Monday, May 9, 2011

Congressional Budget Office (CBO) Report Analyzes Impact of the Ryan Budget’s Plan for Medicare and Medicaid

According to a recent non-partisan CBO report, with some exceptions, the Ryan Budget would cause most Federal government programs to literally cease to exist.  The report also reveals that his plan envisions additional Medicare cuts that were not disclosed in his official proposal.  Moreover, the proposal to privatize Medicare with “premium support” and its Medicaid block grant proposals were found to substantially differ from and have much deeper cuts than the so-called “Ryan-Rivlin” plan that was rejected last fall as “too severe” by the Bowles-Simpson fiscal commission.

Medicare---Welcome to the Wonderful World of the Health Care Plan Free Market:  According to a posting by Robert Greenstein on the Center on Budget and Policy Priorities’ website (, for Medicare the  plan would raise the age at which people become eligible from 65 to 67, even as it repeals the health reform law's coverage provisions.  This means 65- and 66-year-olds would have neither Medicare nor access to health insurance exchanges in which they could buy coverage at an affordable price and receive subsidies to help them purchase coverage if their incomes are low. 

This change, which is not mentioned in the 73-page booklet on his plan that Chairman Ryan released, would put many more 65- and 66-year-olds who don't have employer coverage and can't afford insurance into the individual insurance market — where the premiums charged to people in this age group tend to be very high — leaving them uninsured.  People of limited means, such as those who are trying to get by on incomes as low as $12,000 a year in today's dollars, would be affected most harshly because they wouldn't be able to afford private coverage.

          In another report, the Center on Budget and Policy Priorities also estimated that out-of-pocket medical costs would skyrocket for low-income seniors and “dually eligible” people with disabilities under the Ryan plan.  This would be because the Ryan budget would eliminate supplemental Medicaid coverage, except for long-term care services and support and replace it with a medical savings account.

          To read this entire report, go to:

Wait, There’s More---Medicaid:  For Medicaid, the CBO report similarly concludes that the Medicaid block grant amounts would grow each year only with inflation and U.S. population growth, which is roughly four percentage points less than current projected annual growth in Medicaid.  CBO found that Federal funding for Medicaid would fall 35 percent by 2022 — and 49 percent by 2030 — far below the levels the federal government now is projected to provide for the program.  

The CBO report makes clear that unless states made up the difference, the measures they would have to take as a result of this large loss of Federal funding would include cuts in eligibility (leading to more uninsured low-income people), cuts in covered services (also leading to more underinsured low-income people), and/or cuts in already-low payment rates to health care providers, which would cause doctors, hospitals, and nursing homes to withdraw from Medicaid and thereby reduce beneficiaries' access to care.

To read the entire report, go to:

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