The future of Medicare is one of the major political issues of our time. In the 2000 presidential election campaign, Al Gore and George W. Bush offered sharply contrasting proposals for providing prescription drug benefits to Medicare recipients. Liberal and conservative politicians not only battle over the generosity of Medicare's benefit package but also clash over how to maintain this vital yet expensive program for the baby boomers. Clearly, no one can claim to understand contemporary American politics and policymaking without understanding the Medicare program. Few scholars are more knowledgeable about Medicare politics than health policy expert Jonathan Oberlander. Combining rich, detailed narrative with acute political analysis, Oberlander offers an illuminating guide to Medicare's evolution since the program's creation in 1965. This book immediately takes its place as the best short monograph on Medicare's political development, current status, and future prospects.

By design, The Political Life of Medicare lacks a unified theoretical framework for explaining Medicare's unfolding trajectory. Oberlander asserts that Medicare politics is so complex that it defies “artificial simplification” (p. 11). Most of the book is devoted to a crisp descriptive analysis of the intricacies of Medicare financing, regulation, and administration. The author's detailed substantive claims about how Medicare works are highly informative and reliable. Yet he does not shy away from heated theoretical debates. In tracing the course of Medicare's historical development, he questions a number of leading political science hypotheses, raising doubts, for example, about the alleged influence on Medicare policymaking of interest-group power and path dependence. His theoretical arguments are not unimpeachable, but he successfully demonstrates the need for much better empirical explanations in policy-oriented political science research.

Oberlander's central historical thesis is that from 1966 to 1994, Medicare was governed by the “politics of consensus” (p. 5). Medicare policymaking was largely bipartisan, the program's operations rarely triggered public debate, and policy elites shared a belief in favor of maintaining Medicare as a universal federal insurance program. He acknowledges that Medicare politics has never been problem- or conflict-free. During the 1970s and 1980s, policymakers struggled to control Medicare outlays without either disappointing program beneficiaries (who wanted the program's benefit coverage to keep pace with the standard in the private insurance market) or alienating medical providers (who wished to preserve their professional autonomy). Nevertheless, until the mid-1990s, policymakers were generally able to keep the conflicts produced by the tensions embedded in Medicare's administrative structure below the political radar screen.

But the politics of consensus in Medicare came to an end in the mid-1990s. Oberlander makes a good case that the fracturing of the Medicare consensus was not simply the result of the Republican takeover of Congress in 1995. Rather, Medicare's political environment was transformed in the mid-1990s by the growing ideological polarization of policy elites, political resistance to payroll tax hikes, and the rise of intergenerational equity concerns among certain officeholders. The author is at his best in showing how the exogenous changes in Medicare's political environment were mediated by the program's inherited financing design. At the time of the program's adoption in 1965, federal policymakers agreed not to rely on general revenues for Medicare's primary source of financing. Social insurance advocates like Wilbur Cohen believed that Medicare would be most successful if it were financed as a self-supporting program through payroll tax revenues. For his part, Ways and Means Committee chairman Wilbur Mills (D-AR) insisted that payroll taxes be confined to Medicare Part A (hospital insurance) and that beneficiaries share the costs of Medicare Part B (physician services). Medicare would therefore be financed through two distinct trust funds. One result of this fiscal design was that Medicare Part A would face the threat of “bankruptcy” whenever the program's outlays grew faster than its dedicated receipts. A great deal of Medicare politics since 1965 has consequently focused on maintaining program “solvency.” Oberlander makes a powerful case that both the timing and character (if not the existence) of Medicare-reform debates would have been altered if the program had been established with different financing mechanisms (p. 104).

In Chapter 6, Oberlander engages the political science literature by testing several major theories of public policymaking. He examines whether Medicare policy outcomes between 1965 and 1994 were consistent with the direction of election results, public opinion, elite preferences, interest group lobbying, and the feedbacks from past policy decisions. This chapter is quite provocative but it leaves some important issues unresolved. Ultimately, Oberlander seems more interested in supporting his central claim that Medicare policy-making is too complicated to be modeled than he is in determining how much of the variance in Medicare policy outcomes any given factor can explain. He does make some excellent critical points in this chapter, observing, for example, that the disparity between elite and popular opinion on Medicare casts doubt on politicians' justifications of their positions as being reflective of mass preferences. In addition, he shows that the influence of constituency pressures on Medicare outcomes has not been uniform but, rather, has varied with the nature of the issues and group identities at stake in particular debates. He claims that the observed empirical patterns are largely due to budgetary conditions and fiscal constraints, but the specific causal mechanisms at work could be articulated more clearly.

The author's discussion of the influence of policy feedbacks and path dependence is also only partially satisfying. He is right to argue that it is not easy to identify all the potential feedback effects relevant to Medicare policymaking that should be measured. But his concluding observation that Medicare politics today is “back where it started” in 1965 (p. 196) fails to adequately consider the many important ways that current officeholders are constrained by the Medicare policy decisions made by their predecessors. While I am quite sympathetic to the author's skepticism of monocausal explanations in policy research, he could have given the major contending theories a better workout.

These caveats aside, The Political Life of Medicare is a significant contribution to the literature. Well-organized, elegantly written, and jam-packed with sophisticated insights about the substance and process of U.S. public policymaking, the book deserves to be read by anyone concerned with American national government, health-care politics, and the welfare state.