GOP going back to failed 2003 playbook on Medicare/Medicaid cuts (elimination)
But they are really going one better. Back in 2003, President Bush and the GOP were just proposing to “block grant” Medicaid and shift some Medicare recipents to private plans. Now they want to shift all people on Medicare to private plans and basically end the Medicare program.
It is amazing to me though how we are right back to where we were eight years ago. In the end back then state governors, facing huge budget problems, realized that the Medicaid cuts were just that – cuts – and a bad deal for the states, regardless of party. Those cuts didn’t happen. We did end up encouraging Medicare recipients to go into private Medicare plans though. How did that turn out? Well, taxpayers ended up paying 14% more to private health plans for delivering exactly the same benefits as the traditional Medicare program. Cutting that huge subsidy to the insurance industry is one big way the Affordable Care Act saves money and starts to bring Medicare costs under control.
So, if the GOP’s grand plans didn’t work back then, why should they now? Check out the summary of the 2003 GOP proposals in the American Prospect:
“Our goal is a system in which all Americans have got a good insurance policy, in which all Americans can choose their own doctor, in which seniors and low-income citizens receive the help they need. … Our Medicare system is a binding commitment of a caring society. We must renew that commitment by providing the seniors of today and tomorrow with preventive care and the new medicines that are transforming health care in our country.” — George W. Bush, Medicare address, March 4, 2003The man simply has no shame. His program does none of this. What it does, simply, is to make dramatic cuts in the benefits for both the poor and the elderly.
Under the current Medicaid program, the federal government matches, on a sliding scale, the money that states put up. The state is required to cover some beneficiaries and services, although others are “optional.” But “optional” services include many essential and life-saving treatments. And “optional” beneficiaries are seldom able to pay for private insurance. Bush’s plan, in effect, would turn Medicaid into a block grant, capping the federal contribution. Because states are already hard-pressed to keep up with Medicaid costs, services to the poor will simply dwindle. As Leighton Ku, a health-policy analyst at the Center for Budget and Policy Priorities, notes, if under the current plan “you wanted to save that much money, you would have to specify which cuts to make, how to make the cuts. But it’s much easier to cut the block grant because it’s invisible; someone else has to make the decisions.”
Bush claims to bring flexibility to Medicaid, and, in a sense, he’s right. Under his plan states would have, as Secretary of Health and Human Services Tommy Thompson put it, “carte blanche” in dealing with optional benefits and optional recipients. In other words, a mother making more than $9,000 a year would be fair game, as would an 8-year-old child who lives in a family with an income just above the poverty line, or a senior citizen or disabled person living on $7,200 a year.
And there’s a whiff of coercion to the way in which the states are offered the option of switching to the Medicaid block grant. The states, which have already started cutting Medicaid on their own, are literally begging for federal fiscal assistance, and none is forthcoming. But if they consent to Bush’s Medicaid plan, they’ll get not only $3 billion in new federal money next year (a loan they would have to repay) but the ability to save money by trimming their Medicaid rolls. In other words, the president is making them an offer they can’t refuse.
Bush relentlessly invokes a rhetoric of choice on Medicare. But the Republican proposal pushes seniors toward heavily managed private plans that offer partial drug benefits but limit choice of treatment and doctor. If you stayed with traditional Medicare (which does offer free choice of doctor and hospital), you’d only get minimal prescription-drug benefits. The plan would spend some $400 billion over 10 years, a sum that provides coverage worth 40 percent less than that enjoyed by members of Congress under the Federal Employees Health Benefit Program, which Bush repeatedly invokes as a model.
And while the plan allows House Republicans to avoid making politically unpopular cuts to Medicare, it requires Congress to cut $169 billion over 10 years from programs they oversee. So in the end, Medicare cuts may end up paying for prescription-drug benefits.
Despite rhetoric promising to increase other health spending, a close reading of the House Republican budget proposal shows $2.4 billion in cuts for programs — such as the National Institutes of Health, Community Health Centers and the Ryan White AIDS program — that Bush has pledged to support. Even though Bush vowed in his State of the Union address to spend $15 billion over the next five years to provide AIDS relief to Africa, much of that money won’t be available until at least 2006. [See Garance Franke-Ruta, "The Fakeout," TAP, April 2003.]