What’s in the wind? If Republicans take the White House and both houses of Congress, seniors on Medicare who have higher incomes may find themselves subject to means testing, a step that would also radically change Medicare. Medicare is social insurance: People are obligated to pay into the system while they are working and, in turn, they have a right to benefits later when they turn 65. It doesn’t matter how high their income is, they are entitled to Medicare benefits. This universality—the idea that everyone is in the pool—has contributed to Medicare’s popularity. It’s not a welfare program like its cousin, Medicaid. To qualify for Medicaid benefits, recipients’ income and assets cannot exceed certain guidelines.
The budget discussion is sure to include the notion of means testing Medicare too. Supporters argue that rich people like Warren Buffett don’t need Social Security or Medicare, and the federal government could save billions by giving benefits only to those who truly need them. The counterargument: With means testing, these programs will turn into welfare programs, like Medicaid, and lose popular support.
Ryan’s “Path to Prosperity” budget plan also proposes changing the financing arrangement for Medicaid. It calls for converting the matching payments the federal government makes to the states into block grants of fixed dollar amounts. A state could use that money as it saw fit. Republicans and some Democrats support using block grants for Medicaid. But there’s a problem: fewer people would be covered. The CBO found the “large projected reduction in payments would probably reduce eligibility for Medicaid.”
The health reform law expanded eligibility for Medicaid, but the Supreme Court decision upholding the law allows states to opt out of the expansion. Meanwhile, block granting would move far away from the goals of the ACA, which envisioned 17 million more people added to the program.The CBO also reported that block grant financing could also mean less extensive coverage for recipients and lower payments to doctors and hospitals. Health providers may not like that, and may try blocking congressional attempts to change the program.
GIVING FEWER BENEFITS
No one yet is taking about trimming the basic Medicare benefits, but in this volatile political mix, anything might come up. Some states have already cut benefits for Medicaid recipients, especially dental services. More benefit cuts are likely as states continue to have budget shortfalls.
All these possibilities are perfect for people stories.The dollars and cents angle is the one the press should pursue in explaining any of these proposals to their audiences.
What’s been missing so far in the public discussion of entitlements is how “reforms” would affect ordinary people.