Healthcare Business News

House GOP budget to include Medicaid block grants, Medicare changes

By Jessica Zigmond
Posted: April 3, 2011 - 12:01 am ET

House Republicans will propose significant changes to the federal government's major health programs—including block grants to Medicaid—in the budget they will unveil this week, the chairman of the House Budget Committee said Sunday.

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In a "Fox News Sunday" interview, Rep. Paul Ryan (R-Wisc.) said President Barack Obama's fiscal year 2012 budget “does nothing to address the drivers of our debt,” and his committee's budget for next year will propose statutory caps on discretionary spending, tax reform, and changes to the Medicare and Medicaid programs. Host Chris Wallace said reports have suggested the GOP proposal will cut spending by $2 trillion over the next decade, but Ryan said the plan will cut much more than that amount. He did not specify a figure, saying the numbers are still being fine-tuned.

“We will be exceeding the goals that were put out in the president's debt commission,” said Ryan, who was a member of that bipartisan panel. The deficit-reduction commission's proposal sought to cut $4 trillion in that time period.

He did, however, offer some details on proposed changes to the Medicare and Medicaid programs. For the former, the plan is expected to highlight a “premium support system,” which Ryan said he and other federal employees have and is similar to the Medicare Advantage program. In it, Medicare would list a host of plans that compete against one another and from which seniors could choose. The Medicare program would then subsidize that plan.

“It doesn't go to the person, into the marketplace, it goes to the plan,” Ryan said. “More for the poor, more for people who get sick, and we don't give as much money to people who are wealthy," he said, adding—and emphasizing later—that the plan does not apply to anyone who is 55 or older. Those Americans would keep the plans they have today.

Meanwhile, states would be given block grant funding for the Medicaid program under Ryan's plan.

“We've had so much testimony from so many different governors saying, ‘Give us the freedom to customize our Medicaid programs to tailor for our unique populations in our states,'” Ryan said. “We want to give governors freedom to do that. We will be proposing block grants for Medicaid.”

Ryan also said that both Medicare and Medicaid spending will continue to increase every single year under his committee's plan, but just not at its current pace, which he said is unsustainable.

The budget proposal will be released in the same week that federal lawmakers must agree on how to fund the government for the remaining six months of the year, or otherwise face a government shutdown, as the latest temporary funding mechanism ends on April 8. Wallace asked Ryan if he expects his ambitious 2012 plan to cut trillions of dollars from the national debt to be dead on arrival, given that legislators have had difficulty agreeing on billions in spending cuts for the rest of 2011.

“Whether it's dead on arrival, I don't know, but where the president has failed to lead, we're going to lead,” Ryan said. “And we're going to put out ideas to fix this problem.”

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