Threats to Medicare and Medicaid
This spring, the House of Representatives passed a budget proposal that would END MEDICARE AS WE KNOW IT and make significant cuts to Medicaid that will leave millions of seniors, children and disabled without access to the care they need. Instead of focusing on reforms that will reduce cost and improve care, these proposals shift the cost onto those that can least afford it. The Affordable Care Act (ACA), calls for innovation in delivering care to reduce the cost and increase the quality of care patients receive. However, these plans call for the elimination of the ACA, effectively ending attempting to reel in the ever expanding cost of providing health care.
The plan replaces Medicare with a voucher system and cuts reimbursement to providers. Medicare would change from a “defined benefit” system, in which the government pays providers the cost of covered services, to a “defined contribution” system, in which seniors receive a voucher to purchase coverage in the private marketplace. Under a voucher system, seniors would pay for all costs beyond the voucher’s value. The value of vouchers would be pegged to GDP. Health care costs grow at a faster rate than GDP, and so, seniors would pay an increasing share of the costs. According to the Congressional Budget Office, seniors would spend over two-thirds of their income on health care. As a result, many would drop their coverage.
This plan also cuts Medicaid spending by a third by 2021 by turning it into a block-grants program. States would receive a fixed amount of money and each state would determine eligibility and services offered. This would also end health reform’s key provision of expanding Medicaid to 133% of federal poverty level by 2014, which would have insured another 16 million Americans. As states lose federal Medicaid funding, they will begin to deny benefits and limit access. Many of the previously insured will be unable to pay for private insurance. An estimated 44 million people will lose access to health insurance when states drop their Medicaid enrollment.