AHCA savings, $487 billion in Medicare cuts remain in House budget proposal

The House Budget Committee on Wednesday agreed to bake in hundreds of billions in Medicaid cuts from its ACA repeal bill to the budget resolution, plus an additional $114 billion in cuts over 10 years.

The committee's Republicans' unanimously approved the decision with no Democrats on board. The budget resolution, which is the foundation for passing tax reform in the Senate without Democratic votes, also assumes Medicare will reduce spending by $487 million from 2018 to 2027.

Some of the additional savings would come from imposing a work requirement on Medicaid adult beneficiaries who are younger than 65 and are not on Social Security disability as a condition of eligibility.

The Medicare savings are built on an idea long-favored by Republicans — using vouchers to buy insurance, though Republicans say future beneficiaries will have the option to buy traditional Medicare too. Democrats during Wednesday's hearing complained that traditional Medicare would cost 25% more than it does now if vouchers come into play.

The Republicans also included savings that would stem from raising the Medicare eligibility age for future beneficiaries who are 51 or younger. Under the proposal, those individuals would not become eligible for full Social Security benefits or Medicare until the age of 67. The Congressional Budget Office has estimated that would reduce Medicare spending by 2% once everyone in the program is covered by the later eligibility age.

The proposal includes a requirement that affluent seniors pay higher premiums, and that people with incomes of $1 million or more pay the full cost of Medicare premiums without any federal subsidy.

Rep. Matt Gaetz, R-Fla., said during the hearing that the proposed changes are based on math rather than Tea Party politics, as some have alleged.

The Republican spending outline also assumes the government will do better at recouping or avoiding improper payments. The proposal said that there was $59.7 billion in improper Medicare payments in in the last fiscal year, and $36.3 billion in improper Medicaid payments. The outline assumes future improper payments will be 50% lower than today's levels.

Rep. Debbie Wasserman-Schultz, D-Fla., introduced an amendment that would have changed the resolution so that it no longer assumed American Health Care Act changes would be future law, citing the Senate bill's collapse this week.

But every Republican present on the committee voted against the amendment. "This is the official position of the House on repeal and reform efforts," said Rep. Bill Johnson, R-Ohio.

The budget resolution also includes a reduction in health spending of $43.9 billion over 10 years, the CBO estimate of how much the malpractice reform bill that passed the House would save.

Ranking Member John Yarmuth, D-Ky., called the budget disgraceful and others called the cuts to Medicare, Medicaid and food stamps draconian, several Republicans worried what it envisions might not come to pass.

"We might fail to achieve savings in mandatory spending," which includes Medicaid and Medicare, Johnson said, noting that the budget resolution might make it harder to pass tax reform in the Senate.

The first hurdle, however, is for the resolution to pass the entire House of Representatives.