GOP plan would revamp Medicare, Medicaid

WASHINGTON — House Republicans set up a politically defining clash over the size and priorities of government Tuesday, unveiling a budget plan that calls for both unprecedented spending cuts and a fundamental restructuring of taxpayer-financed health care for the elderly and the poor.

The plan would slash federal spending by $5 trillion or more over the coming decade. It would leave Social Security untouched but shift more of the risk from rising medical costs from the government to Medicare beneficiaries. It also calls for sharp cuts to Medicaid health care for the poor and disabled and to food aid for the poor.

Dubbed the “Path to Prosperity,” the proposal by House Budget Committee Chairman Paul Ryan, R-Wis., also calls for dramatically overhauling the complicated and inefficient U.S. tax code. It would scrap numerous tax breaks and loopholes in exchange for reducing the top income tax rate for both individuals and corporations from 35 percent to 25 percent.

Washington Democratic Party Chairman Dwight Pelz wasted no time blasting U.S. House Budget Chairman Paul Ryan’s 2012 Republican budget blueprint Tuesday declaring, “Today, the Republicans in Congress have proposed to outlaw retirement for working Americans.”

Pelz took aim at Ryan’s proposal that beginning in 2021, Americans would have to wait until the age of 69 1/2 to qualify for senior health benefits, and then would be eligible for a much-diminished version of Medicare.

“Americans would no longer receive the promise of full health coverage at age 65,” he said. “Instead, they would wait until 69 1/2 and then receive a limited voucher to buy private health insurance from the private market.”

Though Ryan’s plan does not specifically address changes in Social Security, Pelz noted that some Republicans are also pushing to move the age of eligibility for Social Security to 70.

In addition, the budget calls for cutting Medicaid by as much as $1 trillion. Because Medicare does not cover long-term care such as in lengthy nursing home stays, some 14 million seniors and people with disabilities instead rely on Medicaid.

“For 70 years, America has been spared the pain of watching seniors die in poverty,” Pelz said. “We don’t see old people begging on the streets. Our parents do not move in with us because they’re destitute. The elderly have dignity in America because of Social Security, Medicare and Medicaid.”

Casey Bowman, spokesman for U.S. Rep. Jaime Herrera Beutler, R-Camas, said the congresswoman would have no comment on the specifics of Ryan’s sweeping budget plan until she has a chance to study it.

“It’s clear we can’t keep spending money we don’t have, and she’s happy Chairman Ryan is taking our crushing debt crisis -seriously,” Bowman said.

— Kathie Durbin

Democrats launched a furious counterassault on the health care proposals.

“They’re ending Medicare as we know it. They take away the Medicare guarantee for seniors,” said Rep. Chris Van Hollen, D-Md. “All the risk of increased costs will be borne by seniors.”

A Congressional Budget Office analysis released late Tuesday also showed Ryan’s budget would leave in place roughly $500 billion in Medicare cuts that were part of President Barack Obama’s new health care law. Republicans blasted those cuts in their successful campaign to take back control of the House. A spokesman for Ryan said the savings would be plowed back into Medicare.

But the GOP budget would also repeal Obama’s plan to gradually close the Medicare prescription drug coverage gap, known as the “doughnut hole.”

Despite its huge cuts, Ryan’s plan still can’t claim a balanced budget by the end of the decade because of promises to not increase taxes or change Medicare benefits for people 55 and over. After six years, annual deficits are projected to fall to the $400 billion range, enough to stabilize the nation’s finances and prevent a European-style debt crisis that could force far harsher steps, Ryan said.

Under the arcane congressional budget process, the GOP plan is not actual legislation. It does provide a theoretical basis for action, but with Democrats controlling the Senate, the GOP plan serves more to frame the debate heading into next year’s election than represent a program with a chance of passing Congress and becoming law.

“For too long, Washington has not been honest with the American people. Washington has been making empty promises to Americans from a government that is going broke,” Ryan said. “The debt is projected to grow to truly catastrophic levels in the near future, leading to an economic collapse and a diminished future.”

Fundamental changes

The GOP plan would fundamentally restructure the nation’s biggest health programs in a bold stroke that could make Obama’s insurance overhaul look like baby steps.

Obama’s law expanded coverage to about 30 million people who don’t have it now. Ryan’s plan not only would repeal Obama’s expansion, but it would recast Medicare and Medicaid, which currently help pay medical bills for some 100 million Americans.

People now 54 and younger wouldn’t get to go into the same Medicare program as their parents and grandparents upon retirement. Instead, they would get a voucher-style federal payment to purchase coverage from a choice of regulated private plans.

Poor people would no longer have a right under federal law to get health care through Medicaid. Instead, Washington would send each state a lump sum to spend on medical care, nursing homes and other health services for the poor and disabled. In an economic downturn, a state hurting for cash might decide to stop accepting new applications for Medicaid.

“These sound like technical solutions to budget problems, but what’s really starting to be discussed in Washington are fork-in-the-road differences about the future of Medicare and Medicaid,” said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan information clearinghouse on the health care system. “Should we stick with the traditional Medicare program where you have guaranteed benefits? Or should the benefit depend on the plan you get in the marketplace?”