CBO: Ryan budget roadmap shifts healthcare burden to seniors, states
An analysis by the Congressional Budget Office of the budget proposal submitted Tuesday by House Finance Committee Chairman Paul Ryan (R-Wis.) shows that it would shift more healthcare costs to seniors while requiring states to either pick up a much larger portion of Medicaid funding or significantly reduce spending.
"Under the proposal, most elderly people would pay more for their healthcare than they would pay under the current Medicare system," said CBO Director Douglas W. Elmendorf in an analysis submitted to Ryan and the House committee. "Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts."
One benefit touted under the block grant model for Medicaid proposed by Ryan is that it would allow for greater flexibility by individual states to administer the federal dollars than current law allows. But the proposed reduction of federal spending – between $750 billion and $1 trillion over the next 10 years – would require significant changes in Medicaid programs.
[See also:Republicans' 2012 budget plan alters Medicare, Medicaid; HHS offers states advice on achieving Medicaid savings]
"Even with additional flexibility ... the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries or pay more themselves than would be the case under current law," the analysis concluded.
This proposal was strongly criticized by healthcare trade groups and advocates for the elderly.
"The Ryan Medicaid proposal takes us from neglecting the least among us to targeting them – threatening the lives, dignity and future of poor, vulnerable seniors, children and people with disabilities," said Howard Bedlin, vice president for public policy and advocacy for the National Council on Aging. "Medicaid recipients needing the most expensive care will be at greatest risk of being targeted for harmful cost-containment strategies."
The leadership of the Republican Governors Association, however, sees the Ryan proposal as a breath of fresh air. A letter from Governors Rick Perry (Texas), Bob McDonnell (Virginia), Haley Barbour (Mississippi) and Chris Christie (New Jersey) to Ryan touted "the many innovative reforms this budget will demand."
"Medicaid remains an antiquated, federal maze of regulations and mandates focused on process instead of quality healthcare," the governors wrote. "It requires months and sometimes years of negotiations for even modest changes, 'perhaps' resulting in a positive outcome at the end of the process. This practice must stop if governors are to contain costs and provide a safety net for our citizens; we know their needs far better than the federal government."
To hold the line on Medicare expenditures, the Ryan budget proposes a shift from the current system for anyone younger than 55 to a voucher or "premium support" system that would provide seniors with as much as $15,000 in federal dollars annually to help subsidize the purchase of private insurance. But the CBO analysis says that while this method would establish "cost certainty" that is better able to keep federal expenditures in line, it would also shift a greater burden to seniors over time.
"Under the proposal ... debt would eventually shrink relative to the size of the economy – but the gradually increasing number of Medicare beneficiaries participating in the new premium support program would bear a much larger share of their healthcare costs than they would under the current program," the CBO analysis noted.
According to the CBO analysis, by 2030 Medicare beneficiaries would bear the burden for roughly 68 percent of the healthcare costs under the Ryan plan, versus 25 percent under current law. That burden could lead seniors to restrict the amount of care they receive or not buy health insurance at all, the analysis said.
Senator Dick Durbin (D-Ill.), the assistant majority leader who also served on President Barack Obama's debt reduction commission, called the proposal unrealistic.
"The Ryan Republican budget has three pillars: Reduce Medicare benefits by more than half, reduce Medicaid benefits for seniors in nursing homes and reduce taxes on the wealthiest Americans," he said. "America can resolve its budget crisis without punishing the elderly and poor while rewarding the very rich."
Ryan said his proposal is at least a step toward solving Washington's looming debt crisis.
"Whenever you put bold reforms to try and fix budget problems, the other party uses it as a political weapon against you," he said in an interview with Bloomberg. "We can't be deterred (by) all of this hyperventilating rhetoric and all of this demagoguery."
