April 4, 2011- If anything will make it easier for House conservatives to back off on shutting down the government this week, it's the prospect of a different, and much larger fight over the federally funded social safety net. House Republicans are preparing to introduce a 10-year budget Tuesday that will eliminate Medicare and replace it with a private insurance system that closely resembles the new health care law, and end Medicaid as an entitlement program all together.
This plan, which also will include major restructuring of the tax code and cap discretionary spending, will reduce the deficit by over $4 trillion in 10 years, according to House Budget Committee Chairman Paul Ryan.
Here's what this means if you're elderly, disabled, or poor.
Low-income Medicaid beneficiaries will lose their guaranteed benefits altogether. Currently, Medicaid is jointly financed by the federal government and states, which are required to provide comprehensive health care benefits to people in poverty. Ryan's plan turns the program into block grants for the states — states get a bunch of cash from the feds and have to make the best of it. For many states, that will mean severe benefit rollbacks.
Seniors, and others on Medicare, would be in a slightly different predicament. Currently seniors 65 and over are guaranteed a defined benefit program: taxpayers finance the system, and the government agrees to pay for seniors' health care services (though seniors have to pitch in too). Ryan's plan would leave that system intact for anybody currently on Medicare, or expecting to be on Medicare within 10 years. For everyone else the program would be radically overhauled. Future beneficiaries would no longer have a single payer system to rely on. Rather, they'd be given a menu of private insurance plans to pick from, and subsidies to help pay their premiums. If those premiums skyrocket, that's on them. If the insurers themselves aren't required to pay for whatever the doctor orders, then the guaranteed benefits will erode.