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What If Ryan Had Won? The Republican Budget Proposal

Posted on Mar 19, 2013 by Ailee Slater ()  | Tags: budget, medicaid, medicare, obamacare, Paul Ryan

Obamacare was signed into law on the 23rd of March, 2010. Since that time, the bill has survived filibuster threats, congressional debate, and challenges in the Supreme Court. Three years later, Republican legislators are still trying to kill Obamacare.

The most recent attacks on Obama's Affordable Care Act have come during U.S. budget negotiations. At the moment, the White House is working overtime to narrow massive budget deficits and prevent the defunding of defense, education and other federal programs. Health care spending has been a major consideration during these budget talks, and Republicans are especially keen to save money by repealing entire chunks of Obamacare. No Republican proposal does this more so than the recent budget plan from former Vice Presidential candidate Paul Ryan.

Paul Ryan's budget proposal, released last week, professes to balance the U.S. budget in ten years by cutting $4.6 trillion from the national deficit. The plan advises tax reform, cuts in federal welfare programs, and of course, changes to health care.

Throughout his proposal, Ryan refers to the Affordable Care Act as a bureaucratic mess; failing the American people by tackling care and insurance with a one size fits all approach. Ryan says that at 2,700 pages, Obama's legislation is both drastic and unnecessary, and that such an increase of federal control will only lead to financial losses in administrative costs, and a decrease in healthy competition on the medical insurance and health care marketplace.

Financially speaking, Ryan points to research from the non-partisan Congressional Budget Office (CBO) showing high expectations for public health care spending in the near future. The CBO has estimated that in the next ten years, Medicare costs will grow by 6.2 percent, and by the year 2085, the federal government will be spending 13 percent of the United States' GDP on the Medicare program. Similarly, the CBO estimates that Medicaid will grow nearly ten percent over the next decade, and may cost as much as $800 billion per year in 2023.

Paul Ryan wants to stop this spending by repealing Obamacare, and giving states more flexibility to tailor their own Medicaid programs for low income Americans that qualify. In his budget proposal, Ryan suggests that Medicaid should become a federal grant program; giving states chunks of money without setting regulations on insurance providers. At the moment, Medicaid law mandates that insurers must provide certain services; contraception and ambulance rides, for example. Under Ryan's proposal, states would have the opportunity to set their own Medicaid rules while still enjoying federal funds.

Obamacare offers federal aid to anyone who is low-income, wants to buy insurance and yet does not qualify for Medicaid. Because these federal subsidies will cost the government money and lead to further bureaucratic and administrative procedures, Ryan suggests scrapping this federal insurance aid. Although this may seem an obvious loss for Americans with limited financial resources, Ryan argues that imposing more federal controls upon the private insurance marketplace will hurt business and increase taxes for everyone in the long run.

Along with changes to Medicaid, Ryan's budget proposal also addresses Medicare. The proposal calls for reforms to Medicare, while still emphasizing the importance of federal involvement in health care for seniors. To begin, the Ryan plan calls for a major change beginning in 2024: At that point, all workers born after 1958 would be given the choice to either join Medicare or get onto a private insurance plan. With this system, seniors would have a larger choice of insurance services to meet their particular needs.

Interestingly, Ryan's Medicare proposals rely on a system very similar to Obamacare, wherein insurance providers compete in an online marketplace, and seniors can shop for insurance coverage through this exchange. In Ryan's system, Medicare would set up a "benchmark plan" by which other insurance plans could model their services; seniors choosing a plan more expensive than the benchmark insurance coverage would pay additional costs out of pocket, while seniors choosing a less expensive plan would receive a rebate from the federal government.

Unlike Obamacare, Ryan's plan would allow for more competition on the Medicare insurance marketplace. Whereas right now rates for Medicare payments are based on a pre-determined formula from the federal government, under the Ryan budget proposal, natural competition would keep rates and costs growing naturally. Paul Ryan recognizes that this sort of free market system could lead to difficulties for low-income Americans if Medicare costs rise too quickly, and so the budget plan stipulates that Medicare insurers are only allowed to increase rates as fast as the GDP growth rate plus 0.5 percent.

Another Medicare change under the Ryan budget proposal creates a less comprehensive version of Obamacare's mandate against denying insurance based on pre-existing and chronic conditions. Ryan's plan states that Medicare insurance plans would be "unable to impose prohibitively high costs on patients with chronic health problems," yet without a method to calculate income and projected medical needs, it's hard to imagine how an insurer can define what is or is not a prohibitive cost.

Ryan's plan would also ban the use of Independent Payment Advisory Boards. These boards are an Obamacare creation meant to provide a non-industry-connected group to evaluate Medicare spending; however, their inclusion in the Affordable Care Act has been firmly contested by Republicans who claim that use of such payment boards will lead to unethical limits on care.

Health insurance changes are only one part of Paul Ryan's budget proposal, and yet the call for an entire repeal of Obamacare is drastic. Republicans have admitted, however, that the Ryan plan is meant as less of an actual bill to be debated, and more of a starting point to express where they want budget negotiations to go. It does seem odd, though, that after six years of writing and arguing and editing and discussion, and the fact that the American people have since re-elected the man as President, Barack Obama's flagship health care legislation is still up for debate. Such is the nature of democracy.

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