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July 31, 2015

Medicare Turns 50--Here's Why People Still Love It But Hate Obamacare

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The law that created the Medicare program turned 50 on July 30. It remains the country’s most popular health insurance program, while Obamacare, at five, is its least popular.

There are reasons why Medicare, despite all of its problems, survives. Had Democrats been willing to consider them before ramming through Obamacare, they might have avoided some of the political fallout and economic turmoil that they inflicted on themselves and the country respectively.

Medicare was bipartisan. First and foremost, Medicare passed in 1965 with large bipartisan support: 57 Democrats and 13 Republicans in the Senate, and 237 Democrats and 70 Republicans in the House. That was close to half of the Republicans in each house of Congress. As a result, both parties had a stake in fixing any problems that arose—and a number of them did.

Of course, President Obama claims he had to go forward without Republican support because they all opposed health care reform. That is absolutely not true. Republicans were opposed to his legislation, but there were many who initially supported reform and would have voted for something more targeted.

Medicare was targeted. Medicare was intended to fix a problem: uninsured seniors. And nearly every senior is now covered by Medicare.

Obama claimed his law, too, would achieve near-universal coverage. Had the president limited his health care law to helping the uninsured get coverage, it might have garnered widespread support. But he didn’t.

And ironically, unlike Medicare, Obamacare is having only a modest impact on the uninsured. When the legislation passed there were nearly 50 million uninsured Americans; the Congressional Budget Office predicts there will still be about 30 million uninsured for the next decade.

Medicare was an improvement. When Medicare passed only about half of seniors had health insurance, and what they had was often limited and expensive, especially if they were on fixed incomes. Thus Medicare coverage was a vast improvement for almost all seniors.

Obamacare, by contrast, has been a disaster for most people who already had coverage and were satisfied with it. Most of them have seen their policies canceled and their premiums—and deductibles—increase significantly (including my wife).

People working for large companies have seen fewer changes, but their time is coming, especially when Obamacare’s “Cadillac tax” cranks up in a few years.

So while it is true that millions now have coverage who didn’t have it before, millions more will have their coverage canceled or changed. And they will be paying more for it.

Medicare only paid the bills. In congressional testimony leading up to the vote on Medicare, the secretary of the Department of Health, Education and Welfare (now Health and Human Services) explained to Congress that HEW would be a doctor- and hospital bill-paying machine. He had no authority to try to impose price controls or ration care.

That attitude didn’t last long. Health care spending exploded immediately, with hospitals raising their prices 22 percent the first year. President Lyndon Johnson had to promise in his 1968 State of the Union Address to “stem the rising costs of medical care.”

But the point is that Medicare didn’t try to remake the health care system; it just tried to provide seniors with coverage.

Obama and the Democrats, by contrast, wanted to make the health care system work the way they thought it should. The result is that virtually everyone’s health care and coverage has been, or soon will be, affected.

Of course, Medicare is far from perfect. It is financially unsustainable and low physician reimbursement rates make it increasingly difficult for seniors to find a doctor who will take new Medicare patients.

But it is a testament to Medicare’s popularity that politicians have been reluctant to significantly change the program, even as virtually every Republican campaigns on repealing and replacing Obamacare.

Medicare has hit 50 largely unchanged—at least for seniors—from its original form. Obamacare is unlikely to make 10 without significant changes—if it survives at all. That’s because LBJ worked with Republicans to get a targeted bill. Obama couldn’t be troubled with that effort because no one knew as much about health care as he thought he knew.


 

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