Thursday, April 07, 2011

How to Eviscerate Government Programs, Courtesy of Republican Congressman Paul Ryan and his Budget Plan

By Richard Kirsch

Paul Ryan’s budget recklessly slashes health programs and ignores our responsibility to care for each other.

USAction President William McNary, one of the most powerful voices of my generation, often reminds us that budgets are not about numbers; budgets are moral documents, a statement of our values and priorities. Paul Ryan, the Republican Budget Committee Chair, agrees with McNary’s attention to values, saying that the goal of his proposed budget plan is to “… leave our children and our grandchildren with a debt-free nation. It is a moral imperative.”

Philosophers have written volumes on whether morality can be absolute or is always relative — one man’s morality is another man’s offense — so I’d take Ryan’s statement of his concerns about the moral transcendence of the national debt at face value except for one thing: his budget includes $4 trillion in tax cuts, including $1.5 trillion to corporations and higher-income individuals. If avoiding the saddling of our children with debt were Ryan’s true moral compass, then lowering tax rates would be off his map. Despite Ryan’s boy scout earnestness, he is really driven by an ideology of eviscerating government and denying our responsibility to care for each other.

As progressives, we should welcome a values debate with Ryan and his supporters. The centerpiece of Ryan’s vision for the future, his dismantling of the nation’s public health insurance programs and repealing of the Affordable Care Act , is in sharp contrast with our own vision. Ryan’s health proposals would reduce federal debt by making families destitute and would result in tens of thousands of Americans dying each year because they do not have health coverage. His proposals would enrich the private insurance industry and protect the interests that are most responsible for high health care costs.

Ryan’s budget would replace Medicare, the nation’s national health insurance program for seniors and people with serious disabilities, with vouchers to buy private insurance. The Ryan voucher plan is not about controlling health care costs; instead, it is intended to shift costs from the federal government to the seniors and the disabled who are covered by Medicare.

We have decades of evidence that Medicare does a better job of controlling health care costs than private insurance. Health care costs have increased at a significantly lower rat under Medicare than in private insurance plans, chiefly because Medicare is much better able to limit how much it pays to doctors and hospitals. The private insurance plans that now cover about one out of five Medicare patients do so at a cost that is 13% greater than Medicare pays for the same benefits (cost overruns that will be significantly reduced by the Affordable Care Act). Insurers reap substantial profits from these private Medicare plans, profits that would soar if the entire Medicare population were handed over to the health insurance industry. And because private insurance has failed to rein in doctor and hospital costs as effectively as Medicare, health care providers would be enriched too.

Ryan’s plan does cut health care costs in one macabre way: When people can’t afford the care they need — and the CBO reports that the Ryan plan will double the already high cost of health care to seniors — they die sooner. From a dollar-driven point of view, a cynical person might argue that a retired senior who is not being a productive worker and has no savings left to be a productive consumer is really a drain on society.

Which leads us to the Ryan plan to ruin Medicaid by replacing a program that now entitles low-income people to health coverage with a block grant to states to spend however they want on health care for the poor. In this instance, the federal government saves money by decreasing what it pays to state governments and states get to do the dirty work of cutting people’s health care.

Ryan and the Republicans are betting on the notion that people think Medicaid is for “those people,” the undeserving poor (a tautology for Republicans). Putting aside the fact that the low-income people who qualify for Medicaid are women, children and the working poor, what a great many Americans actually experience is that Medicaid is a program for their parents and grandparents. Seventy percent of Americans in nursing homes are on Medicaid and two-thirds of Medicaid expenditures are on the elderly and disabled. So after the Medicaid voucher program bankrupts seniors so that they would qualify for Medicaid, Ryan would pull that rug out from them too, as states would be forced to cut the biggest cost in the Medicaid program, long-term care.

The other way states could make up for the lost federal revenue is by cutting health coverage entirely, or providing skimpy coverage with high out-of-pocket costs, to women and children and other low-income people who are covered by Medicaid. By increasing the number of uninsured, Ryan’s plan would result in the death of even more people, since for every one million people that are uninsured, about 1,000 people die a year due to the lack of health coverage.

The Ryan budget also eliminates the state children’s health insurance program, which covers millions of children in moderate-income working families who earn too much for Medicaid. And it eliminates the coverage provisions of the Affordable Care Act, which, by expanding Medicaid to 133% of the federal poverty level and providing income-based subsidies to buy coverage for millions of families who don’t get coverage at work, would cover 32 million uninsured. That’s not all: Ryan would also raise the age to qualify for Medicare from 65 to 67, adding that age group to the uninsured for the first time since Medicare began in 1965.

I’ve lost track at this point of the number of people who such changes to the nation’s health care coverage system would kill each year — certainly upwards of 40,000. Who knows? And millions more would be saddled with personal debt or driven into bankruptcy .

Progressives have moral alternatives to Ryan’s dark vision. The Affordable Care Act is a good start, as it reduces the federal debt while covering 32 million people a year, relieves millions more of medical debt and begins to control costs at their root: over-payments and wrong incentives to health care providers. Much more can be done in this last area to move from a health care system that relies on a failed free market to control health care costs. The successful route to controlling costs is that which was taken in many other nations: a national health care plan that controls the methods and amounts that health care providers are paid.

For example, we can set the prices we pay for prescription drugs, which other nations do, cutting drug prices in half. We can provide hospitals with global budgets, giving them an incentive to reduce the amount of disease in a community and not duplicate services provided by other hospitals. And if we really want to follow Ryan’s example of politically difficult policy approaches that are visionary, we could move to a national health care plan that covers everyone as a matter of right, with comprehensive coverage and low out-of-pocket costs, financed through taxes. That’s the vision that would lower health care costs and lead to a prosperous, healthy future for all Americans.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute and is writing a book on the progressive campaign to enact health reform. This post appeared first in the Roosevelt blog, New Deal 2.0.


Lynn Biederstadt said...


SallyB said...

It's a crying shame that so many of the NeoCons ascribe to Randian philosophy. Ryan happens to be an acolyte of Ayn Rand so it just goes to show how cynical his so called "Path to Prosperity" really is. It's a path to prosperity if you are already prosperoous and wealthy and does NOTHING for the most vulnerable among us. It's a sham and although it already passed the House of Representatives, I hope it doesn't stand a chance in the Senate and even if by some chance it passes there, I can assure you that Obama will NOT sign the bill.

I'm constantly amazed at how many people consistently vote against their own economic self interest. You can chalk that up to breathtaking ignorance of civics and American history, which are no longer taught in schools, unfortunately and haven't been for a very long time now. It's criminal that these subjects have fallen to the budget cutting axe in favor of pure math and science curriculum, and it's true that as a nation we have a long way to go to catch up with the rest of the industrialized world in educating our young people in math and the sciences, but we should not sacrifice the humanities to do so. We are a poorer nation for allowing important subjects like civics and American history to fall by the wayside.