At press time, it was not yet clear whether or how much the negotiations on the federal debt ceiling would hurt Medicare. But one thing is certain: Intense debate will continue about how to control Medicare costs, and it will include heated rhetoric about "rationing" health care. But where a normal definition of "rationing" would be "the equitable distribution of scarce resources," the health-care system in the United States is the polar opposite: It inequitably distributes abundant resources. And the people who raise the loudest accusations are actually promoting an increase in this unjust kind of rationing.
The U.S spends twice as much as other developed countries on health care, while leaving 50 million people without any coverage, resulting in the premature death of 45,000 people a year. Tens of millions more people are sicker because they don't get the care they need; many people suffer under crushing medical debt.
Rep. Paul Ryan's Republican budget proposals in April, some form of which we may be debating until next year's election and beyond, would extend that bleak picture to the 43 million Americans who rely on Medicare. Ryan's plan would double out-of-pocket costs to seniors over the coming decade -- while enriching private insurance companies. The House Republican budget plan also sought to ration care by capping federal spending on the 69 million seniors and family members who rely on Medicaid and by ending the 2010 health-care reform law's expansion of health coverage to 32 million uninsured people.
While it is true that the rising cost of U.S. health care is one of the biggest long-term challenges to the federal budget, the problem is with our overall health-care system, not with Medicare and Medicaid. In fact, they pay less for services than private insurance does. For example, even with its older patient base, Medicare pays $2,200 for an average hospital stay, almost 50 percent less than the U.S. average. It's the most prominent U.S. example of what can be seen throughout the world: National health insurance controls cost, because governments have the bargaining power to pay lower prices for services.
Paying lower prices would not result in fewer services or rationing care, as conservatives argue -- in fact, just the opposite. Health care is much more expensive in the United States than in other developed countries, but we go to the doctor a lot less in the U.S. than they do in those countries; we also are admitted to the hospital less often and for shorter stays. Societies that pay lower prices can afford access to more care.
In April, President Obama contrasted his budget approach with that of the Republican budget, saying: "Their plan essentially lowers the government's health-care bills by asking seniors and poor families to pay them instead. Our approach lowers the government's health-care bills by reducing the cost of health care itself."
Last year's health-care reform established a new body, the Independent Payment Advisory Board (IPAB) to control costs. If the growth in Medicare costs exceeds a target amount, then the IPAB -- now a subject of ire for Republicans and many Democrats -- would institute cost control measures that would go into effect unless Congress intervened. Since cutting eligibility or benefits is not part of its mandate, savings would have to come from the actual drivers of cost: the prices paid for services and the way they are delivered.
The U.S. could also lower spending dramatically by having Medicare follow the example of the Veterans Administration: negotiating prescription drug prices and providing drugs directly to seniors, bypassing private insurance companies.
The battle over Medicare and how to control federal health-care spending is fundamentally about whether we will reverse or increase the current, incredibly inequitable system-wide rationing. It is a battle, fought on the terrain of public discourse, that will determine the health, livelihoods, and lives of millions of Americans.
Richard Kirsch is a senior fellow at the Roosevelt Institute, and a senior adviser to USAction. His book on the grassroots campaign that led to passage of health-care reform will be published in 2012.