KHN’s Mary Agnes Carey talks with CQ HealthBeat’s Rebecca Adams about developments on the Hill. This week: A fiscal 2012 budget plan from House Budget Committee Chairman Paul Ryan would convert Medicaid to a block grant program and change Medicare to a “premium support” program where beneficiaries will receive a set amount for their medical care.  Democrats immediately challenged the plan, saying it would result in medical care cuts to the nation’s most vulnerable Americans. Ryan and supporters say federal spending on entitlements must be controlled to reduce the federal deficit.

Watch the video  or listen to the audio.

Transcript:

MARY AGNES CAREY: Good day. I’m Mary Agnes Carey and this is Health on the Hill. As Washington battles over spending matters for the current fiscal year, a dispute that could cause the government to shut down later this week, House Budget Committee Chairman Paul Ryan has proposed a fiscal 2012 spending plan that calls for major changes to Medicare and Medicaid. Let’s hear a bit about what Chairman Ryan has in mind for Medicare.

[Video]

MARY AGNES CAREY: As expected, Democrats are on the attack. Here is Representative Chris Van Hollen of Maryland, the ranking Democrat on the House budget panel.

[Video]

MARY AGNES CAREY: With us today to discuss Representative Ryan’s plan is Rebecca Adams of CQ HealthBeat. Hi, Rebecca, thanks for coming.

REBECCA ADAMS: Thank you for having me.

MARY AGNES CAREY: Let’s talk a little bit more about Medicare. Congressman Ryan envisions a “premium support” model. How would it work and what would it mean for Medicare beneficiaries?

REBECCA ADAMS: Well, the big change for people who are 55 or younger would be that instead of the current fee-for-service system that we have today, in which people can go to different providers that participate in Medicare and don’t have to participate in a particular plan, under the new proposal then there would be a certain amount allotted for each beneficiary.

They would have the subsidy, then they would use that money to go purchase a private plan on an exchange. And in previous iterations seniors who have wanted to get more generous coverage would have to pay out of their pocket to buy that on their own, to buy additional coverage, and we will see how the details are worked out by congressional committees later this year.

MARY AGNES CAREY: Sure. He is talking about it is the same kind of coverage that federal employees have, so he was talking about the federal employees’ health benefits program, which is a menu of choices. That is what he has in mind, correct?

REBECCA ADAMS: Absolutely. There would be a big marketplace and exchange and then these plans would offer coverage. Seniors would go and they would determine which plan works best for them.

MARY AGNES CAREY: But the traditional fee-for-service program you just talked about would not be a choice, is that correct?

REBECCA ADAMS: Absolutely. That would not be a choice for these younger workers.

MARY AGNES CAREY: Okay, absolutely. Alright, let’s move on to Medicaid then. He is talking about changing the Medicaid program as it currently works, and here we are talking about the shared federal state health insurance program. The federal government helps states with the cost for low-income and disabled individuals. What does Chairman Ryan have in mind for Medicaid?

REBECCA ADAMS: He wants to block grant Medicaid. Instead of having a corset of benefits that people are entitled to, then governors would have the flexibility to really structure benefits the way that they want. Currently governors do have a certain amount of flexibility but there is a corset of benefits that all people are entitled to – that is particularly true for children.
So what this would mean would be that governors would suddenly have the option of restricting eligibility or changing the benefits so that they are less generous for different populations in order to save money if they wanted to.

MARY AGNES CAREY: And so what would this mean, would people lose their coverage? It sounds like their benefits could change but could current people who are on Medicaid lose their coverage?

REBECCA ADAMS: That would be an option for governors. It would be up to the governors completely and the federal government would no longer be telling governors that they have to cover certain populations or provide certain benefits. Again, governors already do have some flexibility. There are optional groups that a lot of states have chosen to cover and governors already have the ability to reduce eligibility in that way, but this would go further to just give governors a lot more ability to do whatever they want.

MARY AGNES CAREY: I see. Alright, let’s talk a little bit about another element of Congressman Ryan’s plan, which is repealing the health care law. We have heard a lot about this, the House has already voted to do it – why put that in this proposal?

REBECCA ADAMS: This has been such an important part of the Republican platform. They really have opposed this law with everything they have, and this also provides $1.4 trillion in savings over that time period, which they can use for other things. So, the money is important, but also from a political standpoint it is also important to include that as well.

MARY AGNES CAREY: Alright, now let’s look ahead. Again, we are talking about a budget resolution for fiscal year 2012, which is a nonbinding resolution. Tell me a little bit about what happens next on the committee level in the House and the Senate, that sort of thing.

REBECCA ADAMS: Well, the House Budget Committee will approve this tomorrow, Wednesday, and we will see it go forward in the House. It will probably pass the House. It will not pass the Senate. There is no chance that the Democrats in the Senate will approve this.

Regardless, it does not have to be signed into law by the President. The President isn’t involved in this process, because it is just a budget resolution setting out instructions for committees to do their work for their own budget resolution. But what we will likely see is that after it dies in the House, then we will see further action. We may see further activities in the House, with congressional committees putting some meat on the bones of this and putting forward some of their proposals to be acted on by the House, but none of this is likely to become law in the next year.

MARY AGNES CAREY: Right, so passing the House it’s pretty much dead on arrival in the Senate.

REBECCA ADAMS: Yes.

MARY AGNES CAREY: And if I remember correctly from the news conference this morning, Chairman Ryan was asked, “Aren’t you on a kamikaze mission? Why bother to go down this road?” What was his response?

REBECCA ADAMS: Well, he was saying that he found it to be a moral imperative. He believes that this is something that is important for his children and the next generations. He thinks that we are facing a very predictable economic crisis that can be prevented and so he thinks that this is something that has to be done.

Republicans behind the scenes, some of them are saying this is not as big a political risk in the way that it has been portrayed, because there are so many fiscal conservatives out there who are agitating for reduced spending in Washington.

MARY AGNES CAREY: Okay so we have a lot on the road ahead. Thanks so much, Rebecca Adams of CQ HealthBeat.