Democrats seem to have developed a nasty budgeting habit over the past two decades: obfuscating the cost of their new programs by making offsetting Medicare changes. Recall last summer the sweeping changes Democrats made to Medicare without a single Republican vote. Using a fast-track process in Congress without debate, congressional Democrats created a new Medicare drug price negotiation program — one that the former head of President Trump’s Council of Economic Advisors estimated would lead to 100 new therapies never being developed. An unknowable number of patients could suffer and others die earlier as a result.
The Inflation Reduction Act (IRA) also contained a requirement that manufacturers rebate Medicare for prices that increase faster than inflation. Economists who understand this marketplace agree this will lead to higher launch costs for drugs, which will price some number of patients out of promising new treatments and have incalculable effects on the quality and length of the lives of some number of seniors.
To top it off, the claimed deficit reductions generated by these policies appear to be used to offset deficit hikes from the IRA’s spending spree on green energy initiatives and Democratic pet projects. In combination with new corporate taxes, Democrats were able to claim that the IRA decreased the deficit by $238 billion over 10 years, despite spending $500 billion on their new programs. This looks like a classic Washington budget gimmick.
We believe Medicare dollars should be used to shore up Medicare. The only way to honestly protect this vital health care program for 65 million American seniors is to put it out of the reach of Washington politicians using it as a piggy bank.
So, we propose a Medicare lockbox to protect Medicare from ever again being part of the partisan congressional fast-track process, which allowed for sweeping changes to the program while using it as part of an apparent accounting scheme for other partisan priorities. A lockbox would ensure the program stays focused on its core mission: the health of Americans over 65.
The Medicare lockbox would look like this: If a president ever wants to make changes to Medicare, he would be required to submit them separately from his budget request to Congress, and it would need to a stand-alone bill. Each chamber of Congress should be prohibited from considering changes to Medicare that include unrelated policy provisions, and such Medicare changes would be barred from inclusion in any fast-track partisan legislative process. Never again would Medicare changes go through Congress in anything but the normal legislative process, subject to full consideration, debate and amendment.
These changes would mean both parties have to come to the table if any Medicare ideas are proposed. This process would also ensure that changes to the program have broad bipartisan backing and a robust discussion, engaging the American people and seniors in the conversation about any alterations to the program. We believe this would lead to a better policymaking process.
Protecting the program through these improvements would also prevent potentially risky schemes that could hurt patients, as some suggest price “negotiations” could do as if they damage the opportunity for American companies to discover path-breaking cures and treatments for millions of patients.
We know the concept of a Medicare lockbox will be controversial for some. However, in Congress, Social Security is already protected from any procedural hijinks and has benefitted from that status for over three decades, removing it from political battles and keeping the focus squarely on the program’s operations and finances. These procedural protections mean any efforts to explore fixes to the challenges that Social Security face have always been bipartisan, from the time of the near-deal between Bill Clinton and majority congressional Republicans over Social Security in the late 1990s to the level-headed Democratic-Republican talks underway in the Senate today.
It is long past time that Medicare be treated like Social Security in Congress, protecting the program from partisan whims. Medicare needs a lockbox to end the budget gimmick of using Medicare changes in part to cover up the deficit impact of other new spending. We must put the minds of millions of seniors at ease, who with these changes would no longer have to worry about any Congress or president plotting to change Medicare with a bare minimum of partisan votes.
When it comes to Medicare, we say: Lock it up and let the key be sober, bipartisan solutions.
Joe Grogan is a senior visiting fellow at the USC Schaeffer School for Health Policy and Economics. Grogan served as domestic policy adviser for President Trump.
Eric Ueland is the former staff director of the Senate Budget Committee. Ueland served as director of legislative affairs for President Trump.
Grogan and Ueland both consult for health care companies and trade associations.