Paul Ryan’s big, bold (bad) plan to end Medicare & Medicaid **UPDATED**

Paul Ryan apparently figured out the bad PR residue from calling his Medicare overhaul a “voucher” plan, so he’s tarted it up as “premium support,” and away we go…

The plan, which even the Wall Street Journal says would “end Medicare as we know it,” is summed up in a Ryan op-ed in the same paper as follows:

• Health and retirement security: This budget’s reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.

Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.

In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America’s seniors.

Or to put a finer point on it:

The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. Mr. Ryan and other conservatives say this is necessary because of the program’s soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016. At that pace, spending on the program would have doubled between 2002 and 2016.

Mr. Ryan’s proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a “premium support” system. Participants from that group would choose from an array of private insurance plans when they reach 65 and become eligible, and the government would pay about the first $15,000 in premiums. Those who are poorer or less healthy would receive bigger payments than others.

Dave Weigel calls it:

Ah, yes: The old promise-older-voters-nothing-will-change trick. It didn’t work on Social Security reform in 2005, but we’ll see how it works now. It’s sort of what Republicans have to do, because they beat the brains out of Democrats in 2010 over the very idea of cuts to Medicare.

And this is what Democrats were hoping Republicans would do. They greeted the release of Ryan’s 2009 “roadmap” with joy — here was the GOP, on the record, for tax increases on lower-income people and for entitlement cuts for all. The splitting-the-baby with senior citizens was expected.

(Of course, being a libertarian, Weigel sees “Democratic hackery” on the way…)
As Matt Yglesias points out, Ryan bases his budget wizardry on a highly dubious source:

One particular laugh line from Paul Ryan’s budget proposal is his citation of the Heritage Foundation as the analytic basis for his claim that it will boost growth …

… I wonder if the Heritage Foundation has ever looked at the myriad benefits of tax cuts for the rich before. It turns out they have! Specifically, they promised us that George W Bush’s tax policies would lead the country into a brave new era of prosperity.

And of course, they were dead wrong, not just about job growth, but also about revenue growth and income growth. So as Yglesias warns, you should view Ryan’s conclusions with extreme prejudice.

Ryan also pulls off a neat trick in his op-ed and budget, by recasting the other Great Society program Republicans loathe, Medicaid, as something else: welfare

• Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.

As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don’t. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.

And what does Ryan propose to do to that “welfare program”? Back to the WSJ’s Neftali Bendavid:

The proposal would also convert Medicaid, the health program for the poor, into a series of block grants to give states more flexibility. And it is expected to suggest significant cuts in Social Security, while proposing fewer details on how to achieve them.

The federal government expects to spend about $275 billion in 2011 on Medicaid, the program that provides medical care to the poor and disabled, up from $117.9 billion in 2000. The Congressional Budget Office projects Medicaid spending will roughly double by 2021.

Meanwhile, Ryan would cap the corporate tax rate at 25 percent, essentially delivering a windfall to corporations (many of whom already pay no taxes) at the expense of seniors and the poor.

Ah, conservative economics.

Steve Benen is even more blunt:

RYAN’S RADICAL, RIDICULOUS, RIP-OFF ROADMAP…. While the process of crafting a budget plan for this fiscal year implodes under the weight of GOP intransigence, today also happens to be the day next year’s budget fight begins in earnest. And if you think the current fight is a mess, prepare to have Republicans take your breath away.

And if you’re a disabled senior on Medicaid, relying on an oxygen tank, that expression should probably be taken literally.

Today, House Budget Committee Chairman Paul Ryan (R-Wis.) unveils his plan for fiscal year 2012. He promised a truly radical approach to our entire system of government, and he wasn’t lying — Ryan’s budget is based on his radical “roadmap” and effectively rewrites the American social contract.

Medicare would be eliminated and replaced with a voucher system. Medicaid would be gutted and sent to the states as a block grant. The Affordable Care Act would be scrapped, tax rates on corporations and the wealthy would be slashed, and all told, Ryan’s plan intends to slash roughly $6 trillion from the federal budget over the next 10 years.

This is madness.

Ryan will sell his madness … where else … at the petroleum-funded American Enterprise Institute today. And yes, there is a web video. There always must be a web video.

BTW, Ryan glosses over his plans for Social Security, saying in his op-ed only that it must be reformed. Can’t wait to see how Wall Street will benefit from that one, once he spells it out.

UPDATE: Krugman pounces on Ryan’s Heritage-tested unemployment projection:

Except briefly during the Korean War, the United States has never achieved unemployment as low as Ryan and co. are claiming. The Fed believes that the lowest unemployment rate compatible with price stability is between 5 and 6 percent — that is, twice what Ryan is claiming he will achieve.

This is ridiculous; it’s megalomaniacal. If Obama tried to claim that his policies would achieve anything like this, he’d be laughed out of office.

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2 Responses to Paul Ryan’s big, bold (bad) plan to end Medicare & Medicaid **UPDATED**

  1. Flo says:

    Expose Privatizing Ryan. He makes permanent all Bush tax cuts and repeals the Affordable Health Care Act, while turning Medicaid over to Rick Scott, et al. Yes, this is madness.

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