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Health On The Hill: Analyzing Ryan’s New Budget Proposal

KHN’s Marilyn Werber Serafini and Mary Agnes Carey discuss the budget Wis. Republican Rep. Paul Ryan released today and how it differs from the proposal he released last year.

>> Listen to audio of the interview.

>> Read related story: New Ryan Budget Would Transform Medicare And Medicaid


MARY AGNES CAREY: Good day, this is Health on the Hill. I’m Mary Agnes Carey.

House Budget Committee Chairman Paul Ryan unveiled his fiscal 2013 budget plan today, which includes major changes to Medicare and Medicaid. Ryan’s proposal would also repeal the health law, which he says would have dire consequences for Medicare providers and patients.

REP. PAUL RYAN: Providers will get paid at about 80 cents on the dollar to begin with, going down to 30 cents on the dollar. The hospitals and docs will get paid less than Medicaid. And the problem is – what ends up happening is they’ll just stop seeing patients. You’ll just have reduced access and quality to Medicare for current seniors. The other thing it does is it takes a half trillion dollars from Medicare to spend on creating the president’s new health care law. What our budget does is this: It gets rid of that.

MARY AGNES CAREY: With us today to discuss the details of the Ryan plan is Kaiser Health News correspondent Marilyn Werber Serafini. Hi, Marilyn, thanks for coming.


MARY AGNES CAREY: Paul Ryan made a lot of headlines last year when he introduced his Medicare overhaul proposal. Can you tell us about what he introduced today and how is that different or the same as what he introduced last year?

MARILYN WERBER SERAFINI: Well the proposals are really very similar, in that they both would limit the amount of money that the federal government spends on Medicare. But they differ in two important ways. One is that the cap for how much the federal government would spend is tighter this year. Both times, it’s tied to the growth of gross domestic product. But last year, tied to Gross Domestic Product plus one percentage point. And this year, tied to gross domestic product plus one-half of a [percentage point].

And that is really the same as what President Obama was talking about not too long ago – the GDP plus one-half of a percent. So Ryan picked up on that and went with it this year.

Also is fee-for-service. Now, that is the traditional Medicare program. Last year, Paul Ryan would have given seniors a percentage of the premium that they could choose for a list of private health care plans. He would have totally done away with traditional fee-for-service Medicare. This year, he includes the promise of traditional Medicare.

MARY AGNES CAREY: He partnered with Ron Wyden, a senator from Oregon, on this idea to broaden the premium support concept to include traditional fee-for-service and the private plans. Is Ron Wyden on board with what Ryan did today?

MARILYN WERBER SERAFINI: No, he’s actually not. But it doesn’t have to do with the promise of fee-for-service. It’s more that when Ryan and Wyden partnered together, they had a cap on federal spending, but they had limited it to GDP plus one. And with Ryan coming across with a tighter cap; that is not what Wyden had supported.

MARY AGNES CAREY: Paul Ryan’s talking about in his view, the president’s health law would so drastically reduce payments to providers that Medicare providers and beneficiaries would be hurt. How does he deal with that in his plan?

MARILYN WERBER SERAFINI: Well, actually, critics are already saying the same thing about his plan. There’s only so many places to take cuts out of Medicare. And if you’re not going to it with beneficiaries, then, historically, what Congress has done is to take Medicare savings from making cuts in payments to doctors, hospitals and other medical providers.

So, already today, we have hospitals complaining that: “Look, if you decrease our payments any more, we’re going to look a lot more like Medicaid. And if we look a lot more like Medicaid, people are going to have trouble getting in to see a doctor. Because physicians, hospitals, medical providers – they’re just not going to want to take those kinds of payments.”

MARY AGNES CAREY: On the House floor this week, they are scheduled to vote on legislation that would do two things, would eliminate this panel created in the health law to make recommendations on how to reduce Medicare spending and it would also overhaul current medical malpractice laws. Chairman Ryan also looks at those in his plan. What does he do?

MARILYN WERBER SERAFINI: He would do both of those. He wants to repeal this board, called the IPAB – the Independent Payment Advisory Board. Frankly, it hasn’t been a very popular part of the health law since its inception. So he wants to get rid of that. And he wants to do some malpractice reforms. He wants to cap non-economic damages in malpractice awards – that’s for pain and suffering. He doesn’t say by how much, but he wants to cap that, to help with the cost of health care.

MARY AGNES CAREY: Now let’s turn and close with Medicaid, the federal-state program for the poor and disabled. What would Ryan’s plan do to Medicaid?

MARILYN WERBER SERAFINI: He would simply block-grant the Medicaid program. Right now, it’s a federal-state partnership. What he wants to do is give states the ability to take a federal chunk of money – the federal government sends the states the money and the states would simply run the program. He has said this has been a very successful model under welfare. And he believes that this would work very well for both controlling costs and potentially improving quality in the Medicaid program.

MARY AGNES CAREY: And that’s similar to what he did on Medicaid in his proposal a year ago?


MARY AGNES CAREY: Thank you so much, Marilyn Werber Serafini, Kaiser Health News.


Related Topics

Cost and Quality Medicaid Medicare States The Health Law