Republican plan for Medicare/Medicaid will only shift costs

Update: Don’t forget that not only is the Republican plan immoral, it’s based on truly ridiculous assumptions, including 2.8 percent unemployment (which the Fed would never allow because of the inflationary pressures such unprecedented numbers would bring), tax revenue that increases despite massive cuts, $150 billion a year in economic growth.

Update 2: Even with those ridiculous assumptions, the CBO projects that the Republican’s plan will add more to the debt than if doing nothing. The budget-busting tax breaks proposed by Republicans cost more in the first decade than the plan saves by decimating Medicare and Medicaid.

The new budget proposed by Republicans in the House would balance the budget on the backs of the poor and the elderly. Medicare and Medicaid would be privatized and turned into block grants – moves that could save the federal government a lot of money, but would do nothing to actually lower health care costs. As a result, the Congressional Budget Office said in a preliminary analysis of Rep. Paul Ryan’s radical proposal:

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, the CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health-care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.

Okay, that’s kind of dense. Let’s put that in English: Compared to current Medicare rates, the Republican plan would result in older American’s paying 2.7 times the out-of-pocket expenses. Could you afford to pay almost three times what you’re paying now for health care? Could your mom?

Medicaid, which provides health care for both the poor and the elderly (much nursing home care  is covered under Medicaid), would become a block grant handed over to states to handle as they see fit. The CBO acknowledges that the greater flexibility could lead to savings, but not enough to offset the reduction in spending. The CBO warns that the proposal would lead to lower reimbursement rates (already so low in some states that it’s practically impossible to find a doctor willing to accept Medicaid patients), greater eligibility requirements (in Virginia, only the most destitute adults are currently eligible) and reduced coverage – or greater contributions from the state itself (unlikely).

As Ezra Klein put it, this is nothing more than cost shifting: “Poor people and seniors don’t need less health care because Medicare and Medicaid are providing less health care.”

Republicans have put their cards on the table. Americans need to take a good, long look at those cards. In sum, the Republican plan is to do nothing about lowering health care costs other than making the elderly pay more. In the meantime, they want to cut the top tax rate from 35 percent to 25 percent.

Tax cuts for the wealthy and service cuts for the poor and the elderly.

Americans should not stand for this.

One Response to Republican plan for Medicare/Medicaid will only shift costs

  1. Sandi Saunders says:

    God, how I wish I could say I was surprised. How long have we been saying this is what they would do if given the chance? Why people throw away what little safety nets we have is beyond me. We need solutions not more problems. This is just sad.

    So glad you are blogging, I miss you…This is great!

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