Sorting Out Public Opinion on Medicare Reform

In seeking to limit the growth of federal spending, restraining Medicare’s growth is the top priority. Medicare is such a large program, and its enrollees are such an important component of the electorate, that policymakers are exceptionally wary of making the necessary changes. A reasoned policy debate on the issues is made even more difficult because public opinion is typically misinterpreted and the debate is accordingly poorly framed.

The typical observer thinks that America is currently being faced with the choice of whether to change Medicare or whether to keep it the same. This understanding is reinforced by rhetoric about “end[ing] Medicare as we know it.” When seeking to analyze public opinion, most pollsters ask their respondents whether they’d prefer a particular set of changes to Medicare, or whether they’d prefer to maintain the current system.

Some recent examples:

• A Kaiser Family Foundation poll released in August asked “Which of these two descriptions comes closer to your view of what Medicare should look like in the future?” It found 58% agreeing that “Medicare should continue as it is today, with the government guaranteeing all seniors the same set of health insurance benefits” and only 36% believing that “Medicare should be changed to a system in which the government guarantees each senior a fixed amount of money to help them purchase coverage either from traditional Medicare or from a list of private health plans” 
• A Public Policy Polling poll also released in August asked “Do you believe traditional Medicare insurance for seniors should be replaced with vouchers to allow the elderly to buy private insurance if they want health care coverage, or not?” and found only 19% agreeing with reform.

While it might be nice to live in a world in which Medicare could go on forever paying guaranteed benefits and offering large choice in medical providers, the fiscal math doesn’t add up. The Patient Protection and Affordable Care Act (President Obama’s new health law) cut $716 billion from Medicare and created new regulations and bureaucracies that will forever change the program. A rationing board, the Independent Payment Advisory Board, will have extraordinary power to impose price controls on doctors who accept Medicare patients. Medicare as we know it is already over, and it’s time to look at whether the recent policy changes are for the best or if they require their own reform.

Instead of government price controls, Medicare costs can be brought under control by adding market discipline into the program. A premium-support program could be implemented to allow Medicare enrollees to have a choice in private insurance plans, with tradition Medicare remaining an option. These competing plans will be forced to offer a more attractive package for seniors that costs less and offers better quality than the alternatives, lowering costs for Medicare overall. This program is at the core of House Budget Committee Chairman (and now Republican Vice-Presidential candidate) Paul Ryan’s health reform plan.

Along these lines, the latest Reason-Rupe poll offered a very nuanced series of questions that analyzed the central issue for Medicare reformers. They asked respondents whether they prefer PPACA’s Medicare reform or more market-oriented options. They found that a market-based, premium-support model was more popular, by an 11-point margin.

After cutting through “Mediscare” rhetoric, the American people are open to fundamental reforms of Medicare. When given the choice of whether they’d rather take their chances and choose their own Medicare plans via a premium-support model or have their care dictated by Washington bureaucrats, Americans pick the market-based approach.