Wisconsin Rep. Paul Ryan officially unveiled his much-anticipated 2012 budget yesterday, which he dubbed the “Path to Prosperity,” which includes ambitious plans to dismantle Social Security, Medicaid and Medicare. National media tripped all over itself calling it a “conversion” of traditional Medicaid into a voucher program rather than actually report it as an elimination of the program all together, even though it actually changes the system from a national coverage plan to a voucher system that leaves seniors on their own to find private insurance instead.
Democrats reacted immediately to the plan, being sure to call it for what it was — a Path To Poverty. The “prosperity” alluded to in Ryan’s plan appears to be limited to those who are healthy and financially stable. But Ryan will be able to claim “bipartisan support” anyway, thanks to an attaboy accolade from Independent Senator Joe Lieberman, who is not running for reelection.
“I thank Chairman Ryan for having the courage not just to talk frankly about the danger America’s national debt poses to the American people, but also to propose a comprehensive program to cut the national debt,” Lieberman said in a statement. “One does not have to agree with all or most of Chairman Ryan’s proposals to be able to applaud his serious commitment to reduce the debt that threatens our nation’s future.
“I look forward to reading and studying Paul’s proposals. I hope it will begin an open and honest national conversation about exactly what we can do together to bring our government’s books into balance,” Lieberman added.
But not even a lame duck Independent senator could actually bring himself to praise the actual details of the program, only the “courage” Ryan had in proposing something that is destined to balance the budget by refusing to care for a large majority of the senior population. But not this generation, of course. Ryan’s proposal would exempt anyone aged 55 or older from participating in the new “voucher” version of Medicare, a sure sign that even the Congressman himself knows that his plan is so poisonous that the Republican party would lose most of the senior voting block they rely on in order to get into office.
But how bad is Ryan’s plan? Medicaid, a necessary safety net for low income adults, would have its funds capped and doled out to the states to allocate as they see fit. Ryan has no answer to what happens when a state runs out of funds, apparently thinking “Well, then I guess those people will just have to stay sick” makes for bad PR.
Medicare, the program most seniors rely on for medical insurance, would be dissolved and instead each senior would be given a voucher to be used when purchasing private insurance plans. With expensive insurance plans, they can be denied due to preexisting conditions if the party continues dismantling the reforms that were passed during the health care law of 2010.
What does this mean for seniors? According to the latest report from the Congressional Budget Office, nearly all of their income would then go to paying for health care.
Representative Ryan would replace the current Medicare program with a voucher for people who turn age 65 in 2022 and later. This voucher would be worth $8,000 in for someone turning age 65 in that year. It would rise in step with with the consumer price index and also as people age. (Health care expenses are higher for people age 75 than age 65.)
According to the CBO analysis the benefit would cover 32 percent of the cost of a health insurance package equivalent to the current Medicare benefit (Figure 1). This means that the beneficiary would pay 68 percent of the cost of this package. Using the CBO assumption of 2.5 percent annual inflation, the voucher would have grown to $9,750 by 2030. This means that a Medicare type plan for someone age 65 would be $30,460 under Representative Ryan’s plan, leaving seniors with a bill of $20,700. (This does not count various out of pocket medical expenditures not covered by Medicare.)
Maybe $21,000 doesn’t sound like that much money? Well, assuming that Social Security stays steady, the average senior would be bringing in $32,000. If that is their only income, that senior would then have about $900 a month to pay for housing, food, utilities, gas, and possibly even more medical expenses.
And this assumes that Republicans haven’t done away with Social Security altogether by then.
But maybe that’s the overall plan — make Social Security endlessly solvent by cutting medical coverage so drastically that life expectancy will drop enough to make less people take payouts for less time? If so, bravo, Republicans, it seems you finally crafted the perfect budget.
For great analysis on how Medicaid and Medicare would be killed, be sure to check out this piece in Talking Points Memo.
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