eligibility age. These were never central to the reform and were painlessly forfeited.
So why so little attention? The press seemed bored or distracted. With Clinton basically on board from the beginning, there was no high-stakes battle, and no election hanging in the balance. So why sweat the details?
What’s more, Republicans seemed loath to crow about their success, noting instead that, this time around, it was a bipartisan effort, and trumpeting some new preventive-care benefits. Speaker Newt Gingrich did at one point during the negotiations say that the new Medicare bill was, if anything, more conservative than the old one, but he delivered his remarks in a closed meeting of conservative activists. A June report from the Senate Republican Policy Committee took note of the Democrats’ flip-flop; Republicans didn’t push it.
It’s possible that Republicans didn’t want to let the cat out of the bag, but even after Clinton signed the bill on August 5, they did little to score points against the Democrats who had savaged them less than a year before. Only Dick Armey, the House majority leader, permitted himself a moment of public satisfaction: “It is the vindication of the Republican party,” he said, “for the vilification they were subjected to in 1996.”
Now, though, Republicans find themselves on the defensive against the Right. That Wall Street Journal editorial criticized them for a provision that allows seniors to contract privately with doctors only if those doctors agree to opt out of Medicare entirely for two years, making any such contracts unlikely. The Journal said, rightly, that no such restrictions existed in the old law. But the Health Care Financing Administration (which runs Medicare) for years sent letters to doctors warning them that if they dared accept private money, they would be “subject to sanctions such as civil monetary penalties and exclusion from Medicare.” Naturally, few doctors cared to test the agency’s resolve.
When word of HCFA’s tactics reached Sen. Jon Kyl, Republican of Arizona, he decided to add an amendment to the Medicare bill stating clearly that the law would allow private contracts — no ifs, ands, or buts. The White House was able to neuter that amendment with the two-year restriction. In effect, the final bill codified the status quo.
That status quo may be bad, but here too, the GOP may yet win one. Kyl and other Republicans are pushing to revise the private-contracts provision. By raising the stakes on this issue, Republicans could end up forcing Clinton to stand publicly against letting seniors make their own arrangements with doctors. Republicans will win that fight. And then? There will probably be yawns all around.
John Merline is the Washington bureau chief of Investor’s Business Daily.
