A Medicare deal would be Washington’s most impressive accomplishment in at least a decade because it would show progress can trump political ideology when it really matters.

The Medicare divide has reflected a split simplistically blamed on partisanship, but that characterization obscures the more philosophical divide that has held up agreement:

• Is the invisible hand of the marketplace a more effective device for delivering economic goodies to a society than the (sometimes) heavy hand of government bureaucracy?
• Should Medicare treat everyone equally, or should those with more money pay more for care, thereby opening the door to means-testing a once-universal program?
• Should government generally act in the best interests of the majority of citizens (in economic terms, the middle class; in Medicare terms, the mostly healthy) or be primarily tasked with looking out for the much smaller group that is least able to take care of itself?

The politically correct argument is that government should look out for both groups. But that bromide ignores the laws of economics.

Productivity incentives (tax cuts) boost the economy but increase the income gap between rich and poor.

Efforts to narrow that gap, generally by raising taxes to fund government programs, limit overall productivity. That’s because individuals who get to keep less of what they earn produce less.

The gulf over Medicare may be easier to bridge than on most issues involving these tradeoffs because both sides want a deal for their own selfish political reasons.

President Bush and the Republicans see providing some prescription-drug coverage as part of a Medicare overhaul that would restrain costs as a big re-election plus.

Democrats are emotionally committed to Medicare, one of their signature creations, and want to add prescription-drug coverage to the mix.

What has held up a deal is a decision by enough members of the Democratic minority — who see injecting market forces into Medicare as a mortal sin — to risk going to ideological hell in exchange for the prescription-drug benefit.

In the long run, the current economics of Medicare won’t work. The current estimate is that, in less than two decades, the costs of caring for the aging baby-boom generation will bankrupt the system.

More money will be needed from higher taxes, or costs will have to be cut, through reducing benefits or injecting free-market competition.

The GOP wants to deal with Medicare’s structural problem now that it controls government to ensure that taxes won’t be raised later to cover an eventual revenue shortfall.

The core Republican belief is that people act in their economic interests when given choices, and that will foster innovation and lower costs.

The Democrats who want Medicare to remain entirely government-run don’t trust the free market to help those who need the program the most.

Except perhaps the few who still think Karl Marx got a bad rap, most of them understand the free market generally works. But they focus on the reality that within the high overall standard of living capitalism produces, there are winners and losers.

In Medicare, free-market competition would likely mean that eventually the rich and healthy might get a better deal than the poor and sick. That’s because in the free market they can buy better coverage or won’t pay as much because of their health profile.

Currently, everyone in Medicare is treated the same, and the Democratic Holy Grail is that this must continue, even if that sacrifices efficiencies.

Ironically, that position conflicts with another party article of faith, that government should make sure that the wealthy subsidize those who are less affluent.

It is the Republicans who want an overall deal, pressing for a two-tiered, progressive system of premiums — not benefits — to make the numbers work.

They understand that, without some kind of reform, the system will eventually collapse of its own weight.

That’s what happened to the Soviet Union and Eastern European countries, which were unable to continue to exist. Although everyone was theoretically treated equally, the system created no incentives for economic efficiencies.

And it is not just Medicare that shows these deep philosophical differences in U.S. politics. The issue of the efficiency of the invisible hand of the marketplace runs through the critical divide over cutting taxes and spending.

That’s why an agreement, or lack of one, about overhauling Medicare is a very big deal.

Peter A. Brown is an editorial page columnist for the Orlando Sentinel. His e-mail address is pbrown@orlandosentinel.com.