NEWS

'Political Life of Medicare' is subject of UNC health policy expert's new book

CHAPEL HILL -- Medicare will be a dominant issue in American politics for the next three decades, significantly because enrollment is expected to nearly double from 40 million to 77 million during that time, a University of North Carolina at Chapel Hill health policy expert predicts.

Medicare has dominated the news recently, as the U.S. House and Senate have passed separate legislation that would add drug benefits to Medicare and are now negotiating the differences between those bills.

The current debate over prescription drug coverage is a front in a larger war over Medicare's programmatic identity, said Dr. Jonathan Oberlander, assistant professor of social medicine at UNC's School of Medicine and author of "The Political Life of Medicare," a book recently published by the University of Chicago Press.

"What we are seeing now is a prelude to what will be a nasty war over the future direction of this program," he said.

In contrast to the political debates that have characterized Medicare discussions from the early 1990s onward, Oberlander said a de facto political consensus had defined Medicare from its 1965 inception through almost three decades afterward.

"As soon as Medicare was enacted, it had immense popularity with its elderly beneficiaries, and it was popular with their children as well, since they were spared much of the expense of paying for their parents' and grandparents' medical care," he said. "Medicare had a very broad public constituency because, like Social Security, it was universal - with Americans eligible for benefits regardless of income.

"And because Medicare was so popular, it proved difficult to dislodge politically. Both parties had to make their peace with it, and both conservatives and liberals compromised."

Oberlander's book takes Medicare from the struggles over national health insurance in the early 20th century that provided impetus for a national senior-oriented health plan, through the legislative debates before Medicare's creation in 1965 and through four decades of program reform and health policymaking. Also covered are the transformation of Medicare's payment policies for hospitals and physicians, the rise and demise of catastrophic health insurance (the last attempt at adding outpatient drug coverage), analysis of the emergence of managed care and HMOs in Medicare in the 1990s, and speculation on Medicare's political future.

Medicare is the United States' most successful insurance program and a fascinating subject because of the contradictions that have defined its 38-year existence, he said. For example, Medicare is essentially a public insurance program that buys services in the private sector. The escalating costs of private medical care services have put an increasing strain on Medicare's solvency, Oberlander said.

Moreover, he added, Medicare's architects expected the program to be the cornerstone of a national health insurance system for the entire population; they never anticipated that, nearly four decades after its enactment, Medicare would still operate as a stand-alone public insurance program.

Medicare's history is also replete with unexpected events, Oberlander said. He wrote of the 1988 catastrophic health insurance legislation: "The only substantial expansion in program history was rolled back because of opposition from segments of the elderly population."

This reversal, Oberlander said, was unprecedented in the history of U.S. social provision.

Catastrophic health insurance briefly added prescription drug coverage to Medicare's benefits, and the issue of drug coverage re-emerged in the 2000 election campaigns of Bush and Al Gore - where, Oberlander wrote, "Medicare commanded more attention in a presidential election than at any time since 1964."

The Congressional Budget Office reported a surplus in the federal budget, which had not happened in three decades, Oberlander wrote.

"Two of the most important pressures for fiscal restraint in Medicare, then, federal deficits and trust fund shortfalls, were nowhere in evidence in 2000," Oberlander wrote. "As a consequence, the politics of Medicare in that year's election revolved around something that had rarely happened in the program's history: a bidding war to expand benefits. The potential benefit that became the subject of Al Gore and George W. Bush's attention was prescription drug coverage."

As the current debate concerning prescription drug policy takes place in Congress, Oberlander is writing a book on Medicare reform in the next 30 years, in which he examines how the program can absorb the baby-boom generation. The book, to be published by The Century Foundation, is written for a general audience.

Oberlander, who teaches health policy in UNC's School of Medicine and department of political science, said his students are deeply engaged with political relevance and history of Medicare. He said he emphasizes the issue's complexity, both to his students and to the readers.

"Some readers will look to this book for a single, overarching theory of Medicare politics," he wrote in "The Politics of Medicare." "They will be disappointed - and they should be."

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Note: Oberlander is available for comment on his book and for analysis on current events surrounding the Medicare program. He may be reached at (919) 843-8269 or jonathan_oberlander@med.unc.edu.

News Services contact: Deb Saine, (919) 962-8415 or deborah_saine@unc.edu