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Understanding Rep. Ryan's changes to Medicare, Medicaid
A Medicare Services office in New York City
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JEREMY HOBSON: Well as the president meets with top budget negotiators about this year's budget to avoid a government shutdown later this week, there's a new proposal for next year's budget. It comes from the chairman of the House Budget Committee. Republican Congressman Paul Ryan's plan would cut more than $6 trillion in federal spending over the next decade. The focus of the cuts are Medicare and Medicaid.
Our health care reporter Gregory Warner joins us live now from WHYY in Philadelphia with the details. Gregory, how would Medicare and Medicaid change under Paul Ryan's plan?
GREGORY WARNER: OK, so Medicaid, which covers the poor -- right now it's paid for by the states and the feds. And the spending depends on how many people sign up. Under Ryan's plan, federal spending would be capped with a block grant given to the states to use as they see fit.
HOBSON: OK.
WARNER: An even bigger change is proposed to Medicare, which covers seniors and people with disabilities. Right now the government pays doctors and hospitals directly. Under Ryan's plan, the next generation of seniors when they retire would shop for private insurance. The government would chip in to pay a percentage of those insurance premiums.
HOBSON: OK. Marketplace's Gregory Warner in Philadelphia. Now let's get reaction now from our regular Tuesday guest Juli Niemann. She's an analyst with Smith Moore and Company in St. Louis. Juli, cuts to Medicare and Medicaid -- this is bound to be politically unpopular.
JULI NIEMANN: Well, it's a good first step though. You know, you've got to talk about the other resident gorillas -- Social Security and defense. You can't freeze spending at existing levels, you got to reduce spending. My favorite daily reading is the Treasury report. The government spent eight times [their] revenue last month. Now that's March madness. We've got to maintain our national credit rating and ability to fund the humongous debt at reasonable rates. If we don't, the interest on debt becomes a driving component of the budget.
HOBSON: And Juli, this plan from Republican Paul Ryan is coming out just as we're getting into another presidential election, believe it or not. Doesn't that seem like an odd time for something this drastic?
NIEMANN: Odd time, but only time. There's a narrow window of time in which to reform. That's two years before elections. All reform is popular as long as it hits the other guy. This has to be piecemeal, we can't get omnibus packages through so getting started now means you've got a little window of time to do it.
HOBSON: Juli Niemann, analyst at Smith More and Company. Thanks as always.
NIEMANN: You bet.
Here's your future on this plan:
1- You get sick and use your insurance
2- The insurance company drops you
3- If you're lucky, you find another insurance company willing to take you, but your illness is now a pre-existing condition and not covered.
i'm retired and using all the goverment programs and very happy that someone has finally come up with a reasonable solution to capping these costs! these programs will not be availabe for future generations if we continue with this current spending. i am a vietnam veteran that came back to an ungrateful nation, but iam proud of my service and would like to see future generation enjoy this country like have.
Shame on Paul Ryan and the Republicans for even thinking of gutting health care for the poor and elderly while allowing the wealthiest to skate on, paying little or no taxes. Raise the cap on contributions to Social Security and Medicare, lower the Estate Tax exemption and raise the tax rates for those making over $250,000. After that let's hear if we really need to cut health care. The Republicans have no decency, and they forget the lessons of history: when people are poor and desperate they use violennce to steal from the wealthy.
