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Tuesday, September 27, 2011

A Sensible, Non-punitive, Politically Neutral Medicare Reform Plan ?

That's how Ramesh Ponnuru describes proposals by Senators Tom Coburn and Joe Lieberman in his Bloomberg opinion piece, excerpted below. 

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Senators Tom Coburn, an Oklahoma Republican, and Joe Lieberman, an independent from Connecticut, have suggested some reforms to Medicare that would generate about $600 billion in savings within the next 10 years. They would gradually raise the eligibility age for Medicare to 67 by 2025 while increasing premiums and co-pays in a progressive manner, with higher-income seniors paying more for their coverage. They would also limit the ability of “Medigap” plans to drive Medicare spending higher by covering the federal program’s deductibles. (No private insurer would tolerate such parasitic activity.)

The plan isn’t perfect. Its means-testing provisions should be modified: Premiums should be tied to lifetime earnings, not income, so that seniors aren’t discouraged from working. But it’s a more sensible way to reduce the deficit than across-the- board cuts in defense and domestic discretionary programs. And it doesn’t really cross any of the Democrats’ ideological red lines. It doesn’t voucherize the program or otherwise transform it, as Representative Paul Ryan’s plan would. And if the health- care law that Democrats enacted -- which scaled back Medicare Advantage and cut payments to providers -- didn’t amount to fewer benefits in liberals’ eyes, they ought to be able to accept these reductions, too.

The plan leaves the campaign chessboard largely untouched. If both parties agree to these reforms, neither will take a political hit for enacting it, while both will accomplish some of their policy objectives: sparing defense for the Republicans, and sparing domestic programs for the Democrats.

Surely some liberals would prefer to see wealthy senior citizens get a little bit less help from the federal government than see education and infrastructure spending cut. But if the Democrats on the committee nonetheless balk, the Republicans should make the proposal anyway. It beats tearing each other up over taxes and defense -- when the real budget choice we face is between entitlements and everything else.