Why Do Seniors Oppose More Government Healthcare?

Why are seniors with government-run healthcare the most nervous about a plan that includes ... more government-run healthcare? Last week, I offered three theories.

1) They're older and more conservative. The end!

2) They're also nervous about Medicare cost controls, which are at the heart of reform.

3) They're also nervous about healthcare exaggerations and outright lies: "death panels" and "mandatory conversations with doctors about end-of-life treatment," neither of which exist in any reform bill.

Today Ezra Klein asks the same question in the headline above, and he makes some excellent points -- e.g. seniors' feverish instinct to protect Medicare is a pretty good advertisement for government-run healthcare! But he also writes something I wanted to parse:

What are seniors so afraid of?

From the beginning, Medicare has been named as one of the potential sources of savings that would fund subsidies for the uninsured. That sounds like service cuts, even if the specific changes don't involve anything of the kind (most of the savings would come from reducing overpayments to the private insurers that participate in the Medicare Advantage program).

I love Ezra's blog, but I don't believe this paragraph. Is it really possible to cut $500 billion from a program and leave services completely in tact? As the Post recently reported, the cuts involve "charging wealthy seniors more for prescription drug coverage, cutting $120 billion in payments to private insurance companies that serve some seniors and trimming projected payments to hospitals by $155 billion in an effort to spur efficiencies." Ezra says "most" of the efficiencies will come from Medicare Advantage payments to private insurance companies. But that Post article says they'll comprise less than a third, and even more will come from payment cuts to hospitals. Either way, the crucial point is that $500 billion seems like a lot to cut from a program without expecting any change in service whatsoever.

And in the long term, we do want service cuts! Over-treatment is a major driver of health inflation (see Atul Gawade's famed New Yorker article),  and Obama seems to agree. The other way the White House wants to use Medicare as a fulcrum for cost control is IMAC -- a independent counsel that will advise on treatments and more efficiencies to help control costs long after the 10-year window. Here's how budget director Peter Orszag explained IMAC's role:

There are a number of steps that can be taken to bend the curve - health IT, investing in research into what works and what doesn't, and changing incentives so that doctors and hospitals give you better care not just more care.

Again, that means saving money by changing services. Even if we call them "service changes" rather than "service cuts" (and even if our comparative advantage research makes our care more effective) it's not fair to say that Medicare reforms "don't involve anything of the (service cut) kind."