Ryan believes that he can save $770 billion over 10 years if Obamacare is repealed. All those Obamacare tax increases would be repealed too, and his proposal includes sending Medicaid block grants to states. This begs the question of where Ryan finds all those savings? Especially since without mandated insurance, there are still going to be millions of people uncovered.
The uninsured aren’t going to just disappear, and there are at least 20 million of them. And they get sick. When they can’t pay the bill, government has to step in and pay it anyway.
Still, Ryan’s point is valid.
Rolling back President Obama’s controversial healthcare reform plan remains a key to balancing the U.S. budget, Rep. Paul Ryan, R-Wisc., said Sunday.
Ryan, the unsuccessful Republican candidate for vice president in 2012, said on “Fox News Sunday” he was particularly disturbed about Obama’s strategy of qualifying millions of people for Medicare coverage.
“We think the ‘Obamacare’ expansion of Medicare is reckless,” said Ryan. “We are pushing people, 20 million people, into a program that’s failing. More and more doctors and hospitals don’t even take the program.”
Ryan, a leading congressional budget hawk, told Fox the GOP preferred to see individual states get more freedom to customize their Medicaid programs for low-income residents. He contended his plan would result in huge savings by blocking an equally huge expansion of entitlements.
“We want to give states … the tools they need to make these benefits work for their populations and we don’t want to push more people into a failing program,” Ryan said. “By not pushing people into this failing program, we do save those kinds of dollars.”
The Medicaid expansion should have been phased in over several years — if at all. It is a classic illustration of what is wrong with the Affordable Care Act; it tries to do too much, too soon, with the consequences poorly thought out and foreseen.
Paul is absolutely right that placing millions of people in a program already broken is going to lead to catastrophe. That goes double for pushing people on to the state exchanges that will only add to the confusion. But it’s still a question of how much savings will be realized if Obamacare is repealed.
That’s why Ryan’s budget proposal seeks to slow the increase in government spending from 4.9% a year under Obama to 3.4%.
Ryan, the Republican vice presidential nominee in 2012, said the extra $600 billion in new tax revenue that Congress agreed to in January will help achieve a balanced budget in 10 years.
“Instead of growing spending at 4.9 percent” annually, “we grow spending 3.4 percent” so “the result is a $5 trillion” cut in the increase of spending over 10 years, he said.
Ryan’s plan assumes that the Democratic-controlled Senate joins the Republican-run House in repealing the health-care law that is set to be implemented next year. Ryan said the plan would take money designated for expanding Medicaid, to provide more insurance to low-income people, and give it to states as block grants to provide coverage themselves. That would save $770 billion in 10 years, he said.
“By repealing Obamacare and Medicaid expansions that have not yet occurred, we are preventing the explosion of a program that is already failing,” Ryan said.
Under the health-care law, the expanded Medicaid program would include people with incomes of as much as 130 percent of poverty. The federal government would pay the entire cost of the expansion until 2017; after that, states would become responsible for the first 10 percent of added cost.
Some states with Republican governors or legislatures have balked at agreeing to the expansion of the Medicaid program, which is financed by state and federal funds.
The House wants to “give the states the tools they are asking for” to create programs to “make these benefits work for their populations,” Ryan said.
Additional savings from repealing the health-care law would be used to shore up the Medicare trust fund, to extend its solvency past 2024.
“Obamacare does damage to Medicare,” Ryan said. “It is going damage to the current program for seniors.”
Ryan said his budget, like his plan last year, would propose giving new Medicare beneficiaries, now younger than age 55, the option of purchasing private insurance with a government subsidy instead of the traditional Medicare plan.
“Let’s convert Medicare into a system like the one I have as a congressman” that provides a variety of “guaranteed coverage options,” he said.
One and a half percent per year doesn’t seem like much but when you consider cost of living increases for many federal programs (unless that formula is changed as some are advocating), the cut in the rate of spending will fall on fewer programs, thus concentrating the pain.
And make no mistake, pain there will be. America has been on a 40 year binge and getting back to fiscal sanity is going to entail sacrifice. Shrinking government is not going to be easy but there’s really no alternative if we are ever going to balance the budget and begin to address the massive debt we’ve foolishly acquired.