Medicare Reform Has No Constituency

If the polls and the experts are to be believed, House Republicans are set to lose their majority in next Tuesday’s midterms. Despite having held the House of Representatives for six straight years, and 20 of the last 24, the GOP has mainly failed in its longstanding promise to reform our entitlement system, especially Medicare, whose long-term trajectory threatens the fiscal solvency of the federal government.

It is easy to dismiss this as a failure of leadership, and to some extent it is. Republicans could have, should have tried harder. But leaving it at that overlooks the more fundamental reality: A virtually insuperable coalition controls the politics of Medicare and can successfully fend off assaults on reforms.

There are two broad groups that oppose fundamental transformations to Medicare: the medical-services industry and senior citizens. While they do not amount to a majority of the population, they nevertheless have incredible political power.

When Medicare was first proposed in the early 1960s, the medical-services industry wanted nothing to do with it. The program was broadly disdained as socialized medicine. But of course it was not. In truth it was a public–private partnership between the government and the medical-services industry, with the government coming to depend on the industry for the provision of care to seniors, and the industry coming to depend on the government for a large portion of its annual revenue.

Over the ensuing half century, the two sides have become so intertwined that it is very difficult to differentiate one from the other. The medical-services industries spends an inordinate sum of money lobbying Washington, D.C., and is a major contributor to both parties, and former government officials often leave public service to go lobby on the industry’s behalf. For all intents and purposes, it is impossible to revise the Medicare contract without the industry’s consent, which will of course be withheld if the industry believes reforms will leave them with less federal funding.