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Obama Blasts Medicare, Medicaid Elements of House GOP Budget

By Dena Bunis, CQ HealthBeat Managing Editor

April 3, 2012 -- President Obama maintained last week that the House Republican budget would "ultimately end Medicare as we know it" and that it includes the largest cut ever to Medicaid.

In a seething election year speech, Obama went after the Republican budget and restated Democratic opposition to the Medicare proposal engineered by House Budget Chairman Paul D. Ryan, R-Wis.

After acknowledging that Medicare is "one of the biggest drivers of our long-term deficit,'' Obama went after what he called the solution "proposed by the Republicans in Washington and embraced by most of their candidates for president."

"Instead of being enrolled in Medicare when they turn 65, seniors who retire a decade from now would get a voucher that equals the cost of the second-cheapest health care plan in their area. If Medicare is more expensive than that private plan, they'll have to pay more if they want to enroll in traditional Medicare,'' Obama said, explaining the so-called "premium support" plan that Ryan has proposed. Ryan's plan is a variant of a bipartisan proposal developed by former Congressional Budget Office head Alice Rivlin and former Sen. Pete Domenici, R-N.M. The original premium support plan that Ryan devised did not allow seniors to maintain traditional Medicare. But his revised plan, co-written with Democratic Sen. Ron Wyden of Oregon, would give Medicare recipients that choice.

"If health care costs rise faster than the amount of the voucher—as, by the way, they've been doing for decades—that's too bad," Obama said. "Seniors bear the risk. If the voucher isn't enough to buy a private plan with the specific doctors and care that you need, that's too bad.

"So most experts will tell you the way this voucher plan encourages savings is not through better care at cheaper cost,'' he said. Rather, he said, under the Ryan plan, insurers would cherry-pick the young and healthy seniors and those who are sick would stay with traditional Medicare, where they could get better access to care. Obama said that, in the end, health care costs would increase and any money the government saves would be on the backs of seniors. He called the whole notion "a bad idea."

Ryan has repeatedly said that without significant changes, Medicare is not sustainable. He points to trust fund reports that say the program is expected to run out of money within 10 years. In his proposal, Ryan said Medicare's "failed reliance on bureaucratic price controls, combined with rising health care costs, is jeopardizing seniors' access to critical care and threatening to bankrupt the system—and ultimately the nation."

Obama also assailed the GOP preference to block-grant Medicaid, something the president maintains would be a bad deal for the states.
"They would have to be running these programs in the face of the largest cut to Medicaid that has ever been proposed: a cut that, according to one nonpartisan group, would take away health care for about 19 million Americans—19 million," Obama said, referring to a May 2011 issue paper by the Kaiser Commission on Medicaid and the Uninsured.

A GOP aide pushed back on the president's use of the 19 million number, saying that refers to the number of new people who would be put on Medicaid under the health care overhaul (PL 111-148, PL 111-152), not people currently on the program.

"Forcing another 20 million Americans into a broken Medicaid system is one of the many reasons Republicans opposed the President's health care law and continue to support its repeal,'' said Gerrit Lansing, a Budget Committee aide. "Turning power over Medicaid to the states would result in a better program that more effectively serves those it is intended to help.''

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