So far in this campaign season, Americans have heard about building a wall on the Southern border, banning Muslims from America, changing foreign policy strategy in the Middle East, stopping illegal immigration—and how big Donald Trump’s hands are. Yet they haven’t heard much serious discussion about meaningful entitlement reform. It may not bet be the most exciting topic, but it’s on a short list of the most important.
The United States spent $888 billion on Social Security and $546 billion on Medicare in 2015. Health-care costs are skyrocketing. We’re seeing double-digit insurance-premium hikes, with the expectation that they will only get worse unless we seriously overhaul the Affordable Care Act.
Against this backdrop, it’s remarkable that we barely hear any specifics on these issues, beyond an acknowledgement of rising costs. The story is much more complicated than the cost problem—and it isn’t all bad news, either. Aspects of our health care and entitlement system actually work quite well; others, not so much. But in a political season, what’s working gets lumped in with what isn’t, as candidates paint with a broad brush.
Take ObamaCare, the costs of which continue to rise. New estimates from the Congressional Budget Office project that the program will cost the federal government $110 billion in 2016.
Even so, one thing that’s clear about ObamaCare: repeal is a dead letter, and it should be. The program is in place now, and our task should be how to make it work better. GOP presidential candidate John Kasich has been honest enough to acknowledge this. Over 20 million Americans are now insured because of ObamaCare—that’s a real achievement, but it’s one that we could make more cost-effective. How? For starters, by allowing the purchase of health insurance across state lines, which would dramatically cut costs for millions of Americans. We should also consider insurance subsidies with fixed credits that Americans can use as they see fit—whether on insurance premiums or health services.
Medicare is another area where we hear a lot about costs and not enough about what works and what’s worth protecting. Most Democrats certainly recognize that the program is a lifeline for seniors, but we also hear that we need to cut or even “phase out” Medicare to get the federal debt under control. But health care for the elderly isn’t a bargaining chip. And, critically, every candidate has ignored how well this program actually works—especially Medicare Part D (prescription drug coverage).
Just last week, the Medicare Payment Advisory Commission (MedPAC) recommended that lawmakers strip key patient protections and coverage benefits from Medicare Part D. The commission wants to phase out mandated manufacturer discounts, which would lead to an increase in out-of-pocket expenses; require low-income beneficiaries to purchase off-brand medicines; and remove critical provisions for Part D beneficiaries living with mental illness or those who recently underwent an organ transplant. Yet this is a program with a better than 85 percent approval rating and actually saves money according to the CBO, why would MedPAC want to tamper with it?
The same question applies to the massive cuts proposed to Social Security. It’s as if Republicans don’t realize that Americans paid into this program over their working lives. I happen to believe that we do need to consider raising the age at which recipients can claim benefits. But we should also look at returning Social Security to its original and most practical objective: preventing poverty among seniors. We can reduce benefits for higher earners by reshaping the program so that higher-earning seniors would continue to receive benefits that they paid for with decades of taxes, but the system would be reoriented toward benefiting those who need support the most. For example, we could reduce benefits for the highest earning 25 percent or even 50 percent, which research shows would alleviate up to 33 percent of the Social Security funding gap.
There’s important work to be done in improving the delivery of entitlement programs and health care more generally in America. Voters are missing an opportunity, however, when candidates won’t talk seriously about entitlements—including the parts that work well—during a crucial presidential campaign. As the campaign season winds on, voters in upcoming primary states should insist that candidate address these issues.