A Republican budget plan unveiled in the House of Representatives Tuesday would slash healthcare spending by $732 billion over the next decade, in part by reengineering Medicaid.
House Budget Committee Chairman Paul Ryan (R-WI) was the chief architect of the plan for fiscal year 2015, and its healthcare provisions are similar to his past budgets. He envisions transforming Medicaid from an “open-ended entitlement” into a block grant system that would give a fixed amount of federal money to states, which would have more control over how the program would be run.
Ryan also proposed a system of Medicare “premium support,” in which beneficiaries would receive government subsidies to help them purchase private insurance. Democrats have derided this as a “voucher” plan, saying it would lead to higher out-of-pocket costs for seniors; Republicans counter that fee-for-service Medicare is financially unsustainable, and their plan would foster more competitive insurance rates and increase consumer choice.
Deeply reducing the federal government’s contributions to Medicaid could restrict enrollment and hurt millions of seniors in nursing homes. Long-term care provider associations have spoken out against a switch to block grants in the past. Ryan and his counterpart in the Senate — Sen. Patty Murray (D-WA) — reached a budget compromise in December, creating a plan for spending through the end of 2015. Therefore, Ryan’s budget proposal is not likely to gain real traction.