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Budget Committee chairman Paul Ryan (R-Wis.)

Reform Update: Ryan's budget draws political line for midterm elections

By Rebecca Kern
Posted: April 11, 2014 - 3:45 pm ET

The House Thursday passed Budget Committee Chairman Paul Ryan's Republican budget proposal, which includes a repeal of the Patient Protection and Affordable Care Act. As expected, the vote was along party lines, a 219-205 vote with all Democrats voting no along with 12 Republicans.

The bill will be dead on arrival in the Senate, but the significance of the Ryan budget is how sharply it distinguishes the two parties' differing views on government healthcare policy. As such, it will provide talking points for both sides during this year's midterm Congressional elections.

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The Ryan budget helps to “unify the Republican party in opposition to Obamacare” in the November elections, explained Yevgeniy Feyman, a fellow at the Manhattan Institute for Policy Research, a conservative think tank.

“Every 'Path to Prosperity' budget [Ryan budget] is really trying to stake out some ideological ground,” he said. “We're seeing the Republican ideological ground is really focused around the repeal of the ACA.”

That message resonates with the Republican base it seeks to energize for the midterm elections, which normally draw fewer voters to the polls. Republicans know they can't realistically pull off an ACA repeal until at least 2017, assuming they win the White House in 2016 and maintain Congressional control as well.

But until then, the Ryan budget could be a starting point for Republicans to take a piecemeal approach toward attempting to amend parts of the law if they gain control of Congress in this year's elections, Feyman said.

The Wisconsin Republican's bill contains a Medicare premium-support model for Americans who are 55 and younger which would give them, once they reach 65, the choice between traditional Medicare and buying a private plan on a new Medicare exchange.

In comparing Ryan's latest premium-support proposal to prior versions, Henry Aaron, a senior fellow at the Brookings Institution, a liberal-leaning think tank, says there's no significant change other than the effective date, which is delayed several years.

Aaron doesn't see much else new in Ryan's latest budget proposal, summing it up as a “political act designed to shape the November election and perhaps provide a Republican-controlled Congress a roadmap for next year.”

Similarly, Marilyn Moon, a liberal analyst and institute fellow at the American Institutes for Research, called the Ryan bill “an impractical approach to a very complex set of problems.”

Aaron also pointed to a seeming inconsistency in Ryan's approach to a Medicare premium-support system that would send older Americans to exchanges to find Medicare-alternative plans.

“He's proposing to do away with the healthcare exchanges and tax credits to help people under the Affordable Care Act buy insurance through the exchanges, but he's proposing to create structurally similar exchanges for the elderly,” Aaron said.

Ryan's plan would eliminate the ACA's Medicaid expansion to adults earning up to 138% of the federal poverty level. It would also transform Medicaid into a block-grant program for states and cap federal Medicaid spending based on population growth and inflation, saving $732 billion over 10 years.

Aaron contended the latest proposal's block-grant Medicaid program doesn't address the projected growth in the aging population over the next decade, or account for increases in cost-per-person care.

“There is no indication anywhere that the economics in delivery of care could possibly offset the projected increases of enrollment and cost-per-person. So what we're talking about is significantly scaling back healthcare for the poorest people in the nation,” Aaron said.

Feyman said that Ryan's proposal to eliminate Medicaid expansion could end up hurting Republicans in states that have agreed to expand Medicaid coverage using federal funds.

“Once you expand a program, paring it back is extremely difficult,” he said. “So it would be a pretty big political risk after 2017 to repeal Medicaid expansion because you would see millions and millions of people lose health insurance. And that's just a constituency that's going to be permanently opposed to you.”

Rebecca Kern is a freelance writer.

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