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Paul Ryan’s Health Care Fantasy



March 22nd, 2012
by Jonathan Oberlander

Wisconsin Republican Paul Ryan is frequently hailed for his fiscal responsibility and political courage.   After all, the Congressman has now put forward not one but two budget plans that offer “a blueprint for safeguarding America from the perils of debt, doubt and decline” and take on sensitive issues like Medicare.   Ryan seems to have emerged from central casting for a budget hawk:  everything about his demeanor appears to suggest a serious policy wonk committed to making the hard choices necessary to solving America’s deficit problem.

No wonder conservative commentators are hailing his latest budget proposal and its plans to remake Medicare and Medicaid.  But appearances can be deceiving.  The Ryan plan does not, in fact, offer a serious vision of health care reform or balanced budgets.  Instead, it is a conservative fiscal fantasy, albeit one that would dramatically erode access to medical care for America’s most vulnerable populations.

Ryan wants to repeal the Affordable Care Act, a move that would increase the projected uninsured population in 2016 by 30 million.  Ryan has previously co-sponsored health reform legislation to expand access to coverage, though that legislation had serious flaws.  Yet any substantive plan to expand insurance coverage is  conspicuously absent from his latest budget proposal (though Ryan briefly mentions “patient-centered reform,” including interstate sale of insurance and tort reform).  In the nearly 100-page document, Ryan mentions Americans without health insurance only once, repeating the discredited claim that Medicaid patients fare worse than the uninsured.  Budget resolutions are, as Ryan notes, statements of principles and priorities—evidently the uninsured didn’t make his list.

Ryan’s Medicare Proposals

Ryan’s 2011 budget plan was justifiably hammered for its Medicare provisions.  Ryan proposed to privatize Medicare, eliminating the traditional government insurance plan and instead giving beneficiaries a voucher (beginning in 2022) to enroll in private insurance plans.  Ryan 1.0 would have badly eroded Medicare’s insurance protection for beneficiaries, shifting the burden of rising medical care costs squarely onto their shoulders.  Since private insurance costs more than Medicare, it also would have increased health care spending even while reducing the federal share of that spending.

Ryan 2.0 still envisions Medicare as a voucher system, with program beneficiaries receiving defined contributions to purchase coverage, starting in 2023.  But, chastened by the political backlash against his original model, Ryan has backtracked a bit.  The new plan retains traditional Medicare as an option to compete alongside private plans.

Ryan’s Medicare plan remains highly problematic.  Under the misleading rubric of “choice,” it would shift the burden of rising costs onto elderly and disabled beneficiaries while potentially undermining the stability of traditional Medicare.  It ignores the evidence that Medicare is cheaper than private insurance and the reality that Medicare beneficiaries can already choose from a range of private plans.  It ignores the problems inherent in operating a competitive market for a population where so many people have serious illnesses and cognitive limitations.  It revives the senseless idea of raising the Medicare eligibility age, which would shift costs to states, employers, and seniors.  And its overlooks the fact that the Affordable Care Act is expected to produce substantial Medicare savings—while preserving and improving program benefits, and without shifting costs to beneficiaries.  Medicare doesn’t need the Ryan plan to constrain its spending growth—though we do need to carry out the ACA’s Medicare cost containment provisions.

Ryan’s Medicaid Proposals

Ryan’s Medicaid “reforms” have received much less attention than his proposed Medicare changes, reflecting Medicaid enrollees’ more limited political power.  That is unfortunate, because his Medicaid proposals are much more radical.  Ryan proposes to cut federal spending on Medicaid and the Children’s Health Insurance Program, as a share of national income, from 2 percent of GDP now to 1 percent by 2040.  In the first decade alone, Ryan proposes to lower Medicaid spending by over $800 billion.

Ryan does not specify how these drastic spending cuts would be achieved, other than through the conservative magic of “block grants.”  He argues that block grants would give states more flexibility to run their Medicaid programs and tailor them “to the unique needs of their own populations.”  But that promise of flexibility is an entirely inadequate substitute for the massive loss in federal financial support for Medicaid that states would suffer under the Ryan plan.  Some states would try to make up the difference—here Ryan’s budget simply shifts costs rather than cutting them—but many would not be able to.

In fact, the only feasible way to achieve such draconian savings would be to gut the Medicaid program, cutting access to medical care for pregnant women, children, the elderly and disabled, and dramatically increasing the number of low-income, uninsured Americans.  If implemented, Ryan’s budget would have devastating consequences for Medicaid.  An Urban Institute analysis of Ryan’s 2011 plan estimated that between 14-27 million Medicaid enrollees would lose coverage if Medicaid is block-granted.   Throw in the accompanying proposal to eliminate the Affordable Care Act’s subsidies to help the uninsured buy coverage, and the Ryan plan would produce a staggering loss of coverage and health security for tens of millions of Americans.

Paul Ryan has emerged as a hero among many Republicans and deficit hawks for his austerity message.  But his budget proposal does not offer a realistic blueprint for balancing budgets or controlling health care spending.  Instead, Ryan’s “responsible” plan for reducing the deficit rests on massive cuts in health care for lower-income Americans while simultaneously reducing taxes for the wealthy.

There is absolutely nothing courageous or heroic about that.

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5 Trackbacks for “Paul Ryan’s Health Care Fantasy”

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