House Republicans are proposing far-reaching changes to Medicare and Medicaid as a part of a blueprint to balance the budget within 10 years. The proposal also reiterates plans to repeal the Affordable Care Act, including financial assistance for low- and middle-income individuals, and the taxes implemented to help pay for coverage expansion programs.
“This will save over $2 trillion, end the Obamacare raid on Medicare and rescind all of the tax increases on job creators and healthcare innovation,” the budget document states.
The blueprint calls for shifting to a premium support model for Medicare, in which beneficiaries would receive subsidies to shop for coverage on the open market. But that change—which Democrats denigrate as vouchers—wouldn't be implemented until 2024 to limit the impact on current beneficiaries.
House Republicans also want to overhaul Medicaid to give states greater flexibility on how they spend those dollars and merge it with the Children's Health Insurance Program. Referred to as “State Flexibility Funds,” the approach would resemble block grants to states that they could use to provide healthcare coverage to low-income households.
The proposals mimic those put forth under former Budget Committee Chairman Rep. Paul Ryan (R-Wis.), although they've been scaled back in some ways to make them more politically palatable. Ryan has now taken the gavel at the Ways and Means Committee and Rep. Tom Price (R-Ga.) is chairing the budget committee.
“It's far less dramatic than the original proposals from a few years ago,” said Loren Adler, research director for the nonpartisan Center for a Responsible Federal Budget.
The proposals have taken on a new salience with Republicans in control of both chambers of Congress. That puts them in position to actually pass their preferred budget, although President Barack Obama is certain to veto anything that deviates significantly from his own proposal.
Senate Republicans are scheduled to release their budget proposal Wednesday. They're also expected to submit a plan that would balance the budget within 10 years, which will require steep cuts to anticipated spending under current law.
The release of the budgets is merely the start of the congressional debate over funding for fiscal 2016, which starts on Oct. 1. In the coming months, the Republicans will need to fill in the details of how they intend to keep spending within the proposed framework.
The House budget accounts for a full repeal of Medicare's sustainable growth-rate formula for paying doctors, which will cost roughly $175 billion over a decade, according to the Congressional Budget Office. But the blueprint provides no details on exactly how the “doc fix” would be paid for. House Speaker John Boehner and Minority Leader Nancy Pelosi have been negotiating a deal to permanently repeal SGR, but their proposal only calls for roughly one third of the price tag to be offset by spending cuts.
The House plans to overhaul Medicare and Medicaid will be deeply controversial. Democrats have savaged the proposals in the past as attacks on the poor and elderly.
Robert Moffit, a healthcare policy analyst at the conservative Heritage Foundation, points out that many seniors are already comfortable with a premium support model through their experiences with Medicare Advantage and the prescription drug program, even if they might not think of it in those terms.
“It's sort of like a white rabbit in the snow,” Moffit said. “You've got to look at it to see that it's there, but it's there.”
An analysis of the current Medicaid proposal by Edwin Park, vice president for health policy at the left-leaning Center on Budget and Policy Priorities, found that it would cut nearly $1.8 trillion from Medicaid over a decade. That includes elimination of the Medicaid expansion under the Affordable Care Act and $161 billion in additional cuts.
The House plan also offers few details on what it wants to put in place of the Affordable Care Act or how it would pay for any replacement plan. The budget only promises a “patient-centered approach to healthcare reform.”
“There's a lot of words used to describe what their proposal is supposed to do, but so far there's been a lot of non-plan plans on ACA replacement,” Park said. “This seems no different.”
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