"Don't Compare Obamacare to Bush's Medicare Part D" by Jonathan Cohn

[TomCADem]

Interesting article that notes some of the flaws in Ezra Klein's comparison to Medicare Part D. It is a shame that the MSM is generally missing this type of in depth policy analysis, and instead simply reiterates the Republican talking point of the day,

http://www.newrepublic.com/article/115646/obamacare-vs-medicare-part-d-comparing-two-health-care-reforms

On Monday, writing in the Washington Post, Ezra Klein reminded everybody of the history: The program’s first few weeks were chaotic, with seniors unable to get their drugs because enrollment into their chosen plans hadn’t worked. Even Republicans called it a disaster. But the Bush Administration fixed the problems and, eventually, it became popular. Today millions of seniors use it to pay for their prescriptions. Nobody talks of modifying the program, let alone repealing it. It’s part of the policy landscape.

Even this analogy, though, has its limits. The most important difference between Medicare Part D and Obamacare has nothing to do with information technology—and everything to do with policy trade-offs. The Bush Administration and its allies weren’t particularly concerned about budget deficits, though they frequently talked about them. And it showed in their drug benefit proposal, which called for spending hundreds of billions dollars in perpetuity—and no new revenues or cuts to offset the new spending. When a government actuary warned that the program would cost even more than the administration projected, the Bush Administration famously tried to squelch the finding. The actuarial projections turned out to be wrong, but the law is still increasing deficits by hundreds of billions of dollars in the next decade alone.

* * *
Obama and his allies adopted a very different approach. They made two vows—that health care reform would pay for itself and that, over time, it would actually reduce the deficit. Critics mocked them and, to this day, few people seem to believe them. But the official projections suggest they were good to their word. The Congressional Budget Office has on several occasions estimated the cost of the Affordable Care Act, first upon passage and then following various tweaks to the law. Each time, the conclusion has been the same: A slight reduction in the deficit during the first ten years, with greater reductions after that.

But fiscal responsibility is not easy. To offset the law’s new spending—and, by the way, to reduce health care spending overall—the Affordable Care Act raises revenue and cuts spending. Among other things, the law reduces Medicare spending, caps the existing tax break for employer health insurance, and raises payroll taxes on the wealthy. It also calls upon individuals to spend some of their own money on insurance, even if that means requiring them to buy coverage they might not otherwise get. And for each of these changes, there’s a constituency bound to get angry about it. Seniors and parts of the health care industry don’t like Medicare cuts. People with more generous health plans don’t like losing some of their tax benefits. Wealthy people don’t like paying taxes. Healthy people don’t like paying more for their coverage.

[Fumesucker]

1. The wealthy don't pay payroll taxes to any great extent

Payroll taxes are capped at around $100K and most of the truly wealthy don't get an actual paycheck that would be subject to payroll taxes in the first place.