The 2012 campaign continues to center on candidates and their allies calling the other guys “extremists,” and few bear the title as often as Vice Presidential nominee Paul Ryan. For his plan to reform Medicaid, for example, Ryan is a commander in the “Republican War on the Poor.” Others say his Medicaid plan will deprive millions of poor Americans of health care and may even split up families.
Far from hurting the poor, Ryan’s Medicaid plan will preserve their access to health care by making the government health care program affordable and sustainable. The plan has three main features: It would change Medicaid into a block grant, put the program on a yearly budget instead of writing it a blank check, and give states flexibility in how they implement the program.
Let’s address some of the myths and campaign rhetoric on Ryan’s reforms.
The Ryan plan will gut Medicaid spending.
Truth: The Ryan plan does not cut spending, but pegs federal Medicaid spending growth to changes in population and inflation, instead of an open-ended entitlement where the sky is the limit. States would have greater flexibility in how they spend federal funds, but would see sustainable growth in tax dollars. While Ryan’s plan would spend less than President Obama’s, the latter path is unrealistic. Under President Obama’s budget, Medicaid spending would grow by 9 percent a year, which cannot be sustained when the economy is expected to grow only 2 to 4 percent.
While special interest groups bemoan efforts to control spending, those administering the program at the state level, such as Wisconsin Health Secretary Dennis Smith, know they can do more with less.
Everybody agrees that there is excess cost in the health care system, so by golly, give us the flexibility to address it, and we will, said Smith.
Indeed, 29 states including Pennsylvania have asked for greater flexibility in administering Medicaid.
Expanding Medicaid would create jobs and help the poor.
Truth: Redistributing wealth doesn’t create jobs. The government has nothing except what it first takes out of the hands of workers and employers in taxes. Expanding Medicaid would cost Pennsylvania taxpayers an additional $2 billion by 2019. Taxing workers and employers to expand Medicaid will not only shrink job opportunities, but place more Pennsylvanians in second-rate insurance.
Further, Medicaid is a poor provider of care. Only 45 percent of primary care physicians are willing to accept most or all new Medicaid patients that come through their doors. Because it is difficult to find a doctor, Medicaid patients use ERs about twice as often as the uninsured and privately insured. And when patients do receive treatment, they face lower survival rates. Throwing more Pennsylvanians into a low-quality, high-cost insurance program punishes the poor and taxpayers.
The Ryan plan will kick folks off of Medicaid.
Truth: Medicaid enrollment and spending have ballooned, and growth must be slowed to preserve the safety net.
Medicaid has grown into a behemoth of an entitlement. Funded by both federal and state tax dollars, it is now the single largest program in Pennsylvania’s budget, and consumes almost 30 cents of every dollar state government spends.
Today, there are 2.5 jobholders for every Medicaid recipient. A decade ago, the ratio was 3.9 to one and in 1990 it was 5.2 to one. At this rate, there will soon be more Medicaid recipients than those earning a living.
Overall, state Medicaid spending increased more than 50 percent over the past decade. This rate of growth is unsustainable. Without bringing Medicaid spending and enrollment under control, we threaten the solvency of the program and of our commonwealth. We must instead look to transition individuals off of government dependency and provide a sustainable safety net.
Without state flexibility to innovate, change incentives and right-size the program, future generations of taxpayers we won’t be able to afford a social safety net.
Don’t be fooled by the scare tactics. The Ryan plan and similar calls for state flexibility will save Medicaid. It’s the opponents of these reforms who will shred the safety net.