Ryan Budget Will Block Grant Medicaid, Voucherize Medicare
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In a way, the continuing resolution on the 2011 budget is really a prelude. It has dominated headlines because of the immediacy, and the threat of a government shutdown if no deal is reached. That discussion is ongoing, and while agreement has been reached on a level of cuts, where the cuts fall, and particularly the unrelated policy riders, are up in the air. And time is short.
But it’s next year’s budget, not this one, where Republicans will really seek to transform American society and the social safety net, with major changes to mandatory spending programs. House Budget Committee Chair Paul Ryan will introduce a plan this coming week, which will start with a $1 trillion cut to Medicaid:
House Republicans are planning to cut roughly $1 trillion over 10 years from Medicaid, the government health insurance program for the poor and disabled, as part of their fiscal 2012 budget, which they will unveil early next month, according to several GOP sources [...]
To bolster their cause, GOP leaders point to years of requests from governors to reform Medicaid so their states aren’t on the hook for so much money in the federal-state partnership.
Because the new health care law includes a major expansion of the program, there’s a double bonus for GOP leaders slashing it: It’s a bigger pot than it used to be, and it’s a major component of what Republicans derisively call “Obamacare.”
Fully half of the coverage additions in the Affordable Care Act come from a Medicaid expansion, most of which gets paid for by the federal government. The way Ryan will reach these kinds of savings is by eliminating that expansion, which would deny health insurance to 15 million people, and then turning Medicaid funding into a block grant.
Right now, Medicaid is an entitlement program. That means the federal government, in partnership with the states, must enroll everybody who meets the program’s guidelines. In other words, if millions of additional people become eligible because, say, they lost their job-based insurance in the recession, than the feds and the states have to provide them with coverage and find some way to pay for it. And it can’t be spotty coverage, either. By law, Medicaid coverage must be comprehensive.
At least, that’s the way it works now. If the law changes and Medicaid becomes a block grant, then every year the federal government would simply give the states a lump sum, set by a fixed formula, and let the states make the most of it. Conservatives claim block grants would give states the flexibility they need to make their programs more efficient. But, as Harold Pollack has noted in these pages, states already have some flexibility. And because demand for Medicaid tends to peak during economic downturns, when state tax revenues fall, the likely impact of a block grant scheme would be to make Medicaid even less affordable at the time it is most necessary.
Though Medicaid is seen as a program for the poor, most of all Medicaid spending comes from the elderly and people with disabilities. The elderly are 10% of the enrollees and take up 25% of the benefits; the disabled are 15% of the enrollees and take up 42% of the benefits. That’s specifically who you would hurt with this proposal. States would unquestionably limit enrollment under a block grant scheme; not even Newt Gingrich could deny that. That’s millions more people without health insurance, on top of the 15 million denied coverage because of killing the coverage expansion.
And then there’s the plan for Medicare.
On “Fox News Sunday,” the Wisconsin Republican said the Republicans’ plan would reform Medicaid, funding for which will be shifted into block grants for states. Medicare, under Ryan’s plan, will be reformed into a premium support system for those younger than 55 years old, a proposal similar to the Ryan-Rivlin plan [...]
Democrats could use the plan as a “political weapon,” Ryan said.
“We are giving them a political weapon to go out against us, but they will have to lie and demagogue to make that a political weapon,” he said. “They are going to demagogue us, and it’s that demagoguery that has always prevented political leaders in the past from actually trying to fix the problem. We can’t keep kicking this can down the road.”
I’m pretty sure you don’t have to lie about these plans, just describe them. The Orwellian term “premium support” means one thing: a voucher for individuals to purchase health insurance on the private market, thereby privatizing Medicare 20 to 30 years out. The “savings” come through not raising the level of the voucher over time, making it unable to purchase the same amount of insurance. The plan here is to save money by making old people unable to get well when they get sick. More on that here. Now, if we would simply let seniors use those vouchers to buy into other countries’ health care plans, maybe this would work fine, but I don’t think that’s what Paul Ryan, a globalization enthusiast, has in mind.
We’ve seen how the Democrats have handled the minor-league budget battle; the big leagues are coming up next.