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Study: Why Cutting Medicare Is So Hard

By John Reichard, CQ HealthBeat Editor

July 14, 2011 -- For years, analysts have issued dire warnings that America's economic future will be threatened if lawmakers fail to control Medicare spending—with relatively little effect. So what exactly explains the gridlock over Medicare?

A new study that analyzes the role played by public and voter opinion finds four basic reasons: Medicare is, in general, popular with the public; most Americans don't want it changed; most Americans think the budget can be balanced without cutting Medicare; and, oh yes, there's the little matter of that special election in upstate New York.

Published in this week's New England Journal of Medicine, the study analyzed 21 polls exploring attitudes toward Medicare. Robert J. Blendon of the Harvard School of Public Health and John M. Benson of the John F. Kennedy School of Government conducted the analysis.

First, they say Medicare has been very popular ever since it was enacted 46 years ago. Shortly before its passage, 61 percent of Americans expressed support for establishing the health care program for seniors and the disabled; a CBS survey this June found that 68 percent of Americans believe Medicare's benefits are worth the cost of the to taxpayers.

The program also is rated highly by those who use it. Fifty-one percent of seniors, most of them covered by Medicare, rated their health coverage as excellent, according to an August 2009 Kaiser Family Foundation poll. By comparison, only 32 percent of Americans below the age of 65 rated their private coverage as excellent.

Second, as indicated by the program's popularity, most Americans don't want it changed much. Only 13 percent say it needs a major overhaul, according to an April 2011 Gallup-USA Today poll.

The House-passed budget plan that calls for restructuring Medicare has attracted the public's attention, Blendon and Benson said. The plan recommends that people entering the program in 2022 get a fixed sum toward premium payments for private health plans rather than a package of guaranteed benefits. Averaging seven polls conducted between May and June, the authors found that 51 percent of those interviewed opposed the plan, authored by Rep. Paul D. Ryan, R-Wis., and 36 percent supported it.

Third, while most Americans believe the budget deficit is a very serious problem, according to a March CBS poll, 54 percent also believe it is possible to balance the federal budget without cutting Medicare. The public wants Congress to find ways to reduce the deficit other than cutting Medicare.

Accordingly, 66 percent of Americans in an April Washington Post survey favored raising taxes on people with annual incomes above $250,000. Seventy-two percent backed cutting foreign aid. Sixty-five percent wanted to reduce military commitments abroad. And 62 percent wanted to limit tax deductions for big corporations.

Blendon and Benson also analyzed reaction to specific types of Medicare changes. Only 13 percent said premiums should be raised for everyone on Medicare, according a Kaiser poll in April, and 23 percent supported cutting Medicare benefits in the future, according to a Quinnipiac University survey also from April.

Other measures were somewhat more popular; 47 percent of Americans in the April Kaiser survey backed gradually raising the Medicare eligibility age from 65 to 67. And a Bloomberg News survey in June found that 41 percent of respondents said payroll taxes paid by employers and employees should be increased to preserve Medicare in its current state.

Fourth, a recent special election that was considered a referendum on the GOP Medicare plan did not go well for the GOP.

"Public opinion is particularly important if it affects the outcome of elections," Blendon and Benson said. In the special U.S. House election held May 24 in New York's 6th District, the winning candidate, Kathy Hochul, ran on opposition to Ryan's proposed Medicare overhaul. Moreover, Medicare was the leading issue for Hochul's supporters. Hochul, a Democrat, won that election in a historically Republican district, an area once represented by Jack F. Kemp.

The analysis also noted that Medicare is particularly important to older voters, who tend to go to the polls in relatively large numbers. Even though older voters would not be affected by the Ryan plan, in all of the polls for which responses were available by age, 59 percent of retirees and people nearing retirement age said they opposed the proposal.

These public attitudes have led "to an intense search by political leaders for innovations in medical delivery, information sciences, payment methods and prevention strategies that might save large sums in future Medicare expenditures without being seen as a threat to current or future Medicare beneficiaries and their families," the study authors wrote.

But they concluded that "if savings from these innovations do not occur in the years ahead, pressures arising from the continuing deficit and Medicare's troubled long-term picture will ultimately force the enactment of a series of policies what will no doubt be seen as painful by many."

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