GOP budget proposal has drastic changes and steep cuts for healthcare

The fiscal year 2015 budget the House Budget Committee marks up today would cut about $2.9 trillion in health care spending over 10 years and turn Medicare into a premium support program.

Introduced Tuesday by House Budget Committee Chairman Paul Ryan (R-Wis.), the budget resolution is intended as a political position paper ahead of the midterm elections. It has no chance of passing the Democratically controlled Senate, but it deftly lays out the Republican position on government spending and answers critics that say the party has for too long been just the party of opposition and not the party with its own ideas for how to run the country.

The chief point made by the budget is that now that the economy is getting back on track, it is time to scale back government spending and focus on bringing down the deficit.

“[This budget] builds off a simple fact: We can’t keep spending money we don’t have,” Rep. Ryan stated on the House Budget Committee website.

It also includes many Republican wishes for health care reform, including:

• Repealing the Patient Protection and Affordable Care Act, but keeping its spending reductions.
• Reforming the medical liability system
• Increasing means testing for Medicare Parts B and D
• Scrapping the Independent Payment Advisory Board
• Funding for a long-term fix to the Sustainable Growth Rate (SGR) formula
• Cutting Medicare spending by $129 billion over 10 years
• Reducing Medicaid and other health program spending by $732 billion over 10 years
• Converting Medicaid into a block-grant program whereby the government gives states a set lump sum to support their Medicaid programs
• Launching a Medicare Exchange program in 2024 where workers currently under age 55 could choose between private plans and a traditional fee-for-service option Medicare plan.

This last point alone will provide plenty for Democrats to talk about. In a statement put out by the White House, the administration warned that, “[this budget] would end Medicare as we know it, turning it into a voucher program and risking a death spiral in traditional Medicare.”

A death spiral is an insurance industry term for what happens when a plan’s premiums go up because it has a high percentage of older and sicker plan members and this premium increase drives out the younger and healthier plan members making the percentage of costlier beneficiaries even higher and the premium problem even worse.

Today’s bill markup promises to be contentious as the House Budget Committee’s Democrats push back against the plan. "This dog-eat-dog budget is nothing short of an assault on Americans struggling to stay afloat economically," said Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee, in a report from the Associated Press.