On Medicare, It’s Ryan Plan Versus Bureaucrats: Ramesh Ponnuru

Dear (Republican congressman): So you voted for Congressman Paul Ryan’s budget plan, including its Medicare reforms, and now you’re worried about it. Most of the poll numbers on the plan look pretty bad, and now your party has lost a special election in New York for a House seat -- an election in which Medicare was the top issue. Now you’re afraid you’re going to lose your seat, too.

You shouldn’t be surprised. Remember how many of your fellow Republicans went on and on about how "brave" you were all being? As your consultant, I told you at the time: When they say you’re being brave, it means you’re putting your re-election at risk. So congratulations: You were certainly brave.

You were also right. Everyone who has taken a serious look at Medicare agrees that its costs need to be controlled. Otherwise the federal government will become an old-age program with a few tanks. Merely capping the growth of Medicare spending, though, would force tomorrow’s seniors to pay more without reducing the burden of overall health costs on the economy. So it also makes sense to let beneficiaries use their share of federal dollars to shop for the best insurance. It makes more sense than the main cost-cutting alternative, which is cutting payment rates to providers.

The Congressional Budget Office doesn’t see it that way. It doesn’t know how to predict how competition will play out, so it ignores the possibility that it will produce any savings. In contrast, the CBO finds it easy to predict that lower payouts will save money, even if they would lead to worse care.

In the real world, competition works better than price controls.

Polling Well

But as I told you many, many times, it doesn’t always poll better. Your impatience, however understandable given how fast insolvency is approaching, was unwise. You would have been better off tackling easier spending issues like Medicaid first and holding hearings on Medicare’s problems and how to fix them. You should have recruited presidential candidates to raise the issue in 2012, when they will have a megaphone as big as President Barack Obama’s.

Since you don’t pay me just to say I told you so, though, I’ve been thinking about what you should do now. The bad news is that you’re stuck with this vote. A year and a half from now the Democrats and their interest groups are going to run ad after ad attacking you for trying to kill old folks. You can’t say you’re sorry for that vote without looking weak and insincere -- worse, like you really were trying to pull one over on old people but got caught.

Lower Liability

The good news is that this issue stays on a boil only if Republicans let it. If you strike a deal with Obama over Medicare -- by, say, raising the age when benefits begin in exchange for an increase in the debt limit -- your liability drops. Even without a deal, Ryan’s legislation is dead in the Senate. It will be hard for to spend the next year yelling about Medicare if nobody is doing anything about it in Washington.

So am I telling you to change the subject for the next year while the issue dies down?

No. You need to spend a lot of time over the next year talking to your constituents about Medicare. Hold town halls, lots of them. If no one brings up Medicare because it’s dropped out of the news, you bring it up. Explain why the plan is necessary and defend it against criticisms. Make it clear that people in or near retirement will be left alone, and that seniors who are poor or in bad health will get more federal support.

Get Ready

If you keep at it, you might be prepared for the onslaught of negative ads you’re going to face after Labor Day in 2012. Maybe you’ll even get some people who still worry about the plan to see that you’ve thought it through carefully -- that you’re being reasonable and responsible, and not just taking an axe to an important program for the fun of it.

That means you’ll need to do more homework than most of my clients like to do. Sorry about that. It’s what happens when you decide to take on a complicated issue over strong opposition. I can give you one more bit of advice to lighten your load. When you’re talking about Medicare, at those town halls or in interviews, don’t say that the alternative is bankruptcy and that the Democrats want to do nothing.

No, the alternative is heavy-handed bureaucratic cost-cutting. The Democratic plan is cutting payment rates so that Medicare becomes as lousy a program as Medicaid, with doctors refusing to participate in it. The Democratic plan is letting an unelected board decide which treatments won’t get funded.

If your reform plan is weighed against an impossible dream of keeping Medicare exactly as it is regardless of affordability, voters are going to prefer the impossible dream. If it’s compared to the real alternative, you just might make it. Tell the voters: If someone is going to decide how to spend your health-care dollars, shouldn’t it be you?

You’re welcome. And if any of your colleagues are interested in my advice, please let them know how modest my monthly retainer is.

(Ramesh Ponnuru is a Bloomberg View columnist. The opinions expressed are his own. )

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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