Rep. Paul Ryan (R-WI) submitted a proposed budget calling for large cuts to Medicaid and partial privatization of Medicare on Tuesday. The budget — which includes repealing the Affordable Care Act — would save the federal government $2.5 trillion in healthcare costs over the next decade, according to Ryan.
Ryan’s proposed cuts arrive as providers brace for a 2% reduction in Medicare payments as a result of automatic spending cuts. The Ryan plan would additionally narrow reimbursements to nursing homes and other providers serving seniors and the poor.
As expected, Ryan’s budget calls for creating a Medicare voucher program. This would go into effect for those who are currently 54 or younger, allowing them to get premium support to purchase private insurance in place of traditional Medicare once they become eligible for the program. Traditional fee-for-service plans would remain an option as well.
In opposing Ryan’s budget, Medicare Rights Center President Joe Baker argued that Medicare controls healthcare costs more effectively then private health plans.
“Medicare spending is expected to grow at rates of 3.9% per person per year over the next 10 years compared to 5% for private health insurance,” Baker said, citing figures from the Kaiser Family Foundation.
Ryan also proposed repealing the ACA and ending its optional Medicaid expansion, and turning Medicaid into a block-grant program. Under this system, states would receive a federal Medicaid contribution pegged to inflation and population growth, and would have greater flexibility in determining how the program is run. This would save the federal government $756 billion over 10 years, Ryan’s figures showed. However, his plan could result in as many as 27 million people losing Medicaid eligibility, according to Urban Policy Institute research cited by The Hill.
Senate Democrats are expected to unveil their budget proposal later this week, with the White House budget to follow in early April.