Paul Ryan's Plans for (Destroying) Medicare and Medicaid

Ezra Klein explains What Paul Ryan’s budget actually does. "Paul Ryan’s plan for Medicare and Paul Ryan’s plan for Medicaid rely on the same bait-and-switch: They use a reform to disguise a cut.

In Medicare’s case, the reform is privatization. The current Medicare program would be dissolved and the next generation of seniors would choose from Medicare-certified private plans on an exchange. But that wouldn’t save money. In fact, it would cost money. As the Congressional Budget Office has said (pdf), since Medicare is cheaper than private insurance, beneficiaries will see ‘higher premiums in the private market for a package of benefits similar to that currently provided by Medicare.’

In Medicaid’s case, the reform is block-granting. Right now, the federal government shares Medicaid costs with the states. That means their payments increase or decrease with Medicaid’s actual rate of spending. Under a block grant system, that’d stop. They’d simply give states a lump sum at the beginning of the year and that’d have to suffice. And if a recession hits and more people need Medicaid or a nasty flu descends and lots of disabled beneficiaries end up in the hospital with pneumonia? Too bad.

In both cases, what saves money is not the reform. It’s the cut. For Medicare, the cut is that the government wouldn’t cover the full cost of the private Medicare plans, and the portion they would cover is set to shrink as time goes on. In Medicaid, the block grants are set to increase more slowly than health-care costs, which is to say, the federal government will shoulder a smaller share of the costs than it currently does. The question for both plans is the same: What happens to beneficiaries?"

He also is Giving Paul Ryan Credit "for doing what he promised and taking on entitlements despite the possible [political] cost." Because, "they’re endorsing a plan that is the single least popular option for balancing the budget — below raising the retirement age, cutting defense spending or raising taxes on the rich."

Kevin Drum wrote Paul Ryan's Voucher Plan for Medicare "But I'll just say this in advance: I'm pretty sure that Ryan is going to loudly and relentlessly insist that his Medicare proposal isn't a voucher plan. I'm not sure why, but I assume that 'voucher' must have polled poorly in some recent Frank Luntz poll or something... You can like or dislike the plan all you want, but it's based on giving you money and then sending you into the private market to buy your own health insurance. That's a voucher, no matter how many times Ryan says it isn't."

Mathew Yglesias asks Will Paul Ryan Propose a Giant Tax Hike To Make Tax Cuts For the Rich Affordable? "But what Hulse doesn’t report on is Ryan’s thinking about tax reform. This is an important element of Ryan’s original ‘roadmap’ plan that’s never gotten the attention it deserves. But according to a Center for Tax Justice analysis (PDF), even though Ryan features large aggregate tax cuts, ninety percent of Americans would actually pay higher taxes under his plan:"

Update: And Krugman points out that "But what the GOP plans to offer is a plan that broadly resembles Medicare Advantage — a plan that not only failed to reduce costs, but actually ended up substantially increasing costs." This is the thing that Health Care Reform eliminated (because it was more expensive) and Republicans yelled that Democrats were cutting a $500 billion from Medicare. Well now Republicans are proposing to really cut Medicare. Hypocrites.