Republican Congressman Paul Ryan’s 2012 budget proposal to tackle the escalating federal debt is receiving plaudits for doing something that Barack Obama and most others in Washington are afraid to do: attempt to tackle entitlement spending.
Interestingly, however, Ryan’s budget doesn’t touch Social Security, perhaps showing that he agrees with Democrats that of the three major domestic spending programs in our government, SS is actually in the best shape. But he goes hard after Medicaid and Medicare, and says that his plan cuts the spending on these two massive government health care programs for the low income and the elderly, respectively. “Cutting” is one way of putting it.
In the case of Medicaid, which as Mike Haridopolos and other Florida Legislative leaders complain, eats up a ton of the state’s budget, Ryan’s plan would be to cap the spending by providing block grants to the states. That means Florida would be given a lump sum at the beginning of the year and have to manage it until the the end of December. That’s different than right now, where the feds and the states share the costs, which have been increasing, as Americans (and certainly Floridians) are getting older and less healthy. So by capping the amount of spending, yes, you’d save money. You’d also be providing a certain percentage less health care than is currently being provided to those who can’t afford it on their own.
And Medicare? Basically, it would end under Ryan’s proposal, for all those who are under the age of 55. Beginning in 2022, those who needed to go on the government’s program would choose from private plans on an exchange. But according to the Washington Post‘s Ezra Klein, that would mean more spending for seniors. That’s because Medicare currently is cheaper than private insurance.
As everyone who reads knows, health care costs have gone up astronomically over the past decade and some say seriously threaten the fiscal health of this nation. President Obama was criticized for not fully addressing that in the Affordable Care Act of 2010, but since there are no precise and palatable ways we can drive down costs that the public is willing to accept, there haven’t been too many concrete solutions presented (although some analysts say if Americans were hit with a bill every time they left a doctor’s office they would be much more hesitant to spend on some services). The fact is, Ryan’s plan does not do anything to drive down that cost curve, but he passes the costs on to the states and the public, which certainly would reduce federal spending. As The Economist writes:
Neither block grants nor vouchers magically cures the root of rising health care costs, namely, medical inflation and rising case loads. What they do is shift the responsibility for bearing those costs to the states and to individuals. Mr Ryan rather disingenuously says his proposal would strengthen Medicaid. I guess you could call it that, if your idea of strengthening your son is to throw him out of the house at age 16 to fend for himself. States will no doubt welcome the freedom to shape Medicaid as they see fit; I doubt they will savour the need to raise taxes or slash services to cope with foregone federal funding.
Naturally, some Democrats have dissenting views, such as Tampa Congresswoman Kathy Castor, who said the Ryan plan ends “Medicare as we know it.”
We should add that Ryan’s plan also involves doing what his entire caucus voted on months ago getting rid of the Affordable Care Act outright, meaning, as the New Republic‘s Jonathan Cohn writes, no more health care for 32 million Americans.
This article appears in Mar 31 – Apr 6, 2011.
