President Obama's
press conference made a bit of real news. As ABC's Jake Tapper
points out, Obama endorsed the idea of means testing Medicare.
"I've said that means-testing on Medicare, meaning people like myself,…you can envision a situation where, for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate," the president said in response to a question from ABC News. "That could make a difference."
The president said in any negotiation "we should make sure that current beneficiaries, as much as possible, are not affected, but we should look at what can we do in the out years so that, over time, some of these programs are more sustainable."
Fine, except Medicare already is means tested. Jared Bernstein explains.
Medicare is means tested. You might want it to be more so (the current means test only hits the top 5% of beneficiaries by income), but as my colleague Paul Van de Water points out, it already is ... means-tested, that is.
Here's the chart that proves it, from the Social Security Administration.
(Source: SSA)
Bernstein adds:
Also, this idea isn’t the slam dunk everyone seems to think it is. I understand the appeal and it certainly makes sense to ask for more for a program facing a tight budget from those who can afford it. But the history of social policy leads me to worry about this: once you shift a program from universal coverage to means testing, it's increasingly vulnerable to deeper means testing until it eventually becomes a poverty program which everyone wants to get rid of. [emphasis mine]
That's one of the major arguments for not means testing further, especially with Social Security. In the case of any social insurance program, means testing it puts it into "welfare" territory, where as Bernstein points out, it becomes easier to cut because it loses political popularity. In the case of Social Security, it would do so for little purpose: the savings achieved would be largely offset by additional administrative costs for the program.
In the case of Medicare, it's a solution that doesn't answer the real problem—the ever-increasing cost of health care. Making more people pay a larger share of more expensive care doesn't do a damned thing about the real problem: the more expensive care. Obama did mention today the "potential" for getting some savings out of the prescription drug industry. That would be a much better place to start with than further benefit cuts, since it would at least start to address the real problem.
