Paul Ryan, Mitt Romney’s vice-presidential pick, would fundamentally remake federal health and long-term care services for the frail elderly and adults with disabilities. He’d completely restructure Medicare, slash funding for Medicaid, and likely abolish most of the other safety net programs that this vulnerable population has come rely on over the last half-century.
It is fair to say that no major party candidate for national office in a half-century would do more to change the way seniors and those with disabilities get care than Ryan. Here is some of what he’d do:
Medicare: Ryan would effectively end the current Medicare system for future retirees. He’d replace it with a government subsidy that seniors would use to buy their own health insurance, a system known as premium support. In one version, seniors would still have the option to buy into traditional Medicare, but in most others, they would not.
The government subsidy level would grow more slowly than the growth of medical costs. As a result, if health costs don’t slow, seniors would end up paying a much larger share of their health expenses than they do now. Today, the federal government pays about 70 percent of Medicare costs while seniors themselves pay about 30 percent. In one version of Ryan’s plan, seniors would pay 70 percent.
If the subsidy is big enough and if a system is put in place that allows seniors to easily buy insurance on the individual market (something like the health exchanges in the 2010 health reform law), premium support can work. But, elsewhere, Ryan has proposed repealing those health exchanges and is promising major budget savings from Medicare reforms, which would seem to preclude large subsidies.
Medicaid: The joint state/federal health program for the poor is also the nation’s largest single payer of long-term care services. One third of its budget–or $120 billion–goes to long-term care.
Today, the federal government pays just under 60 percent of all Medicaid costs, and in some states it pays more than 70 percent. As Medicaid costs rise, the federal payment automatically increases. But Ryan would end that system. Instead, the feds would decide each year how much to spend on Medicaid and send those dollars to the states as a block grant. States would get much more flexibility in running their programs, but they’d also get lots less money.
The Congressional Budget Office projects Ryan’s plan would reduce federal Medicaid spending by $800 billion over the next 10 years. By 2040, federal spending for Medicaid would be cut in half. As a result, Medicaid-funded long-term care services would be forced to compete for shrinking resources with health programs for poor children and their mothers. Nursing home payments would be slashed, home care would be limited, and the level of services would be vastly diferent from state to state.
Non-Medicaid Services: In order to live safely and comfortably at home, frail seniors need a package of supports, including transportation, meals, information services, and appropriate housing. In recent years, low-income seniors have come to rely on the government to fund this assistance. These programs have already been under great pressure–Meals on Wheels, for instance has not had a budget increase in three years.
While Ryan’s budget doesn’t say so explictly, it implies that all of these federally-funded programs would be eliminated. For instance, the most recent House budget, which Ryan efffectively wrote, would cut the rest of government (other than Medicare, Medicaid, Social Security, and interest on the debt) by two-thirds by 2050. But he’d also increase defense spending. Such a plan would leave no money–literally no money–for any of the rest of government, from the FBI to the national parks to NIH to senior services.
Social Security: While Ryan has not talked about it lately, he was one of the major suporters of Social Security private accounts back in 2004. It wouldn’t surprise me to see this idea resurface in a Romney-Ryan Administration.
Much of Ryan’s spending agenda is driven by deep tax cuts. The House budget would cut federal revenues by $4.5 trillion over the next 10 years though Ryan says much of that would be made up by eliminating tax deductions and credits.
One caveat: Since 2008, Ryan has proposed several different budget plans, so it is a little hard to identify just what options Ryan prefers. But his commitment to low taxes and small government is unshakable. There is no doubt about the direction Paul Ryan would take federal health and long-term care programs.