Bloomberg News

Oregon Race Previews Medicare as Sleeper Issue in Campaign

February 01, 2012

(For more on the campaign, go to ELECT.)

Jan. 30 (Bloomberg) -- The two political parties are test- marketing their strategies for the presidential campaign and congressional races in a special election in Oregon.

Republican candidate Rob Cornilles in ads is accusing Democrat Suzanne Bonamici of seeking to cut Medicare benefits for seniors because she supports President Barack Obama’s 2010 health law. The Democratic campaign arm has linked Cornilles with a plan by House Budget Committee chairman Paul Ryan, a Wisconsin Republican, to create Medicare vouchers that passed the U.S. House last April.

Democrats say they have the upper hand with voters on Medicare, which they are touting as Florida voters go to the polls tomorrow, because a Democrat won a special election in western New York last May. That campaign turned into a referendum on Ryan’s Medicare vouchers plan. Until then, the state’s 26th district had been held by a Republican since 1970.

As in the New York race, neither candidate in the Oregon contest to replace former Representative David Wu, a Democrat, was a member of Congress during votes on the Medicare plan. Wu resigned from the House last summer after the Oregonian newspaper reported on allegations that he engaged in unwanted sexual activity with an 18-year-old girl.

The Medicare issue probably will be refought in the general election in electoral-vote rich states with large populations of senior citizens including Pennsylvania and Florida.

‘Wedge Issue’

“If the Democrats get their way, it will become a principal wedge issue,” said Dan Mendelson, president of Avalere Health in Washington and a health official in former President Bill Clinton’s administration. Meanwhile, he said, in Congress “nothing of substance will actually happen legislatively.”

Medicare, the health-insurance program for Americans 65 and older and those who are disabled, is funded with payroll taxes paid by most employees and employers. The Medicare trust fund held by the U.S. Treasury is projected to be depleted by 2024, according to the 2011 trustees’ report.

In the Oregon race, which will be decided by mail-in ballots by tomorrow, a recent television ad by Cornilles says Democrat Bonamici supports cutting $500 billion from Medicare, and that “hurts seniors.” It’s an attack similar to those used in Republicans’ successful 2010 campaign to regain control of the U.S. House, and it’s a line Republican presidential candidate Mitt Romney is testing in the run-up to the general election.

“Let’s not forget, only one president has ever cut Medicare for seniors in this country, and it’s Barack Obama,” Romney said in a Dec. 10 Republican debate.

‘Old Playbook’

“They are going to go back to the old playbook that worked so well,” said Max Richtman, president of the National Committee to Preserve Social Security and Medicare, which opposes Ryan’s Medicare plan. Obama’s 2010 health-care law reduces future Medicare spending, though there are no cuts to current funding levels.

The Bonamici campaign says Cornilles, who has called for a “hybrid” approach to Medicare that includes the current program and a private option, supports privatizing the health- care program for seniors. Cornilles says he doesn’t support full privatization.

Democratic District

The Oregon district is a solid Democratic one, where Obama had 61 percent of the vote in 2008, so if Democrats win by a narrow margin that will encourage Republicans to repeat this strategy in races across the country, Richtman said. In the 2010 election, voters supported Wu over Cornilles by a margin of 13 percentage points. In the district, 11.2 percent of the population was 65 and older as of the 2010 Census.

Congressional Democrats are making Medicare a theme of their 2012 election effort after 235 House Republicans last year voted for Ryan’s plan to turn Medicare into a system under which retirees would receive subsidies to buy private health insurance. In releasing the plan, Ryan acknowledged he was handing Democrats “a political weapon.”

Other elements of the health-care debate may play a role in campaigns this year. Congress must act by Feb. 29 to prevent cuts in doctors’ reimbursement rates under Medicare. The current rate was extended for two months in December as part of payroll tax-cut legislation. The Supreme Court is likely to rule by July on the constitutionality of a key part of Obama’s health-care law, the requirement that individuals purchase health insurance.

Florida’s Elderly

Though health care so far hasn’t been a significant theme of the Republican primary, pollsters and lawmakers expect that to change once the race moves to a general election, particularly in Florida. In that state, 2010 Census data show individuals older than 65 make up 17 percent of the population, or about 3 million people. Nationally, it’s 13 percent.

“It’s perhaps the largest legislative achievement of the Obama administration and, in a presidential year, the president has to run not only on his vision for the future but on his record,” said Henry Aaron, a health policy analyst at the nonprofit Brookings Institution in Washington.

Republican presidential candidate Newt Gingrich and Romney have expressed at least some support for Ryan’s plan.

Ryan has modified his Medicare proposal, in December working with Senator Ron Wyden, an Oregon Democrat, to propose a framework that allows people turning 65 starting in 2022 to choose between the existing Medicare system and an alternative one of regulated private insurance plans. He is likely to include some version of this modified plan in his fiscal 2013 budget proposal, giving Republicans in Congress a chance to cast votes in favor of a bipartisan plan.

‘Politically Palatable’

“We think that our Medicare reforms have become more politically palatable,” Ryan told reporters on Jan. 20. House Republicans are not “backing off on the kinds of reforms that we’ve advocated,” he said.

Ryan reiterated that point yesterday on the “Fox News Sunday” program, saying that “we’re not going backwards, we’re going forward.”

Nadeam Elshami, spokesman for House Minority Leader Nancy Pelosi, a California Democrat, said in an e-mailed response to Ryan’s comments on Fox: “Once again, Republicans have chosen to undermine rather than strengthen Medicare, increase costs for seniors and cause Medicare to ‘wither on the vine,’ leading to an end of the guarantee.”

Health policy experts say a new plan probably won’t change the election-year dynamic over Medicare.

Senior Vote

“Nothing’s going to stop the attacks” on Republicans over the Medicare vote, said John Rother, president and chief executive of the National Coalition on Health Care, a group of providers, business and labor groups advocating to reduce health-care costs. “What else do Democrats have with respect to the senior vote unless something new comes along?”

The Democratic Congressional Campaign Committee has run ads on radio and placed calls in 81 districts focused on the House Republicans’ vote on Ryan’s plan last year. In turn, the National Republican Congressional Committee, the party’s campaign arm, says it has countered with a number of ads highlighting Democratic members’ or candidates’ support of Obama’s health law.

“Particularly if the economy doesn’t improve then any tinkering with Medicare becomes a big issue,” said Susan MacManus, a University of South Florida political scientist.

--With assistance from Alex Wayne and James Rowley in Washington. Editors: Jodi Schneider, Robin Meszoly

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at Jschneider50@bloomberg.net


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