By Paul Krugman – The New York Times.
During the campaign, Donald Trump often promised to be a different kind of Republican, one who would represent the interests of working-class voters who depend on major government programs. “I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” he declared, under the headline “Why Donald Trump Won’t Touch Your Entitlements.”
It was, of course, a lie. The transition team’s point man on Social Security is a longtime advocate of privatization, and all indications are that the incoming administration is getting ready to kill Medicare, replacing it with vouchers that can be applied to the purchase of private insurance. Oh, and it’s also likely to raise the age of Medicare eligibility.
So it’s important not to let this bait-and-switch happen before the public realizes what’s going on.
Three points in particular need to be made as loudly as possible.
First, the attack on Medicare will be one of the most blatant violations of a campaign promise in history.
Some readers may recall George W. Bush’s attempt to privatize Social Security, in which he claimed a “mandate” from voters despite having run a campaign entirely focused on other issues. That was bad, but this is much worse — and not just because Mr. Trump lost the popular vote by a significant margin, making any claim of a mandate bizarre.
Candidate Trump ran on exactly the opposite position from the one President-elect Trump seems to be embracing, claiming to be an economic populist defending the (white) working class. Now he’s going to destroy a program that is crucial to that class?
Which brings me to the second point: While Medicare is an essential program for a great majority of Americans, it’s especially important for the white working-class voters who supported Mr. Trump most strongly. Partly that’s because Medicare beneficiaries are considerably whiter than the country as a whole, precisely because they’re older and reflect the demography of an earlier era.
Beyond that, think of what would happen if Medicare didn’t exist. Some older Americans would probably be able to retain health coverage by staying at jobs that come with such coverage. But this option would by and large be available only to those with extensive education: Labor force participation among seniors is strongly correlated with education, in part because the highly educated are healthier than the less educated, and in part because their jobs require less physical effort. Working-class seniors would be left stranded, unable to get the health care they needed.
Still, doesn’t something have to be done about Medicare? No — which is my third point. People like Paul Ryan, the speaker of the House, have often managed to bamboozle the media into believing that their efforts to dismantle Medicare and other programs are driven by valid economic concerns. They aren’t.
It has been obvious for a long time that Medicare is actually more efficient than private insurance, mainly because it doesn’t spend large sums on overhead and marketing, and, of course, it needn’t make room for profits.
What’s not widely known is that the cost-saving measures included in the Affordable Care Act, a.k.a. Obamacare, have been remarkably successful in their efforts to “bend the curve” — to rein in the long-term rise in Medicare expenses. In fact, since 2010 Medicare outlays per beneficiary have risen only 1.4 percent a year, less than the inflation rate. This success is one main reason long-term budget projections have dramatically improved.
So why try to destroy this successful program, which is in important respects doing better than ever? The main answer, from the point of view of people like Mr. Ryan, is probably that Medicare is in the cross hairs precisely because of its success: It would be very helpful for opponents of government to do away with a program that clearly demonstrates the power of government to improve people’s lives.
And there’s an additional benefit to the right from Medicare privatization: It would create a lot of opportunities for private profits, earned by diverting dollars that could have been used to provide health care.
In summary, then, privatizing Medicare would betray a central promise of the Trump campaign, would specifically betray the interests of the voter bloc that thought it had found a champion, and would be terrible policy.
You might think this would make the whole idea a non-starter. And this push will, in fact, fail — just like Social Security privatization in 2005 — if voters realize what’s happening.
What’s crucial now is to make sure that voters do, in fact, realize what’s going on. And this isn’t just a job for politicians. It’s also a chance for the news media, which failed so badly during the campaign, to start doing its job.