The Long-Forgotten Medicare Expansion of 2003

You know you’re getting old when Matt Yglesias can take you on a stroll down memory lane. But that’s what he did in a post late yesterday, amplifying the discussion of partisan flip-flops that another former wunderkind, Ezra Klein, began:

[T]he most interesting flip-flop isn’t about ObamaCare, it’s about the exceptional moment in 2003 when George W. Bush and the Republican congressional leadership—including current tightwad-in-chief Paul Ryan—whipped votes in favor of what was, at the time, the largest expansion of the welfare state since Lyndon Johnson was in office. That was the creation of a prescription drug benefit for Medicare. The legislation was, in many ways, a like something straight out of the DC compromise blueprint. The basic idea was to do something Democrats wanted to do—make Medicare benefits more generous. But it was structured so as to be very favorable to pharmaceutical companies and insurance firms. And the pot was sweetened by including substantial money to faciitate seniors opting out of Medicare and into subsidized private plans. Republicans made a giant exception to their aversion to spending money on non-military matters for this, and it wasn’t paid for by offsetting spending cuts or tax increases. Only two Democratic Senators ended up voting for it, but at the same time Democrats didn’t filibuster it to death even though they had the votes….

And in an odd coda, the bill’s passage was integral to the birth of the Affordable Care Act. That’s because the deficit-financed subsidies to private insurers inside Medicare became offsetting spending that Democrats could cut in order to make ObamaCare deficit neutral. If the Bush administration had never created that program in the first place, Democrats wouldn’t have been able to cut it later on and use those savings to finance their own health care bill. They’d have either had to write a much stingier program or else include substantially more in the way of tax hikes. And yet even though the 2003 Medicare bill was controversial at the time, it seems to have basically been eliminated from memory. Now all good Republicans are against spending money on anything, but nobody proposes to repeal the basic benefit. It’s as if the whole thing never happened.

This last observation is off a bit. It’s a token of the rightward shift of the GOP that Rick Santorum did in fact get heat during the current presidential cycle for voting for Medicare Part D. And it’s equally significant that he acknowledged that vote as a mistake (rationalizing it partially because it included a boost for conservatives’ favorite health policy pet rock, Medical Savings Accounts, and also included the privatized Medicare Advantage program that Matt talks about). Santorum aside, the standard conservative litany about the betrayals of conservatism conducted under the Bush administration usually mentions Part D along with No Child Left Behind and Bush’s futile support for comprehensive immigration reform. Still, it’s true no one is talking about repealing Part D, either; it’s simply become too popular with the GOP’s base of elderly white voters (not to mention Big Pharma).

So even as Republicans talk endlessly about “entitlement reform” and runaway government spending, they come at the most fiscally troubled and the most popular of “big government programs”–Medicare–crabwise, grandfathering current and near-term beneficiaries and eating away at benefits over time through vouchers, instead of directly confronting the program and lopping off the most recently enacted benefit, Part D. It’s another example of the strange psychology of a party that simultaneously proclaims itself the champion of regular folks against “elites” (and for that matter, of Medicare beneficiaries as opposed to the welfare bums receiving help from Medicaid or ObamaCare) while disguising its ultimate intentions from its own voters.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.