Ryan budget would over­haul Medi­care and Med­i­caid, re­peal the ACA

Modern Healthcare - - NEWS - By Cather­ine Hol­lan­der —with Har­ris Meyer Cather­ine Hol­lan­der is a Wash­ing­ton, D.C.-based free­lance writer.

To the dis­may of Democrats, a top House GOP leader has again pro­posed big changes to Medi­care and Med­i­caid, along with full re­peal of Oba­macare, to help cut govern­ment spend­ing by $5.1 tril­lion over the next 10 years.

The fis­cal 2015 budget sub­mit­ted by House Budget Com­mit­tee chair­man Paul Ryan (R-Wis.) last week also in­cluded a men­tion of a long-term so­lu­tion to the Medi­care physi­cian pay­ment is­sue to end the an­nual tem­po­rary patches for the sus­tain­able growth-rate for­mula. But the doc­u­ment of­fered no de­tails on that.

“By cut­ting waste­ful spend­ing, strength­en­ing key pri­or­i­ties and lay­ing the foun­da­tion for a stronger econ­omy, we have shown the Amer­i­can people there’s a bet­ter way for­ward,” Ryan said in a pre­pared state­ment.

His budget is seen as a po­lit­i­cal state­ment ahead of the Novem­ber con­gres­sional elec­tions and a pos­si­ble pres­i­den­tial run by the 2012 GOP vice pres­i­den­tial can­di­date. It was im­me­di­ately crit­i­cized by Se­nate Democrats. And House GOP lead­ers were scram­bling to se­cure votes from Repub­li­cans an­gry about their lead­ers’ par­lia­men­tary moves to pass the tem­po­rary doc­fix bill last week.

Ryan’s budget would cut $129 bil­lion from Medi­care over the next decade. It calls for a pol­icy of “pre­mium sup­port”—which Democrats call a voucher sys­tem—

“By cut­ting waste­ful spend­ing, strength­en­ing key pri­or­i­ties and lay­ing the foun­da­tion for a stronger econ­omy, we have shown the Amer­i­can people there’s a bet­ter way for­ward.”

— Paul Ryan (R Wis.) House Budget Com­mit­tee chair­man

for Amer­i­cans who cur­rently are 55 and younger when they qual­ify for Medi­care at age 65. That would give se­niors the choice be­tween tra­di­tional Medi­care and buy­ing a pri­vate plan on a new Medi­care ex­change. Premi­um­sup­port pay­ments would be ad­justed based on in­di­vid­u­als’ health as well as their in­comes.

Some Repub­li­cans have op­posed Ryan’s sim­i­lar Medi­care pro­pos­als in the past. Crit­ics have said the pro­posal would sig­nif­i­cantly raise out-of-pocket costs for se­niors.

“Medi­care is an open-ended, blankcheck en­ti­tle­ment that op­er­ates un­der a rigid and bu­reau­cratic fee-for-ser­vice pay­ment sys­tem,” Ryan’s budget doc­u­ment said. “This cur­rent struc­ture fu­els health­care in­fla­tion, threat­ens the sol­vency of the pro­gram and cre­ates in­ex­cus­able lev­els of waste in the sys­tem,” the budget doc­u­ment said.

Ryan also called for a “fun­da­men­tal re­form” of the Med­i­caid pro­gram for low-in­come and dis­abled Amer­i­cans. It would elim­i­nate the ACA’s Med­i­caid ex­pan­sion to adults earn­ing up to 138% of the federal poverty level. The heart of the pro­posal, though, is to trans­form Med­i­caid into a block­grant pro­gram for states and cap federal Med­i­caid spend­ing based on pop­u­la­tion growth and in­fla­tion, sav­ing $732 bil­lion over 10 years.

Re­sponse from the White House was swift. Ryan’s plan “would end Medi­care as we know it, turn­ing it into a voucher pro­gram and risk­ing a death spi­ral in tra­di­tional Medi­care,” the White House said in a writ­ten state­ment. Se­nate Demo­cratic lead­ers said the Ryan budget plan gives them a fat po­lit­i­cal tar­get go­ing into the Novem­ber elec­tions.

Ryan’s budget also calls for a 10-year “doc fix,” or change in Medi­care’s un­pop­u­lar sus­tain­able growth-rate for­mula. Ryan’s budget says it “ac­com­mo­dates leg­is­la­tion” that would re­place the for­mula with a new re­im­burse­ment sys­tem.

A sep­a­rate ques­tion-and-an­swer page on the House Budget Com­mit­tee web­site said the changes would be made through a “deficit-neu­tral re­serve fund.”

The budget would re­peal the Pa­tient Pro­tec­tion and Af­ford­able Care Act. But it re­tains nearly all the health­care re­form law’s $700 bil­lion in Medi­care cuts over 10 years, which Repub­li­cans have

crit­i­cized. “Repub­li­cans are putting our econ­omy, se­niors, the mid­dle class and our na­tion’s most vul­ner­a­ble at risk to pro­tect spe­cial in­ter­est tax breaks. This is un­ac­cept­able,” Rep. Allyson Schwartz (D-Pa.) said in a writ­ten state­ment.

Congress ap­proved a two-year budget agree­ment late last year. Ryan said he went ahead and drafted a 2015 budget any­way be­cause the cur­rent agree­ment does not do nearly enough to slash spend­ing.

Dur­ing a con­fer­ence call with re­porters last week, Ryan said the nearly $700 bil­lion in Medi­care sav­ings he kept from the ACA would be fun­neled back into Medi­care through a re­serve fund, ac­cord­ing to the Huff­in­g­ton Post.

“By re­peal­ing Oba­macare, we stop (the) raid and that money stays within Medi­care,” he said. “So it ac­tu­ally helps make Medi­care stronger and more sol­vent, more se­cure.”

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