The latest proposal to transform Medicare is, as Yogi Berra might say, "deja vu all over again." That's because the proposal bears an uncanny resemblance to the Clinton health care reform bill, which expired for lack of political support in 1994.
Only this time, the players are starkly different. In 1999, it's a conservative and largely Republican contingent in Congress, not a moderately liberal Democrat in the White House, that has proposed relying on so-called managed competition to control costs. Led by Sen. John B. Breaux (D-La.) and Rep. William M. Thomas (R-Bakersfield), this group calls for legislation to curb Medicare spending by giving seniors set amounts of money toward buying insurance and structuring a competition among managed care plans for their business.
The group's advocacy of defined contributions toward the purchase of private health insurance--which would leave seniors at risk for cost increases--comes at an odd time. Managed care plans are complaining that Medicare isn't paying them enough now. Plans have dropped hundreds of thousands of Medicare enrollees in the last year because they say they're losing money on the business--under current rules they can't hike their prices to seniors--and the managed care industry has launched a national political campaign to increase Medicare reimbursement rates. Why do so many conservatives now back an idea they openly derided only five years ago?
The answer is not that they're responding to a surge of public demand for Medicare reform--or for this particular brand of it. When the Kaiser Family Foundation and the Harvard School of Public Health asked voters after the election to name the most important issue for the new Congress to deal with, less than 1% cited Medicare reform. In a survey conducted by the same organizations before the election, 69% of the respondents opposed the sort of voucherization of Medicare the Breaux-Thomas plan envisions. What seems to be at work is a combination of context, calculation and conviction.
* Context. It matters to many conservatives that in their latest incarnations, vouchers and managed competition would be applied just to Medicare. Their hope is that by capping the government's financial obligation enrollee by enrollee, reform can create--from the bottom up, if not from the top down--a firm limit on total Medicare spending. Their devotion to this objective trumps whatever objections, principled or political, they may have had to managed competition when it was proposed by a president who saw it as a strategy for financing universal coverage.
