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How 'Explanatory Journalism' Gets Medicare Wrong

1:47 PM, Jul 30, 2014 • By MARK HEMINGWAY
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As I've made pretty clear, I am not a fan of the "explanatory journalism" trend that purports to take an empirical approach to explaining complex issues. Its chief practitioners are a bunch of young, terribly biased journalists who tend to treat politics and policy as some sort of game, even as they broadcast their ignorance. Anyway, if you want a concise example of why explanatory journalism is bad—so pure and crystalline it could have been produced by Walter White—let me direct you to this Vox.com piece on Medicare. 

Right off the bat, the headline is not encouraging: "Medicare isn't going bankrupt. This chart proves it." Sure enough, Vox has produced a chart showing that for the last 40 years, the Medicare Trustees report has projected the date of Medicare's insolvency and those insolvency dates keep getting pushed back. The conclusion drawn from a narrow and silly set of data points is that "hand-wringing [over Medicare's fiscal predicament] is pretty much unnecessary" because Congress will take care of the problem:

What you'll see here is that this report has predicted, many times in the past, that the Medicare Trust Fund would run out of money. But its never actually happened: each time the projected insolvency date gets close, there's typically a pattern where Congress steps in and passes some type of policy to make trust fund dollars stretch at least a decade longer.

This blase attitude about very real financial problems is one of the defining characteristics of welfare state fan fiction. Read that again: "There's typically a pattern where Congress steps in and passes some type of policy..." Some type of policy? Doesn't it matter what specific policies will be employed to keep Medicare solvent? I mean, we could just double the payroll tax. It might have terrible consequences for working families, but if it keeps Medicare solvent for the rest of the century, problem solved, right?  

Nowhere in the piece does author Sarah Kliff mention that every year the same Medicare Trustees report notes that Medicare's unfunded liabilities grow astronomically even as the even as the projected insolvency dates are put off. So whipping up "policies" to "stretch" the solvency date instead of doing meaningful entitlement reform is allowing the problem to get much worse. Currently, the unfunded liabilities for Medicare are a staggering $43 trillion. That's $7 trillion more than the trustees report said four years ago. 

But it's actually much worse than that. The Medicare Trustees report bases its projections on current law, and the law is currently... Obamacare. That's "some type of policy," all right. In 2010, which is coincidentally the year that Obamacare was passed, the Office of the Actuary at CMS started producing an "alternative scenario" for Medicare predictions not based on current law but on the projected outcome they thought was most likely. At Forbes, Chris Conover notes that Medicare Part A is actually projected to grow at a rate two and a half times as fast under this scenario as it does under the rosy Obamacare-influenced projections.

The gap between the realistic projections and Obamacare's absurd assumptions is pretty consequential. For instance, Obamacare places hard limits on how much Medicare spending can grow annually, regardless of how much the program is actually going to cost or how much care seniors will need. By assuming Medicare spending is limited by Obamacare, John Goodman notes that Obama wiped out $52 trillion of Medicare's unfunded liabilities just by signing Obamacare into law. That sounds great! But can we assume that Obamacare will be sucessful at limiting Medicare spending in the future and those liabilities are really going away? I wouldn't take that bet. Based on "current law," Medicare payment rates will be allowed to drop 59 percent below what private insurers pay. "In short, the rosy picture for Medicare will come true if and only if we’re willing to tolerate devastating reductions in access to care for seniors," notes Conover. Such a scenario seems likely to cause a great deal of political blowback, and there's already significant bipartisan political pressure to repeal the part of Obamacare responsible for imposing hard limits on Medicare spending. 

It should be obvious that enacting "some type of policy" as a stopgap is about manipulating the actuarial projections—it's not about actually doing something to fix Medicare's unsustainable spending growth. And as such, we should be having an honest conversation about what exact policies will actually solve the problem instead of kicking the can down the road. Which brings me back to the conclusion of the Vox piece:

Health financing isn't static, and Congress has lots of tools in its legislative tool box to ensure Medicare can continue paying seniors' bills. That's what they've done in the past and, given that seniors are pretty big fans of Medicare (as well as pretty big fans of voting), its a decently safe assumption that its what they would do in the future, too.  Whatever the new insolvency projection released today is, you can rest pretty sure that Medicare won't pack up and stop paying bills that year — or any other time soon.

Now Vox is a website that has sold itself as "the smartest thinkers, the toughest questions.” Well, how we deal with Medicare spending certainly qualifies as a tough question. But author Sarah Kliff has outlined the problem in a way that is not just incomplete, but grossly misleading. A person who has little knowledge beyond a commonsense notion that the growth of America's debts is unsustainable is likely going come away from reading this piece totally misinformed. And to top it all off, the article is capped with an explicit appeal not to worry because the same government that brought you the Fugitive Slave Act can be trusted to fix a problem they've actually spent decades ignoring.

Despite priding themselves as health care wonks, the charitable interpretation here is that Kliff and her editors at Vox don't actually understand the problems with Medicare and aren't willfully misleading people. But I think their motivations aren't much of a factor in determining how much contempt should be reserved for people who proclaim themselves "the smartest thinkers" and go out and produce this dreck. 

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