This column is a collaboration between KHN and
The New Republic.
A new advertisement attacking the Republican plan for Medicare features three elderly men — one sitting behind a lemonade stand, one pushing a lawnmower and one greeting some young women at what appears to be a bachelorette party. That last senior is dressed as a fireman, ready to perform a striptease act. “Did somebody call the fire department?” he says, standing with the help of a walker. “Because it’s about to get hot in here!”
The ad comes from the Democratic Congressional Campaign Committee. And its underlying argument is the same one critics of the Republican budget, myself included, have been making ever since the document’s unveiling a few weeks ago — that the changes to Medicare approved by House Republicans in their 2012 budget would leave many seniors unable to pay their medical bills and, as a result, facing real hardship.
It’s a claim to which Republicans and their supporters have strong objections. Over and over again — in interviews, articles and speeches — they have accused their critics of demagoguery and fear-mongering. But the idea of high medical bills forcing the elderly to give up their dignity, or more, is hardly far-fetched. And if you don’t want to take my word for it, perhaps you should listen to John Barclay and a little bit of history.
Who is John Barclay? Barclay is — er, was — a retired autoworker from Detroit who, in 1959, testified before the Senate Subcommittee on Problems of the Aged and Aging. That year, the subcommittee held a series of hearings around the country to better understand the financial problems facing the elderly. Medicare didn’t exist at this time and Barclay, speaking on December 10, used his appearance to highlight, among other things, the difficulty he and fellow seniors faced paying for medical care:
“We retired workers are very proud of being citizens of the greatest country in the world, but we cannot think it is the greatest possible country when about 65 percent of the aged do not have any insurance to deal with their needs for hospitalization and medical care. Without such insurance, the retired person must pretty much exhaust any savings he has before he can get free hospitalization. This is a constant source of worry. Many of my acquaintances will not visit a doctor for minor illness because they have no money to pay for drugs. After they exhaust their savings they go on welfare to get medical aid, but then, in many cases, it is too late.”
Barclay’s testimony was consistent with statistics of the time, which showed that about two-thirds of retirees had no health insurance at all and even those with insurance frequently had insurance that covered only a small fraction of their costs. And the impression Barclay conveyed was altogether typical of the way most seniors felt, according to Yale political scientist Ted Marmor. “The biggest fears included not being able to pay for care and risking turning to children or siblings for help, or it meant relying on the charitable attitude of the doctor or hospital” says Marmor, whose book The Politics of Medicare is considered the program’s definitive history. “Most profoundly, it was the sense that illness or injury — bad enough themselves — could be disastrous for family finances unless you were lucky enough to have retiree coverage from a union or government plan.”
National outrage over that situation was a major reason why, in 1965, President Lyndon Johnson and congressional Democrats were able to enact Medicare. But now Republicans in the House of Representatives propose to eliminate that program, at least in its current form. Under their budget proposal, traditional Medicare would, as of 2022, cease to be available to new retirees. Instead, seniors would get the equivalent of vouchers, which they could put toward the purchase of a private insurance policy.
The value of the vouchers would not rise fast enough to keep pace with the cost of medical care. This is by design: Limiting the value of the vouchers limits the government’s future financial liability. But what the taxpayers wouldn’t pay collectively, seniors would pay individually — and then some — in part because private insurance is actually more expensive than Medicare. The Congressional Budget Office calculates that, by 2022, the typical senior’s individual cost burden for medical care would more than double — to around $12,000 a year. That’s a huge difference. An analysis from the Kaiser Family Foundation suggests that would be equal to about half the typical senior’s entire Social Security benefit. (KHN is a program of the Kaiser Family Foundation.)
Would these seniors still be better off than Barclay and his peers from the 1950s and early 1960s? Perhaps, given that so many retirees of yesteryear had no insurance at all and the government welfare programs of the era were pretty meager. After all, Medicaid didn’t exist then, either. On the other hand, medical care was a lot less expensive in the ’50s and ’60s, both in absolute terms and relative to incomes. In addition, if the Republican budget were to become reality, Medicaid and other safety net programs — also the subject of massive cuts — would be a lot weaker than they are today. And that’s not to mention the fact that House Republicans would gradually raise the age at which seniors become eligible for federal insurance programs, leaving more and more “young retirees” uninsured altogether.
At the very least, then, enacting the Republican budget would force some significant fraction of seniors to face medical costs with the same trepidation that Barclay and his peers faced — a fear that, thanks to Medicare, very few seniors know today. And while more affluent retirees could always take care of themselves, by tapping their own funds to buy supplemental insurance and cover high co-payments, the rest would just have to make the best of the situation, by getting less medical care or finding other ways to pay for it.
Hey, did somebody just call the fire department?
Jonathan Cohn is a senior editor at
The New Republic
.
