May 30, 2011 12:47 PM UTC

Ryan Plan Disastrous for Colorado's Most Vulnerable

• 9 Comments
• by: c rork

( – promoted by Colorado Pols)

POLS UPDATE: Look who the New York Times’ Carl Hulse leads off the story with:

Sal Pace, the Democratic leader of the State House in Colorado, was already preparing to run for Congress in a district captured by Republicans last year, but his party’s special election win last week in a conservative district in upstate New York made the decision all the easier.

“The New York race confirmed what I thought citizens would feel about Medicare,” said Mr. Pace, who is expecting to soon begin a campaign to oust Representative Scott Tipton, a freshman Republican, in southwestern Colorado. “People are very hesitant to end Medicare as we know it.”

In the aftermath of the New York victory, which hinged on a Republican plan to reshape the health care program for older Americans, members of both parties and independent analysts now predict a more competitive race next year for control of the House, with expanded opportunities for Democrats to reclaim seats they lost in the Republican wave of 2010.

—–

With the surprising victory of Kathy Hochul in New York, Rep. Paul Ryan’s plan to fundamentally restructure the nation’s health care systems for the elderly, disabled and poor has been thrust into the national spotlight. Colorado Representatives Tipton and Gardner have defended the Ryan plan as a sensible way to reduce the national debt.

The facts reveal a different picture; elimination on tax credits for small businesses, a massive shift of healthcare costs onto the elderly and disabled, the loss of approximately 2 million jobs over 5 years and tax cuts for the wealthy.

A Congressional Budget Office analysis of the numbers Rep. Ryan’s staff have provided shows that the cost of healthcare for those on Medicare will shift rapidly to seniors, who will be paying more than double the amount they are now by 2030. From an article by Kaiser Health News:

Seniors and the disabled would pay sharply more for their Medicare coverage under a new plan by House Republicans aimed at curbing the nation’s growing deficit, a Congressional Budget Office analysis shows.

For example, by 2030, under the plan, typical 65 year olds would be required to pay 68 percent of the total cost of their coverage, which includes premiums, deductibles, and other out-of-pocket costs, according to CBO.  That compares with the 25 percent they would pay under current law, CBO said.

Needless to say, this would be devastating for Colorado’s seniors. This begs the question: why are Tipton and Gardner supportive of this plan?

Rep. Ryan’s plan for Medicare is modeled after Medicare Prescription Drug Benefit, colloquially known as Medicare Part D:

“Our premium-support plan is modeled after the Medicare Part D prescription-drug program, in which providers compete against each other for seniors’ business. Medicare Part D came in 40 percent below cost projections done at the time of enactment – that’s almost unheard of for a government program.”

Rep. Ryan’s core plan to turn Medicare into a “Part D” program, in which seniors buy supplementary insurance, shows a basic misunderstanding of what services Medicare Part D provides and how that structure would apply to a system that provides comprehensive healthcare services. From the Washinton Post’s Ezra Klein:

Finally, if you look at them closely, Ryan’s plan and Part D don’t look all that similar. For one thing, Part D only covers drugs, while Ryan’s plan covers all health-care services. It’s not at all clear how applicable the Part D experience is to, say, hospital insurance. But the bigger issue is that Ryan’s plan is capped while Medicare Part D isn’t. In Part D, the federal government pays, on average, 74 percent of program’s costs. And that support grows alongside the program’s costs. Ryan’s plan covers about a third of beneficiary costs, and that support grows at the rate of inflation – so much more slowly than the rest of the program, or than Medicare Part D. This has always been the main criticism of Ryan’s plan, and Medicare Part D’s structure shows what a radical decision he made to structure it like that.

Any reasonable estimate of future healthcare cost inflation shows that the size of the vouchers will be inadequate within a matter of years. Whether seniors would receive adequate coverage would depend on whether congress decides to raise the size of Medicare subsidies to meet the rise in costs, if seniors have enough money to afford treatment and if their private health insurer,”…says yes or no”.

On to Medicaid. From a study by Ethan Pollack of the Economic Policy Center:

Over the next five years (during which time CBO projects that the economy will still be below potential), Chairman Ryan’s Medicaid proposal would cut the program by $207 billion, which includes both eliminating the Medicaid expansion under the Affordable Care Act and even deeper cuts to the Medicaid program. Using a standard macroeconomic model that is consistent with private- and public-sector forecasters, we find that a $207 billion cut would result in a loss of 2.1 million jobs over the next five years, or 2.9 million full-time equivalent jobs. These figures are in job-years, which refer to a job held for a single year, meaning that five jobs lost in a single year is the equivalent to one job lost over five years.

Furthermore, the job loss would overwhelmingly be in the private economy.

Other than this cut being disastrous for the economy and Americans that rely on Medicaid for basic coverage, the plan flies in the face of public opinion. Not only do most Americans oppose cuts to Medicaid, they oppose turning it into block grants:

Most Americans oppose the idea of converting Medicaid to block grant financing to reduce the federal deficit, and more than half want to see no reductions at all in Medicaid spending

While making changes to Medicaid to extend its longevity would be the wise thing to do, the plan also eliminates the advisory board that would recommend ways to do so.

Apparently the majority of Republicans are happy with the plan, even if it repeals parts of the Affordable Care Act that represent decidedly conservative ideals. One of the provisions of the ACA that went into effect are tax cuts for small businesses that decide to insure their employees. Although 99% of businesses with more than 200 employees offer health benefits, only three-quarters of businesses with 10-24 employees are able to do so. Even in a struggling economy, insurers are seeing very encouraging signs that the tax cuts are having a tremendously positive impact on small businesses:

The independent nonprofit insurer has been particularly aggressive in marketing the new tax credit, which can mean a discount of as much as 35% for very small companies with low payrolls.

“One of the biggest problems in the small-group market is affordability,” said Ron Rowe, who oversees small-group sales for the insurer. “We looked at the tax credit and said, ‘This is perfect.'”

Rowe said that 38% of the businesses it is signing up had not offered health benefits before.

The Ryan plan would repeal these tax cuts and would instead cut taxes for the wealthiest. It would lower the corporate tax rate and tax rates for the top income bracket by 10%. The loss in revenue by lowering these rates furthers the notion that Republicans in congress are more concerned with dismantling government programs that benefit the poor, disabled and elderly than they are about serious debt reduction measures and shared sacrifice.

Given the evidence, I believe Representatives Tipton, Gardner, Coffman and Lamborn owe a more thorough explanation than the ones they have given. They owe that much to the most vulnerable Americans.