A new Republican federal budget proposal cuts Medicare and Medicaid funding, part of its attempt to cut government spending by more than $6 trillion in the next decade.
The 2012 budget, introduced by House Budget Committee Chairman Paul Ryan (R-Wis.), would repeal the several provisions of the health reform law passed last year that deal with insurance coverage and certain other provisions. Republicans have been trying to kill some or all of the Patient Protection and Affordable Care Act since its passage in March 2010.
Under the proposal, starting in 2013, the federal share of all Medicaid payments would be converted into block grants to be allocated to the states. States would have additional flexibility in designing their programs.
If approved, federal spending for Medicaid would be 35% lower in 2022 and 49% lower in 2030 than currently projected federal spending, according to a report by the Congressional Budget Office (CBO).
The projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than they do now, according to the CBO.
“Given that payment rates for providers under Medicaid are already generally lower than they are under Medicare and private insurance, if states lowered payment rates even further, providers might be less willing to treat Medicaid enrollees,” the CBO report said. “As a result, Medicaid enrollees could face more limited access to care. If states reduced benefits or eligibility levels, beneficiaries could face higher out-of-pocket costs, and providers could face more uncompensated care as beneficiaries lost coverage for certain benefits or lost coverage altogether.”
Changes to Medicare
The proposal would convert the Medicare program to a system of premium support payments and would increase the age of eligibility. The change would apply to people turning 65 beginning in 2022; it would be optional for beneficiaries who turn 65 before then.
By 2030, beneficiaries’ age 65 would pay 68% of their health insurance under the proposal, a much larger share of their health care costs than under the traditional program, the CBO estimated. Paying a greater share would require beneficiaries to reduce their use of health care services, spend less on other goods and services, or save more in advance of retirement than they would under current law, according to the CBO.
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- President rejects Republicans’ proposed Medicaid, Medicare cuts | Insurance & Financial Advisor I IFAwebnews.com
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