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The battle over Medicare and Medicaid

What would the Republicans' newly proposed changes mean to Americans?

Nearly half a century ago, President Lyndon Johnson created the Medicare and Medicaid programs as part of his Great Society reforms. Now Medicare and Medicaid together account for almost a quarter of the entire federal budget – a total of almost $800 billion in the last year alone. In the recent recession, the federal government provided an additional $87 billion to fund Medicaid.

How would Rep. Paul Ryan’s plan change this? Instead of pumping in money as needed, the federal government would hand out a one-time block grant to each state, each year. You would not be entitled to a certain set of benefits if you qualified for Medicaid. It would depend on what a state governor wanted to do with that federal funding.

The New Republic’s Jonathan Cohn says it’s a risky prospect — and one that could have a serious human toll. “We know from the literature, we know from experience, we know anecdotally that when people can’t pay for their medical care they face very difficult, very painful choices.”

But Ryan (R.-Wis.) is betting that the rest of his plan will kick start the economy and fewer people will need Medicaid. “Of course, we want less people on Medicaid because that means people are making more money and they’re having better lives and they’re having more income,” he said.

Unlike Medicaid, Medicare is completely funded and run at the federal level. Most beneficiaries are covered by fee-for-service, which means that the government pays directly for things like doctor and hospital visits. Ryan’s plan would take away the fee-for-service option for future Medicare recipients and instead give a government subsidy to buy a private insurance policy. He also proposes to slowly raise the age of eligibility for Medicare from 65 to 67.

One last overarching problem with Ryan’s plan is the math. While the proposed changes to Medicare and Medicaid both take inflation into account, it’s not nearly enough to keep pace with rising health care costs. That could mean individuals would end up picking up more of the health care bill, an expense many can’t afford.

While Ryan’s plan is unlikely to pass, our experts said, it has big implications for the future. What should our entitlement programs be? What can we afford? And so again, while it won’t become law now, it’s not going to go away.



  • Freeda People

    Poor, old – don’t get sick.

  • Susan

    In Pennsylvania Gov Corbett, R, would take the funds and balance the budget. He already copped the tobacco funds that are supposed to pay for health care issues and education about smoking and discontinued the state basic insurance fund that provided insurance for those who cannot afford insurance or buy it for other reasons. The insurance was not free, it was for a fee based on income. He threw 50,000 citizens to the curb. He could have used the tobacco money to subsidize the insurance fund but apparently the state pension funds are more important.

  • Darold Pedersen

    I predict that the Health Insurance industry is unsustainable as it now stands anyway. And by the time this law were to take effect that it will collapse anyhow. Already most employers, including government, are requireing that the employee pay 20% or more of their insurance plans. When does this break down completely? 50%, 75%? At the point it does break down could turn out to be one of the best things to happen to Health Care in America. Then we will have an honest discussion about taking care of the people in this country. And get profit out of “Health Insurance.”

  • Kisia78

    …..Or, we could end the meaningless wars, return the tax rates to Clinton years. Where does the senator from Wisconsin get off thinking his “proposal” to alter government run healthcare that caters to the elderly and the poor should take precedence and supposed serious discussion while his government provided healthcare be left untouched?!

  • Norm Spier

    One of the things that should cause serious alarm and stress in us about the Ryan proposal is that it would apparently make Medicare policies pre-existing-conditioned screened (like current individual policies in most states). Pre-existing conditions issues cause well-publicized financial and health misery for people who need individual policies under 65. For the generally less healthy over-65 population we can count on true high anxiety and distress, as well as a certain amount of sickness and death.

    There is of course much more to be alarmed about in the bill

    There is one thing in the bill ( )
    that might cause you to chuckle, though.

    In an effort to present an illusion that everyone’s healthcare under Ryan will be “Like that of Members of Congress”

    (as in this Ryan Newshour interview )

    I have pasted from the Ryan Bill, p.11

    “BENEFIT PARITY WITH MEMBERS OF CONGRESS.—With respect to health insurance issuers offering health insurance coverage through the State Exchange, the State shall not impose any requirement that such issuers provide coverage that includes benefits different than requirements on plans offered to Members of Congress under chapter 89 of title 5, United States Code.”

    Now, read that carefully. Very carefully.

    Chuckle, at least if a functioning democracy is not a value dear to your heart.

  • Charles

    Talk death palels why don’t the GOP line up all poor & old people & exsterminate every one

  • Charles

    Talk death palels why don’t the GOP line up all poor & old people & exsterminate every one

  • Pevans

    I get sooo tired of listening to the ridiculous dribble that comes out of our government!! Can ANYBODY tell me the last time they did something of, by and for the people!? Thats right…they havent they dont and they wont!! I personally am embarassed that, we the people, allow it to go on!!

  • DEEJ

    I will be 65 in July of this year. My insurance company (I share cost with AT&T) is going to deny me benefits if I don’t sign up for Medicare A & B. This is not only wrong, but costly for our government and and me. If the “republicrats” in Congress want to save tax dollars, all they need to do is force these businesses to live up to their obligations.

  • Bree

    When are people going to wake the heck up and realize that THIS is what happens when you elect Republicans? The RICH get RICHER and the POOR get POORER.
    Republican politicians DO NOT care about the PEOPLE. They care about the HIGHEST BIDDER. From what I have observed since childhood —- most are schmucks who got into public service more out of a desire to make things better for themselves and the guys they golf with, rather than to make the world — or even their communities — a better place.
    (…please note that I did say “most”, rather than “all”).

  • Baccasjames

    I AM SORRY……………………… actually be compelled to say this……………….BUT……………if anly people who paid in to SS could collect SS benefits and Medicaire…………………the system would rebound……………….if someone desires the “American Way”……then earn it……it is called citizenship………………..and YES I do care about all mankind………………………BUT I (and my children,grandchildren,etc) can not afford to AND SHOULD NOT BE REQUIRED TO pay/give benefits to ……………errr……….oops…………………..ummmmmm……….”illegal aliens”……the word/term/concept “illegal” kinda says it all……………………….OH…… “bubble gum immigration” and water the VERY INSIGHTFUL video-reality of all this………………………(((((((a secondary benefit would be to patrol/close the Mexican border to illegal immigrants…..and in the process MOST of the drugs and border violence in the entire US of A))))))))))))))))))))…..just an off the wall thought….jim


    All the reforms the politicians think of will not work, when they give away the oversight (and profit) to health insurance companies and will ONLY hear the doctor positions, ignoring the patients and allow the banksters to make banking laws.

    Keep on making ugly and insipid bipartisan threats toward each other, my dear leaders. You’ve just about made this great country into wasteland of fraud, greed and waste. This is a hateful way to run a country and without the health of the people of this country, IT WILL FAIL. Thirty percent of us are now “disabled” according to the health insurance companies – BARRED from viable employment. 300,000 of us are killed in the hospitals every year. Good job, if treason is the point.

  • Anonymous

    Good, brief explination of Ryans Rape of medicare and medicaid… and on a similar note, i believe it is criminal to run any healthcare provided by doctors of compassionate care for profit above 10% of cost…God Himself only asks for 10%

  • Medicaid Application Texas

    This is the great blog, I’m reading them for a while, thanks for the new posts!