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Republicans Budget Framework Proposes Major Reforms to Medicare and Medicaid

Tuesday, April 05, 2011

House Budget Chairman Paul Ryan (R-WI), a confirmed speaker for the ASA 2011 Legislative Conference, has released a budget framework for the 2012 fiscal year federal budget.  Republicans are referring to this budget framework as “The Path to Prosperity.”  The proposed budget cuts $6.2 trillion from President Barack Obama’s budget proposal and $5.8 trillion over the Congressional Budget Office (CBO) current-policy baseline over ten years.  View the full proposal. With the release of this budget proposal, Chairman Ryan released a 3-minute video outlining the current debt and his plan forward. The video can be viewed here.

This proposal calls for the repeal of the Patient Protection and Affordable Care Act (PPACA) and makes significant reforms to the Medicare and Medicaid system. 

Medicare Proposals:  Chairman Ryan’s proposal would make no changes to the Medicare benefits for individuals who are currently 55 years old.  Those who are younger than 55 would be placed into a new system.  This proposal would provide a Medicare payment and a list of guaranteed coverage options from which recipients could choose a plan that best suits their needs.  Individuals would be able to choose a plan much in the same way that members of Congress choose their health insurance.  Additional financial assistance would be provided for lower-income individuals and those with greater health risks.  The plan also includes medical liability reform and proposes caps on non-economic damages.  Most significantly for physicians, the plan suggests a fix for the Medicare physician payment SGR formula for the next ten years, until the new Medicare system is in place.  Medicare savings that were going to be used for the implementation of PPACA, would now be used to solidify the Medicare trust fund. 

Medicaid Proposals:  The largest change in the House Budget proposal would be a conversion of the federal share of Medicaid spending into a block grant tailored to meet each state’s needs that would be  indexed for inflation and population growth.  The federal government would no longer determine program requirements and enrollment criteria.  This plan would save $750 billion over ten years. 

The proposed budget also includes cuts to non-security discretionary spending, the elimination of many tax loopholes, and a reduction in the corporate tax rate. 

The framework is not a piece of legislation that appropriates money. The budget resolution is a framework for other committees’ use when determining levels of spending for appropriation bills that cover their jurisdiction.  The framework is intended to provide guideposts for the total amount of spending for budgets over the next ten years.  Absent agreement with a competing Senate budget resolution, not yet proposed, the document is not binding on Congress.  At the same time, the bold nature of the proposed House budget signals major spending priorities and cuts for the next decade that could guide House committee activity for coming years.    


Click here to view the Republican budget proposal.

Click here to view the video Budget Chairman Paul Ryan released with his new budget proposal.


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