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House Republicans Propose Remake of Medicare and Medicaid

Rep. Ryan's plan would repeal health care reform law

Medicaid

The Ryan plan also would fundamentally change the Medicaid program, which pays for nursing home coverage for many seniors. Instead of offering an entitlement to nursing coverage for those who qualify financially, the federal government would give states a lump sum to run the Medicaid program and decide who is eligible. That would protect the federal government from risk as health costs rise. But Rother says the federal block grant wouldn't keep up with costs, so many states would end up cutting back on Medicaid benefits.

Edward Coyle, head of the Alliance for Retired Americans, said he didn't want to leave long-term care decisions to states that have been cutting their budgets.

"[Ryan's] plan tries to hide its cold-hearted details behind seemingly innocuous buzzwords like 'vouchers' and 'block grants,' " Coyle said. "But the reality is that 'voucher' is Ryan-speak for turning Medicare over to the big insurance companies, and 'block grant' is Ryan-speak for saying that Medicaid should be run by Republican governors across the country."

Medicare

While Americans 55 and older would stay in the traditional Medicare program, young people eventually would instead get help buying health insurance coverage through private insurers. Rother said the federal support likely wouldn't keep up with rising health care costs, so many seniors would end up only with enough aid to join HMOs or buy high-deductible plans that pay only for the more catastrophic illnesses.

"It shifts the risks of cost growth off the federal government and onto household budgets," Rother said.

Max Richtman, executive vice president of the National Committee to Preserve Social Security and Medicare, said the vouchers save the government money precisely because they don't keep up with health costs. The plan "will send this nation back to a time before Medicare was enacted, when over one-half of the senior population had no health care coverage at all," Richtman said.

Next: Will there be changes to Social Security? >>

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