According to the Congressional Budget Office analysis of the Paul Ryan (R-WI) House Republican budget outline, at least what can be analyzed given that Ryan leaves huge unanswered questions about how his tax provision would even work, the plan calls for massive cuts in public health care spending. The result of the cuts would be millions of Americans ending up worse off. From the CBO the effect on Medicare:
Under the specified path, average real (inflation-adjusted) spending for new enrollees in Medicare would rise in coming decades but at a much slower rate than would occur under the other policy scenarios that CBO has analyzed (see Figure 2). Average net Medicare spending for 65-year-olds in 2011 was $5,500. Under the baseline scenario, average spending per 66-year-old in 2030 would be $8,600 in 2011 dollars (56 percent more); under the alternative fiscal scenario, that spending would rise to $9,600 in 2011 dollars (75 percent more); and under the specified path, it would be $7,400 in 2011 dollars (35 percent more). In 2050, the corresponding spending for a 67-year-old would be, in 2011 dollars, $17,000 under the baseline scenario, $19,100 under the alternative fiscal scenario, and $11,100 under the specified path.
By 2050, spending for new enrollees under the specified path would be 35 percent below that for the baseline scenario and 42 percent below that for the alternative fiscal scenario. The implications of that substantial cut in spending relative to the other policy scenarios are unclear, because they would depend on both the specific policies that were implemented to generate that spending amount and the ways in which the nation’s health care and health insurance systems reacted to those policies. Possible consequences include the same kinds of effects noted for the baseline and alternative fiscal scenarios—reduced access to health care; diminished quality of care; increased efficiency of health care delivery; less investment in new, high-cost technologies; or some combination of those outcomes. In addition, beneficiaries might face higher costs, which could in turn reinforce some of the other effects.
This is a huge cut in Medicare spending. Since it does not contain proven cost controls, this will likely mean seniors will see big increases in their health care spending and/or substantially reduced care.
From the CBO on the effect on Medicaid and CHIP: [cont’d.]
The implications of that substantial cut in spending relative to the other policy scenarios would depend on both the specific policies that were implemented to generate the specified spending amount and the ways in which the nation’s health care and health insurance systems, as well as state governments, reacted to those policies.
The responses of the states would be of particular importance. If states were given additional flexibility to allocate federal funds for Medicaid and CHIP according to their own priorities, they might be able to improve the efficiency of those programs in delivering health care to low-income populations. Nevertheless, even with significant efficiency gains, the magnitude of the reduction in spending relative to such spending in the other scenarios means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased costsharing by beneficiaries—all of which would reduce access to care.
The Ryan plan calls for a massive decrease in federal spending on Medicaid with no indication it would be made up by the states or from lower costs. The most likely outcome would be millions losing access to basic health insurance and many poor people forced to pay even more out of pocket to get care.
The winners and losers in this budget proposal could not be clearer. The poor and elderly end up much worse off, but people with higher incomes will see their tax rates cut significantly.
David Dayen has more details on other provisions in the Ryan budget.